In your opinion, what are the best and worst states to be a landlord in?

CALIFORNIA by far after reading about problems of landlords in other states.

Jim: I can't tell if you're saying CA is best or worst. He asked "best & worst" and you gave one answer with little context to know which of those you're saying it is. :)

- John...

I am not sure if some of the problems that CA Landlords report are local issues instead of statewide. For example, the length of time it takes to get a deadbeat tenant out in L.A., due to the local court congestion, might not be the same as in Modesto.

And the bureaucratic nightmares that Robert J reports might be due to L.A. County red tape and might not be the same in Kern County!

But I agree with NE that CA, MA and NJ seem to be states that are hard for LL's!

Roy: I was thinking the same thing. I agree with that if he means from only an investment standpoint.

But, if he means in general based on state laws, that's a bit different. :)

- John...

I am sure that Robert J and I both enjoy the CA appreciation in property values, the CA increases in rents, and the weather. Frankly, to anyone that has bothered to do his lessons, I would call CA one of the best states.

AZ. Usually only takes 21 days to lockout. New law, anyone over 18 not on lease is a trespasser. Just call the cops.

Everything else can be handled with a shovel and a short desert drive. ;-)

Ditto for what Robert said as far as Ontario goes. We have to be the worst environment for landlords north of the border and one of the worst in North America. You can still make money here but they make it very hard and that deters investment. Then the province wonders why the laws of supply and demand make rent go up.

Tenancies are of unlimited duration as tenants have security of tenure no matter how much of a nuisance they may be. Eviction is very hard for reasons other than nonpayment of rent or illegal acts (drug dealing largely). The Human Rights Commission and the provincial government makes a series of crazy and contradictory demands. For example, no welfare or disability payment nor any bank account containing any welfare or disability money whatsoever can be garnished, meaning people on welfare or disability are completely uncollectible. But the Human Rights Commission says it is a violation of Human Rights to make a tenancy decision based on source of income. Landlords are in essence supposed to bear all the risks of the government's social policies and preferences. The province of course won't make landlords whole and absorb the expense of any failed and uncollectible tenancies.

Similarly the Human Rights Commission has actually ruled that it is a violation of human rights for landlords to use rent to income ratios. So the standard of income being 3x rent is against the law. In submissions to the government some tenant's rights groups have argued that landlords should be able to make no decisions at all based on income as by definition in their view tenants would never apply for a unit they did not believe they could afford. Therefore if a tenant applies, they can afford it. QED.

The latest is a series of changes to protect tenants against 'sexual violence' which it turns out could merely be a claim of feeling threatened or uncomfortable in some way. It is actually written into the law that there can be no determination of the truth of such claims, once a tenant makes them they are 'deemed' to be true. This is in contrast to similar legislation in Alberta where some evidence had to be provided and a certificate issued to allow breaking a lease. The upshot in Ontario is that tenants can get out of fixed term leases on short notice and fixed term leases have no hold on a savvy and unscrupulous tenant.

Home owners of course know what to expect if they try and get out of a mortgage on similar grounds. There is no relief for them and that is because the banks are a much bigger and more powerful interest group than landlords.

These provisions can be used quite creatively. Suppose you have two tenants living in a unit, one employed and one on public assistance. The employed tenant issues a notice to terminate his/her interest in the tenancy due to a claim of sexual violence. This is automatically accepted as true and the tenant's responsibilities under the lease are ended. The employed tenant then turns around and moves back into the unit. Voila, they are no longer a tenant they are a guest of the remaining tenant and cannot be sued. You are left with the uncollectible tenant and out of luck whenever they decide to stop paying rent, which can be an attractive proposition for tenants on the make. Routine evictions easily take 3-4 months by which time the tenant could owe you $5k.

There has been consultation and there are suggestions that the government might provide relief for landlords especially small landlords with one or two units who do not know what they are doing and are seen as easy marks for professional tenants. There have been a number of stories about professional tenants who appeal eviction orders to Divisional court, a body that oversees administrative tribunals such as the Landlord and Tenant Board. Merely filing such an appeal gets the tenant an automatic stay of eviction and can leave the tenant in the unit and not paying rent for a year or more. Unbelievable!

