November 6, 2025

Top 5 Most Landlord Friendly States to Invest In 2025

By: Sharlene Mulchandani

Real estate investors are managing successful rental businesses across the U.S. But there’s no doubt that some landlord friendly states make better long-term investments than others.

The best investors don’t only know how to invest, but where to do so. The success of a rental property investment often depends on landlord tenant laws in the localized market it lies in, but certain states make investing inherently easier for landlords due to legal regulations and lease agreement policies.

Whether you’re a new or seasoned investor, knowing where to target your next rental property investment is critical. In this article, we’ll cover the criteria to be on the lookout for as well as the top five best states for landlords and successful rental property owners.

What Does It Mean for a State to Be Landlord Friendly?

When a state is landlord friendly, its policies, rental regulations, current market conditions, or other factors are favorable to landlords and investors. For instance, a high average rental income and rental rates can make a state attractive to real estate investors, but so can lax legal regulations found within a state’s landlord-tenant code. The most landlord friendly states have a favorable combination of these factors, even if they don’t have every single one.

In 2025, many states are reevaluating rent control and eviction protections, making it even more critical to invest in regions that protect landlords’ rights and profitability.

What Makes a State “Landlord-Friendly”?

Here are a few of the factors that make a state landlord friendly.

1. Low property taxes and insurance rates

Property tax rates are one of the biggest factors landlords look at when deciding whether to invest in rental properties in a state. Some states have an extremely high rate for property taxes, while others have lower property taxes, which are more favorable property laws for investors and especially for those who own or plan to own multiple rental properties.

Insurance rates are also a consideration. The national average cost of landlord insurance is around 20% more than a typical homeowner’s policy, but rates vary by location. This is a result of different levels of risk in different areas of the country— some states have more natural disasters than others, and the risk of unpaid rent, damages, and other issues also varies. As a result, landlords consider both the property taxes and insurance rates that will affect their rental property assets before choosing to invest.

In 2025, Florida, Louisiana, and California saw landlord insurance premiums rise by due to increased climate risk. Many insurers in Florida and Louisiana became insolvent after multiple Hurricane disasters, leading to a tightened insurance market and fewer available policies. State Farm recently discontinued 72,000 home policies in California, as the threat of wildfires have driven costs up due to high risks and regulatory burdens.

In contrast, states like Indiana and Ohio remain relatively affordable when it comes to landlord insurance. In Indiana, the cost of landlord insurance averages at $936 per year, and in Ohio at $966. These states benefit from fewer natural disasters, lower population densities, and a historically lower rate of catastrophic claims. Their moderate climates reduce the risk of widespread damage from hurricanes, wildfires, or earthquakes, allowing insurers to keep premiums predictable and competitive.

In each of the above mentioned states as well as others, insurance is a major factor that influences the renting/leasing environment for landlords.

2. No statewide rent control (or banned)

Rent control laws are laws that regulate or restrict the price landlords can ask tenants to pay rent. Rent control is often instated to keep markets in check and reduce the likelihood of unpaid rent due to unreasonable rates.

Across the U.S. states, there are a variety of approaches to rent control. A state can either:

Instate state-wide rent control laws (to which all localities must comply)
Not enforce state-wide rent control, but allow localities to instate it
Only allow rent control during emergencies (e.g., the COVID-19 pandemic)
Ban it entirely (also known as pre-empted status)

The most landlord friendly states have either banned rent control entirely or have very few cities and localities that enforce it. No rent control doesn’t guarantee that tenants will pay rent on time, but it does guarantee that rent prices won’t be formally capped by the government.

As of 2025, 32 states have rent control bans or preemption laws in place, including Texas, Arizona, and Indiana. Meanwhile, new legislation expanding rent control is under consideration in states like Massachusetts, Illinois, and Washington.

In Massachusetts, lawmakers are reconsidering rent control for the first time since its repeal in 1994, with Boston leading the push for local authority. Illinois has multiple active bills, such as House Bill 116, proposing to repeal its rent control preemption law, with strong backing from tenant rights groups in Chicago. Washington State is also exploring statewide rent stabilization measures after a sharp increase in housing costs across cities like Seattle and Tacoma.

If you aren’t aware of the status of rent control in your state and city, now is the time to dive into these laws – you may find that a new bill has been proposed or even passed since you last checked.

