Top 6 Most Landlord-Friendly states for 2023

Real estate investing can be a lucrative and rewarding venture, but it can also come with its own set of challenges. One of the biggest challenges for landlords is dealing with the various state and local laws that govern how they can manage their rental properties. Some states are more landlord friendly than others, and understanding which states are the most favorable can help you make informed decisions about where to invest.

Here are the top 6 most landlord friendly states for real estate investors, based on rent yield, property taxes, the existence of rent control, and ease of eviction:

1. Mississippi - This state tops the list primarily due to its favorable price-to-rent ratio and very low property tax rates (just .52% on average). Mississippi landlords can expect a high rent yield, meaning rental rates are relatively high compared to the cost to purchase a single family home.
   
   Notably, even as rents surged nationwide in 2022, rents in Mississippi remained modest, averaging just $1495/mo. However, home sales prices also remained modest. The median was just $172,000. Dividing the annualized rent by median sales price delivers a gross rent yield north of 10%. This  ratio leads to very high cap rates for landlords in the Magnolia state.
   
   Another pro for the state is its stance on rent control. The legislature preempts the adoption of rent control statewide. Finally, Mississippi has a short notice to quit period (14 days) for evictions, making it easier for landlords to remove tenants who don’t pay.

Below are the states that round out the list of the top places for landlords to invest in 2023…

1. Oklahoma - Oklahoma is up next on our list. With typical rents of $1400 and home prices that average below $200k, landlords can expect handsome rent yields. OK also has an exceptionally short notice to quit period for evictions. For a tenant with a fixed-term lease, the landlord need only give the tenant 10 days' notice to vacate the property if they are in breach of the lease agreement.
2. Indiana - Median rent in the Hoosier state is just under $1,400. Median home price is a modest $221,000, making it a good choice for landlords looking to maximize their profits. It's worth noting that Indiana has no rent control laws, giving landlords full control over their rental rates and terms.
3. Alabama - Forest Gump's home state has a price to rent ratio is in line with the top 3 at $205,000 avg home price and rents that average $1450. If your tenant fails to pay on time (or otherwise break the terms of your lease), the state requires only 14 days notice to quit.
4. Arkansas - This state has a solid price-to-rent ratio, with median sales price of $250k and median rents of $1350. Notice to quit requirement is 30 days. Arkansas has no rent control.
5. Wyoming - The home of Yellowstone rounds out our list, thanks to very low property taxes (.57% on average) and a laissez fair stance on rent control. (The state legislature does not address the practice at all.) The state also favors landlords dealing with tenants who behave badly. The notice to quit requirement is just 10 days. Home prices are a bit higher than other entries on the list ($320k on average), and rents are nearly $1200 on average, so gross yield is about half the rate in #1 Mississippi.

While these states may be the most landlord friendly overall, it's important to note that there may be other factors to consider when deciding where to invest in real estate. For example, you may want to consider the local economy, the rental demand in the area, and the overall cost of living. When building lead lists on REISkip, it may be a good idea to overlay these rankings with your current criteria to find the best opportunities to continue building out your portfolio.