Sorry the post above was a bit long, there just is no shortage of material as to why Ontario deserved the trophy as most landlord hostile jurisdiction in North America. One of the landlord groups here has done a comparison and says that our statute, the Residential Tenancies Act, is the longest law of its kind in North America. That gives some idea of the level of regulation that landlords here labour under.

MO is a great state in which to be a Landlord.

NJ property tax increases will wipe out your rent increase by January 1.

There are a lot of undocumented people here as well as potential terrorists. (I got a call for a unit from lead terrorist Mohammed Atta in 2000) and they are still here.

NJ is well equipped to take you to court if you refuse the wrong person for the wrong reason and pick you dry.

This thread hasn't really brought any insight into the really best & worst jurisdictions; with the exception of our ON colleagues, there are no details about what is good or bad that locates a jurisdiction on one list or another.

And, CDM rightly points out the effect of rent control provision that are beyond rent control. In CA, such ordinances are at local option, ranging from demonic (e.g., SF, Berkeley) to non-existent (most all other CA jurisdictions).

Thus, a better question, in order to shed light on what jurisdictions are really best or worst, would be to ask about how and what constraints there are that affect landlording. Inconveniences shouldn't count.

And that means that those who who cite jurisdiction other than their own as best or worst, need to know what they are talking about.

district justices: Are you sure that you don't have a right to demand a higher level judge?

I'm a little guy in CA with rentals in rent control areas and without. So far I don't mind rent control. Sure, I inherited a tenant with slightly below market rent, but I've raised their rent the legal 3% every year since and they are now pretty close to right.

However I would like them to move and remodel the unit for even higher rent. So should I be allowed to do that with impunity? Maybe, if you believe might makes right. But I don't and I'm fine with my rent controlled legal avenues of buying them out should I wish.

I knew what I was getting into when I became a landlord here and I find it eminently fair for all parties.

The one I can get to in 20 minutes or less :-)

I like doing things myself, so I want to be there.

Wisconsin is fairly neutral as far as landlord tenant laws. A lot of outsiders think they can get great returns in Milwaukee. Yeah, but they just need to google some names : Za Leigha Jenkins, Bill Thou, Layla Peterson, there are many, many others, but my eyes are tearing up. Milwaukee is not for the faint of heart.

Canada isn't too LL friendly......Callie isn't that friendly either but Moshe is correct in having nice appreciation - But some how forgot to mention the nasty corrections on mostly non-cash flowing properties.

This is a bit of a loaded question. If you are asking which state is best, I submit too the invest in your own backyard market place. Right now Nashville is smoking hot if you want to play the chase the appreciation game.

At this point in my life, I can't afford another 1990's California crash. I much rather have a boring and slow market place where I not get to worried about these items. I much rather wonder, how many checks are going to be in mail box today vs the folks doing electronic fund transfer.

Other important life issues include oatmeal or Raisin Bran

What is meant by "nasty corrections on mostly non-cash flowing properties."?

Nasty Corrections........From 1989 to about 91 you had a 22% drop in prices

In SoCal when the aerospace industry dumped the state for Phoenix from 1994-1996, another 27% drop. This past time California was second only to Florida for the wild ride it produced.

The Office of Federal Housing Oversight started it housing price calculator for all states in 1991 - right when your state was at a low point in a real estate cycle. The increase reported by them over that period to the most recently reported quarter is only 147% ranking it only 18th in long haul performance.

Where I will be the first one to say you can a great deal of money out there (and I did) if you buy at the right time, you will be in for a wild ride. Wild rides were great for me when I was younger........that isn't what I want now.

Still not much in the way of specific reasons why one state is better or worse than another.

I've researched markets in about 15 different states and I own in two. TX and MO.

I don't like the government creep in IL. I'd never buy there. Too many cities trying to stick it to the LLs around there with all manner of occupancy fees, unfavorable LL/Tenant codes and the like, nevermind Chicago.

Seattle, WA I agree is awful. I have family there and looked seriously at investing there but passed because of Seattle's habit of coming up with heretofore unforeseen fees, onerous policies and so forth that are punitive toward the property owner.