3. No or few restrictions on late fees/security deposits

Most states have laws and security deposit restrictions regulating the amount landlords can charge for certain fees and deposits, such as late fees for unpaid rent and security deposits. Landlord-friendly states have no/few restrictions or relatively lax restrictions. For example, a landlord-friendly state may allow landlords to choose their own late fee amounts when tenants do not pay rent, charge fees as soon as unpaid rent is late, collect large security deposits, and/or allow landlords ample time to deduct funds from deposits when the lease on the rental property ends.

States like Georgia and Indiana give landlords full control over late fees and security deposits. Landlords in Georgia and Indiana can charge any amount they see fit, set their own timelines for collecting and returning deposits, and enforce fees immediately when rent is late. However, although uncapped legally, courts may strike down unreasonable fees in these states. Still, this flexibility lets landlords protect their properties and adjust terms based on tenant risk or local demand.

In contrast, tenant-friendly states like California and New York enforce strict limits with tenant-centric regulations. California caps security deposits at one month’s rent for unfurnished units and two months for furnished. New York allows only one month’s rent, no matter the unit type. Both states require landlords to return deposits quickly—within 14 days in New York—and include itemized deductions. They also restrict late fees and often require a grace period before landlords can apply them.

Both late fees and security deposits impact the bottom line for landlords, so if you’re looking into investing in a state with limits on either, be sure to do your research.

4. Quick eviction process

Lease violations inevitably lead to the eviction process, which can often be tedious and costly. Landlord-friendly states make it easy for landlords to remove tenants who do not pay rent or repeatedly violate their rental agreements. Although eviction is a complex legal procedure in every state, some states’ rental laws make the process quicker, easier, or less expensive than others.

Eviction speed is a critical metric for investors. In Florida, the average legal eviction process takes less than 30 days. In contrast, the average process in New Jersey may take three weeks to three months (or longer) depending on court backlogs. Understanding eviction speed is essential for any investor considering a property in a given state.

5. Business-friendly regulatory environment

Landlords should also consider whether a state imposes additional licensing, rental registration, or inspection requirements.

States like Texas do not require statewide rental licenses, while cities like Los Angeles and Boston impose strict requirements. However, cities like Dallas have adopted laws where a landlord must register their properties with the city yearly.

1031 exchange friendliness, capital gains taxes, and inheritance laws are key factors that also vary. States like Ohio, Nevada, and South Dakota are known for low or no estate/investment taxes, which is ideal for long-term wealth building. Ohio does tax income (including capital gains) but has no estate or inheritance tax and there is no state capital gains tax in Nevada, South Dakota, Florida, Texas, Wyoming, Alaska, Tennessee, and New Hampshire. All of these factors should be involved in an investment decision you’re making.

Top 5 Most Landlord Friendly States

Now that you know which factors make a state landlord friendly, here are the top five best landlord friendly states for your 2024 investments.

1. Alabama

Alabama makes our list due to its low tax rates and lax rental laws and fee regulations.

Second lowest tax rate (0.40%) in the U.S., according to Rocket Mortgage
No statewide rent control
No limit on late fees
No mandatory grace period for rent
Extra-long period to return security deposits (60 days)
Seven-day eviction notice period for unpaid rent and other lease violations
Tenants are not permitted to withhold rent or repair and deduct if the landlord fails to remedy a condition
Fun fact: The median home value in Birmingham dropped 5.1% since 2024. Homes still go to pending in around 20 days, indicating steady demand despite the price drop.

2. Colorado

Colorado makes the list of best states for rental property owners due to its low tax rate, rent control ban, and lax rental laws/fee restrictions.

Third lowest property taxes rate in the U.S. (0.55%), according to Rocket Mortgage
Banned rent control
No security deposit limit
Extra-long period to return security deposits (60 days)
No advanced notice required before entry for most reasons
Shorter eviction notice periods for unpaid rent and lease violations (three to ten days)
Fun fact: Vacancy rates in Colorado have hit 7% in the first quarter of 2025, the highest level in 15 years–partially driven by approximately 20,000 new apartments added in 2024

3. Arizona

Arizona is one of the best landlord friendly states due to its relatively low tax rate and shorter eviction notice periods for rental properties.

Low property taxes (0.63%)
No statewide rent control
Shorter eviction notice periods (five to ten days)
Fast eviction process (5-day notice for nonpayment, 10-day notice for lease violations)
Minimal restrictions on late fees
Fun fact: Median rent prices decreased 7% in Phoenix in 2024, yet Phoenix still maintains a reputation as a high-growth metro

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4. Texas

Texas is one of the top landlord friendly states due to its expedited eviction process and several cities with high rental rates.

