The 5 Most Tenant Friendly States in 2020

Being a landlord involves navigating a wide range of challenges. Between dealing with high tenant turnover rates, the tenant not paying rent, and a myriad of property management responsibilities, it is safe to say that landlords have their hands full when it comes to operating a rental property. In addition to the aforementioned issues, they also have to deal with rental laws that lean heavily towards the tenant depending on their location. So what are the most tenant friendly states in 2020? And what should you watch out for when buying rental property in such states? Keep reading as we reveal the 5 most tenant friendly states 2020 and outline some of the regulations that landlords need to know about in order to navigate the least landlord friendly states.

What Are Some of the Features of Tenant Friendly States?

As you would expect, landlord tenant laws vary from one state to another. A key point of difference between them is how the tenant landlord relationship is regulated. For example, some states favor the tenant in almost every situation whereas others give landlords a lot of leeway in terms of enforcing their terms. Here are some of the aspects in which tenant friendly states favor the renter:

Security deposit limits: Unlike Florida, most tenant friendly states set a maximum amount that can be charged for the security deposit.
Repair policies: Some tenant friendly states allow tenants to deduct all repair costs from rental payments.
Landlord access to the premises: Landlords might be required to provide sufficient notice before entering the property.
Termination notices for violation of rental terms: Some jurisdictions don’t allow a unilateral termination for a violation of rental terms.
Rent control: Certain states restrict rental increases. Rent control laws are not ideal for landlords since recurring expenses can increase on a yearly basis while rental income hits a plateau.
The eviction process: In tenant friendly states, eviction is often a tedious process that can drag on for up to 6 months.

tenant friendly states - eviction process

5 Most Tenant Friendly States in the US

Let’s now check out the 5 most tenant friendly states in the 2020 US housing market.

1- Vermont

Vermont has been one of the most tenant friendly states for years now. The state imposes a 60-day rent increase notice on landlords and sets a 14 -day deadline for returning security deposits. Moreover, the tenant is given a lot of latitudes when it comes to withholding rent and deducting expenses from it. For example, tenants have the right to stop rental payments if the landlord fails to provide certain essential services. In addition to this, they can also deduct repair costs from these payments. Here are some other extra regulations that favor the tenant:

Landlords need to provide a 48-hour notice before entering the premises
Termination for nonpayment of rent is subject to a 14-day notice
Tenants can recover abandoned properties within 60 days of receiving a notice

Vermont Real Estate Market Data

Airbnb rental income: $2,239
Traditional rental income: $2,710
Airbnb cash on cash return: 2.1%
Traditional cash on cash return: 4.5%
Median property price: $313,094

2- Delaware

The Delaware housing market is not particularly landlord friendly. In fact, the tenant enjoys a host of privileges in the state. Much like Vermont, they are allowed to withhold rent when services are not provided and can deduct most repair expenses from monthly payments. As for notice periods, the landlord is required to provide a 5-day notice for nonpayment termination, 7 days for a lease violation, 48 hours for rental property entry, and 7 days for recovering an abandoned property.

Delaware Real Estate Market Data

Airbnb rental income: $2,529
Traditional rental income: $1,472
Airbnb cash on cash return: 3.3%
Traditional cash on cash return: 1.3%
Median property price: $362,097

3- Oregon

Oregon stands out as one of the most tenant friendly states in the country. Besides requiring long notice periods on every action taken by the landlord, Oregon became the first state to impose a statewide rent control law. Under these new regulations, rent increases are capped at 7% + inflation within a 12 month period. The rate of inflation, in this case, is based on estimates by the Consumer Price Index for Western states.

Oregon Real Estate Market Data

Airbnb rental income: $2,606
Traditional rental income: $1,658
Airbnb cash on cash return: 2.4%
Traditional cash on cash return: 0.9%
Median property price: $477,465

4- Rhode Island

This state might not be the first place you think of when you’re trying to figure out where to buy investment property, but in reality, the Rhode Island real estate market is quite strong. The only downside from a landlord’s perspective is the relatively strict rental laws. In fact, the notice periods for regular termination and termination for violation of terms are fairly long and the tenant can deduct all repair expenses from their rent.

Rhode Island Real Estate Market Data

Airbnb rental income: $2,827
Traditional rental income: $1,856
Airbnb cash on cash return: 2.2%
Traditional cash on cash return: 0.87%
Median property price: $465,246

5- Nevada

The law for tenants in Nevada is highly favorable. As it is the case with most tenant friendly states, landlords cannot terminate the lease or initiate eviction proceedings without providing sufficient notice. Nevada’s law also allows tenants to halt rent payments if the landlord infringes on occupancy regulations or fails to provide essential services.

Nevada Real Estate Market Data

Airbnb rental income: $2,765
Traditional rental income: $1,392
Airbnb cash on cash return: 4.0%
Traditional cash on cash return: 1.4%
Median property price: $420,607

The Bottom Line

The fact that some states favor tenants should not deter you from becoming a landlord. In fact, owning a rental property in tenant friendly states can be a smooth and profitable venture as long as you know what to watch out for. Use the Mashvisor Property Finder and start looking for the top-performing income properties right now! You should also check out our blog to learn more valuable tips for landlords.

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