I avoid CA, MA and NJ due to the overly regulated nature of the business climate there and the liberal leanings of policy in those states. Where ever you have enormous wealth that feels overly compassionate about the "Little guy", the businesses that rely on the little guy for revenue get torched. Things like rent controls tenant friendly laws, advocate judges, higher minimum wages effectively punish businesses trying to serve the "Little guy".

MO is good to operate in although I don't like the amount of time it takes to evict someone. I get around that by vetting well and keeping rents just below market rents. That way I get good prospects to choose from most of the time and I stay pretty well occupied.

TX is best. Texas has the strongest statutes in support of property owners and property rights. In Texas I can get a lock out in 10-14 days from late payment depending on the day of your court filing. That means someone can be late on the 2nd (if rents are due on the 1st without a grace period as mine are), file on the 2nd or 3rd and out 10 days to 2 weeks later. Renters know this and good ones learn to pay on time as a result IME.

That also means you have opportunity to re-rent in the same month as you filed for eviction. As far as I'm aware this is faster process than anywhere else in the US so long as you get on the docket (which in my area isn't too hard at all.)

Texas also allows the LL to seize valuable property under statute to hold as collateral for unpaid rent, but this is a part of the law that must be followed to the letter as some judges think it is unfair.

Texas also is the most economically encouraging state for general business and tends to policies the encourage rather than punish commerce.

I gotta check out AZ. Might have to hit up LTD if she's game. Will be doing a long term gig in PHX starting next month!

I think a portion of my state could be one of the worst (Madison and Dane County) and one of the best (most of the rest of the state, except maybe Milwaukee.

See fair housing list below over and above the other portions of the state. I am thinking that in Madison, there are 23 protected classes. They go way above and beyond in protecting tenants.

Local Ordinances

City and county fair housing ordinances may include additional protected classes. For instance, the cities of Madison, Milwaukee and Appleton, as well as Milwaukee and Dane Counties, have protected classes not included in state and federal fair housing laws. (See below for more information about these locally-protected classes.)

Do you suspect you were denied the opportunity to rent an apartment, buy a home, get a home loan, or buy homeowners insurance because of one of the characteristics listed above?

In the City of Madison and Dane County

Military Discharge Status – Type of military discharge, also including active duty status.

Physical Appearance – The outward appearance of any person.

Political Beliefs – A person's opinions concerning the social, economic and governmental structure of society and its institutions.

Student Status – Having or not having standing as an enrollee of a school or apprenticeship program.

Domestic Partnership – Two adults in a relationship of mutual support, who occupy the same dwelling as a single housekeeping unit, and whose relationship is of a permanent domestic character.

Tenant Union Association – Persons who form or are associated with a tenant union.

Gender Identity – Identifying or presenting oneself as male, female or androgynous, regardless of one's biological sex at birth.

Genetic Identity – Genetic information unique to the individual, including information about genetic tests. (City of Madison only)

Citizenship Status – The immigration status or citizenship of any person. (City of Madison only)

Section 8 Housing Vouchers – Participants in the Housing Choice Voucher Program.

Nonreligion – Atheism, agnosticism, or other disbelief or lack of belief in the existence of God or gods. (City of Madison only)

Homelessness – the status of lacking housing, including having a shelter or transitional housing facility as a primary residence. (City of Madison only)

In the City of Milwaukee and Milwaukee County

Gender Identity or Expression is also a protected class, protecting a gender identity, appearance, expression, or behavior of an individual, regardless of the individual’s assigned sex at birth.

Military Service – Past or present membership in the military. (City of Milwaukee only)

Domestic Partnership – Having status in a domestic partnership. (Milwaukee County only)

In the City of Appleton

Gender Identity or Expression is also a protected class, protecting a gender-related self-identity, appearance, expression, or behavior of an individual, regardless of the individual’s assigned sex at birth.

THE FAIR HOUSING COUNCIL 759 N. MILWAUKEE ST., SUITE 500. MILWAUKEE, WI 53202 Call us at 414.278.1240

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