No statewide rent control
No security deposit limit
No advanced notice necessary before entry into a rental property
Three-day eviction notice period for all lease violations
Option to file for “immediate possession”
Has a tax rate of 1.68%, according to Rocket Mortgage
Fun fact: Austin ranked No. 1 among U.S. metros for the largest year-over-year drop in median rent, according to a Redfin report released May 12, 2025. The median rent in the Austin-Round Rock area fell 9.6% from the previous year to $1,399, making it the only metro in the country to approach a double-digit decline.

5. Ohio

Although Ohio has higher property tax rates, it is nonetheless one of the best states for landlords to invest in due to its open security deposit policy, lax lease agreement regulations, and simple eviction process.

No statewide rent control
No late fee limits
No mandatory grace period
No security deposit limit
Short eviction notice period for nonpayment (three days)
Fun fact: Columbus and Cincinnati have become midwestern investment hotspots in 2025, with average gross rental yields of between 7%-12%, and low competition compared to coastal cities.

Honorable Mentions

Below are some of our honorable mentions for most landlord friendly states:

Nevada – Nevada has a notoriously speedy eviction process that many lawmakers have attempted to revise. Currently, Nevada makes it very easy to remove a tenant under an expedited summary process action.
Florida – Florida has no statewide rent control, no security deposit limit, and shorter eviction notice periods.
Illinois – Illinois has no statewide rent control, no late fee limit, no grace period minimum, and shorter eviction notice periods.
Indiana – In Indiana, rent control is banned, there is no late fee limit or grace period minimum, and there is also no security deposit limit.
Michigan – In Michigan, rent control is banned, and there is no late fee limit, security deposit limit, or mandatory grace period for rent.

City and Local Regulations

When we talk about a state being “landlord friendly,” we’re referring to its statewide conditions and regulations. It’s important to remember that county and municipal regulations are overlayed over state laws. These localities often establish stricter regulations for properties within their boundaries than the ones enforced by the state itself.

This means there are better and worse cities for landlords in even the most landlord friendly states. It’s up to the investor to do their research into the individual local laws that may apply in the area they intend on investing in. Be sure that your lease or rental agreement complies with local regulations in addition to state ones.

For example, while Arizona preempts rent control statewide, the city of Tucson passed a 2024 ordinance requiring rental registration and safety inspections. Always confirm local rules before purchasing.

Does “Landlord Friendly” Mean “Tenant-Unfriendly”?

It’s worth noting that just because a state is landlord friendly, this doesn’t necessarily mean that the state is hostile to tenants. It just means that this state’s policies or conditions are ideal for landlords or real estate investors. Every state has protections in place to guard tenant rights and make sure that both parties within a rental agreement are treated fairly under the law.

In fact, many landlord-friendly states also rank well for tenant satisfaction and rent affordability, proving that fair laws can benefit both parties when enforced properly.

Tips for Landlords in All States

Not every state makes property management easy, and there are barriers for landlords in every state. If you’re investing or operating rentals in a tenant-friendly state, here are smart ways to act in your best interest and protect your bottom line:

Know the local laws. Understand rent control rules, eviction timelines, deposit limits, landlord-tenant regulations, and entry restrictions in your city and state.
Set expectations early. A well-structured lease that clearly spells out rent due dates, maintenance obligations, late fees, and entry policies protects both parties and reduces miscommunication.
Get serious about documentation. Keep thorough records of communication, payments, inspections, and repairs. In highly regulated areas, having proof on file is often the difference between winning or losing a legal dispute.
Invest in preventative maintenance. Regular property upkeep isn’t just about avoiding tenant complaints, it keeps you in compliance with strict habitability standards and minimizes costly emergencies.
Build relationships with local professionals. Connect with experienced attorneys, real estate agents, and contractors in your area. These professionals can help you navigate red tape and avoid fines.
Use software to stay organized. Property management platforms can help you automate lease tracking, maintenance requests, rent reminders, and more.
Prioritize tenant quality over speed. In places where evictions are slower or more expensive, it’s worth spending extra time upfront to find responsible, communicative tenants, even if that means a longer vacancy.
Think long-term. In restrictive states, profit margins might be slimmer in the short run. But stable tenants, well-maintained properties, and smart financial planning can still lead to long-term success.

Investing wisely in landlord-friendly states can significantly boost your portfolio’s profitability and sustainability, ensuring long-term success in the ever-evolving real estate market.

Conclusion

If you’re looking to invest in a new property in 2024, the five states listed above are a promising bet. However, be sure you do the necessary research into local/municipal laws on landlord-tenant relations and rental agreement policies so that you are fully informed of the implications of investment wherever you decide. With shifting economic conditions, legal reforms, and rising housing demand in key metros, choosing a landlord-friendly state can protect your margins and simplify long-term portfolio growth.

FAQs

What does it mean for a state to be landlord friendly?

A landlord-friendly state offers policies and regulations that favor landlords, including high rental income potential and lax legal restrictions. Such states often have low property taxes and no rent control, making them attractive to investors.

Why are low property taxes important for landlords?

Low property taxes reduce the overall cost of owning rental properties, making investments more profitable. States with lower property taxes are often more attractive to landlords looking to expand their portfolios.

How does insurance rates affect landlords?

Insurance rates impact the cost of maintaining rental properties. States with lower insurance rates, like Indiana and Ohio, are generally more favorable to landlords as they reduce the financial burden and risk.

What is the significance of rent control laws for landlords?

Banning or limiting rent control allows landlords to set rental prices based on market demand, which can lead to higher profitability. Many landlord-friendly states have either banned rent control or limited its application.

How do eviction processes affect rental investments?

A quick and straightforward eviction process is crucial for landlords to effectively manage property turnover, thereby reducing potential financial losses from non-compliant tenants. This is a key factor in determining a state’s landlord friendliness.

Are landlord-friendly states negative for tenants?

Not necessarily. Many landlord-friendly states maintain fair tenant protections, ensuring that both landlords and tenants can benefit from transparent and equitable rental agreements.

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How to Terminate Your Property Management Contract in 6 Steps

posted on : November 6, 2025 0 Comment

By Noel Krasomil

Whether you’re selling a rental property, switching to property management software, or simply tired of paying 8% to 12% monthly recurring fees, you’ll need to know exactly how to terminate your existing property management contract.

To help, this guide will walk you through common reasons landlords make the switch, a six-step guide to canceling your contract, and a free termination letter template for you to use.

No hard feelings, property managers, but today’s landlords have more efficient and affordable tools at their disposal.

Reasons to Terminate Your Property Management Contract

There are plenty of reasons to cancel your property management contracts, including:

High Costs Are Hurting Your Bottom Line

Most property management companies charge between 8 and 12% of the monthly rent price. That’s no minor expense, and the recurring fees can have a real impact on your cash flow. If rising fees are stunting your returns, it might be time to axe your contract to free up more funds.

You’ve Sold, Moved, or Expanded Into a New Market

Sometimes, a simple sale or a move to a new area is all it takes to part ways with your property manager. If you’ve offloaded a rental or expanded into another market, switching management is often the practical next step. Nothing personal, soon-to-be-ex property manager. It’s just business.

Lack of Communication or Responsiveness

Whether it’s missed maintenance requests, delayed rent updates, or tenant complaints left unanswered, communication breakdowns can harm your business in numerous ways. If your property manager isn’t alert and responsive, it’s probably time to consider replacing them with a more dependable solution.

Poor Maintenance and Repair Handling

When maintenance issues arise, addressing them promptly and effectively is non-negotiable. If your property manager is failing to deliver when gathering quotes, vetting contractors, or scheduling repairs to maintain habitability, they’re a liability.

To resolve this issue, consider switching to property management software that includes built-in maintenance tracking and a coordinated repair dispatch system.

Tenant Complaints

Tenants and property managers have to get along. (Your sanity relies on it.) If you’re hearing complaints from tenants about poor communication, delays, or general unprofessionalism, it might be time to start drafting your termination letter. Disgruntled tenants can lead to turnover, bad reviews, and prolonged vacancies you can’t afford.

Desire to Self-Manage or Use Property Management Software

Maybe you suddenly have more time on your hands and want to take a crack at self-managing your properties. Or perhaps you’ve realized that modern software offers time-saving tools that can streamline most of the work for you. Regardless of your reason, you might be primed to make a bold move that saves you thousands by simplifying your rental operation.

Property management software can help you advertise listings, screen tenants, collect rent, manage repairs, and store documents, all from the comfort of your computer or smartphone. And if going entirely DIY feels too risky, a hybrid approach with occasional hired help is also viable.

How to Terminate Your Property Management Contract

Before you rush to submit your notice, ensure you understand the proper procedure for cutting it loose. The following six steps will help you exit your property management agreement:

Step 1: Review Your Contract Terms

Always reread your property management contract before terminating it. (This rule goes for any contract you ever sign, really.) As you review it, look out for termination clauses, notice periods, and any early cancellation fees. Understanding the fine print helps you avoid slipups and increases your chances of a clean split.

If, after reading your contract, it makes sense to cancel, take steps to move forward. Open up your laptop, draft your notice letter, and get ready to deliver some bad news to your property management company (professionally, of course).

Step 2: Issue Written Notice to Terminate Your Contract

Next, it’s time to tell your property management company something they probably don’t want to hear: you’re moving on to greener pastures. To do that, you’ll need to send them a formal termination letter that is professional, clear, and direct.

When writing your letter, be sure to include your property address(s), termination date, and any relevant references to the contract’s terms. Stay specific, avoid emotion, and make it simple for them to close out their end of the relationship.

Pro tip: Keep reading for a free termination letter template you can copy, paste, fill in, and send directly to your property management company.

Step 3: Square Up on Finances

When you end your contract, you’ll likely have some loose financial ends to tie up. These might include termination fees, unpaid invoices, or pending maintenance reimbursements. Review your final statements carefully to ensure everything adds up before proceeding.

Then, pay everything in full and get written confirmation from the old company that your account is closed and zeroed out. The key here is to completely shut the door on this past arrangement. Don’t leave it cracked open for surprise charges or disputes down the road.

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Step 4: Communicate the Change With Tenants

Switching from a property management company will inevitably bring changes. Let tenants know you’ve parted ways with your property management company and explain what to expect next. Clear communication will prevent your tenants from texting the wrong number, mailing checks into the void, or being unsure who to call when the toilet backs up.

Step 5: Transition Property Management Duties to Software

Now it’s time to start transitioning as many of your day-to-day duties as possible over to software. You can automate many aspects of your operation, including rental applications, tenant screening, state-specific lease generation, accounting, and bookkeeping, among others.

And while your operation won’t become completely passive, it’ll become a whole lot simpler. You’ll save time, streamline essential processes, and put an end to forking over 8 to 12% of your rent each month.

Step 6: Monitor the Transition Closely

As you automate, make sure tenants sign up for digital rent payments and understand how to enroll in autopay. Double-check new leases before sending them out and ensure that your accounting system is set up correctly. Make necessary tweaks to stay organized.

Pay attention to how things run once you’ve made the switch. If payments are late, tenants get confused, or messages go unanswered, make adjustments as needed. A little fine-tuning early on will go a long way toward keeping your business running like clockwork.

Free Property Management Termination Letter Template

[Your Full Name]
[Your Mailing Address]
[City, State, ZIP Code]
[Email Address]
[Phone Number]

[Date]

[Property Management Company Name]
[Company Address]
[City, State, ZIP Code]

Subject: Termination of Property Management Agreement for [Property Address]

Dear [Property Manager’s Name],

I am writing to formally terminate the property management agreement for the rental property located at [Rental Property Address], as outlined in our contract dated [Original Contract Date].

In accordance with the termination clause stated in the agreement, I am providing [X] days of written notice, with the final effective date of termination being [Termination Date]. Please confirm receipt of this letter and begin the process of transferring management duties, tenant records, and any outstanding funds or deposits.

I request a final accounting statement, along with all relevant documentation, including lease agreements, maintenance records, inspection reports, and current tenant contact information. Kindly ensure that any future correspondence regarding the property is sent directly to me at the contact information listed above.

Thank you for your service to date. I appreciate your assistance in facilitating a smooth and professional transition.

Sincerely,

[Your Full Name]

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Now that you understand how to terminate your property management contract, it’s time to take control of what happens next. TurboTenant can help with the transition by automating rent collection, lease signing, tenant screening, and more.

Not to mention, many of TurboTenant’s core features are free to use. Signing up takes just a couple of minutes, and you won’t even need to bust out your credit card. Once you’ve taken our software for a test drive, you can upgrade to a paid plan for full-feature access. It’s less than the middle-tier Netflix price.