Least Landlord-Friendly States: Top 10 in the US

The Big Picture on The Least Landlord-Friendly Cities and States:

• • Many cities and states have implemented strict eviction processes, making it harder and more time-consuming for landlords to remove non-paying or problematic tenants. Eviction bans, long court delays, and mandatory mediation periods are some of the hurdles landlords face when trying to regain possession of their properties.
  • Portland, OR, and New York City are among the worst cities for landlords due to strict tenant protections, like rent control and no-cause eviction bans.
  • State and local regulations vary greatly, with some areas favoring tenants more, complicating the process for rental investors in cities like Los Angeles and Chicago.

The last time I had to evict a tenant in Baltimore, it took me 11 months to get him out. 

Over that time, he took advantage of Baltimore’s extremely tenant-friendly laws to prolong the eviction. When I finally got him out nearly a year later, he punched holes in every kitchen cabinet, broke the bathroom door, and tore up the flooring purely out of spite. 

I tell this story any time I hear naïve landlords say that landlord-tenant laws don’t matter “as long as landlords treat people fairly.”

Think of that argument as the landlord’s equivalent: “Only guilty people worry about privacy or police misconduct.”

So Deni and I put together a list of the least landlord-friendly cities and states, at least from a rules and regulations standpoint. I no longer invest in any of these cities and recommend avoiding them. 

State Landlord-Tenant Law Rankings

All states have their landlord-tenant act, which creates the rules landlords and tenants must follow. Some favor property owners, while others favor tenants. 

Landlord-tenant regulations cover items like:

• Security deposit rules and limits
• Late fee limits and mandatory grace periods
• Returned payment fee (NSF fee) limits
• Eviction warning notice periods
• Advance notice required before landlords can enter their properties

Unlike cities (more on them momentarily), state landlord-tenant laws vary along a continuum. Our friends at RENTCafe helped us put together this interactive map of the US to showcase which states are most friendly for landlords, which are neutral, to which are the worst.

Note that pink to brown indicates the least landlord-friendly states, while green indicates laws more friendly to investors and landlords, and where it’s easiest to evict unruly, non-paying tenants.

For each state, we have a quick reference summary of landlord-tenant laws.

Out of the worst states for landlords to own rental property in, Vermont takes the throne with a 10/100 rating.

Arkansas and West Virginia, meanwhile, share the joint number one spot out of the list of states with landlord friendly laws. For a quick view, here are the top 10 states that are the most landlord-friendly. 

Now, if you need a reminder of how landlord regulations can impact your bottom line, look no further than federal and state eviction moratoriums. 

Personally, I avoid investing in all states that have regulations that favor renters, and stick with states that are at least neutral, and preferably investor-friendly. 

10 Worst Cities with Anti-Landlord Laws

Most towns and cities don’t impose their own additional landlord-tenant rules on top of state laws. But a few particularly tenant-friendly cities feel the need to put harsher restrictions on landlords. 

As you review our list of the best cities for real estate investing by rent/price ratio, consider too the state and local laws. In some cases, there’s a reason why some cities offer high cap rates — landlords still struggle to make money there. 

Without further ado, here are ten cities to avoid as a rental investor.

1. Portland, OR

A few people have asked if Oregon is a landlord-friendly state. Well, no, it’s not. 

Oregon is already one of the best states for renter’s rights. Portland, however, adds even stricter regulations, making it the worst city in the country for landlords. 

Portland bans “no-cause evictions,” an intentional misnomer that refers to landlords opting not to renew a tenant’s lease agreement. That also applies to “substantial” changes in lease terms, and rent increases of 10% or more in 12 months. 

If the landlord does any of these, they must pay the tenant relocation assistance in the following amounts:

• • Studio or Single Room Occupancy (SRO): $2,900
  • 1 Bedroom: $3,300
  • 2-Bedroom: $4,200
  • 3 Bedroom or larger: $4,500

Also, landlords must give renters at least 90 days’ notice of any rent increases, a detailed explanation of tenants’ rights, and an outline of relocation assistance amounts if applicable. 

Then, there are the security deposit restrictions. If landlords collect the last month’s rent upon lease signing, they can collect a maximum of half a month’s rent for the security deposit. If they don’t collect the last month’s rent upfront, they can collect a maximum of one month’s rent for the security deposit.

Landlords must pay the tenant interest on their security deposit and provide an accounting of all deductions within one week of move-out, plus a full rental history report and a detailed list of the tenant’s legal rights. 

Given Portland’s low cap rates and returns, it’s no surprise that most local or legacy landlords bought a long time ago. Invest elsewhere. 

2. New York, NY

Given the amount of real estate in its biggest city, I’m not surprised if people are wondering if New York is a landlord-friendly state—and it is. But surprising absolutely no one, New York City makes life extremely difficult for landlords.

It enforces the country’s largest and most complicated system of rent control and rent stabilization. Removing a rental unit from rent control to charge market rates is difficult and far from certain. 

Landlords may not charge late fees over $50 or 5% of the rent, whichever is higher. Late fees cannot take effect without a minimum five-day grace period. 

In the event of evictions, the City gives all tenants free access to legal aid services to help them fight landlords in court. Compounding matters, landlords who fail to dot every I and cross every T in eviction now face criminal prosecution and a fine of at least $1,000. 

When tenants violate their lease agreement, landlords must wait at least 30 days before starting the eviction process, during which time tenants are allowed to cure the violation. 

During the pandemic, the City froze all rent increases. Real estate prices jumped, but rents were locked. 

Again, don’t buy rental properties in New York City and find other landlord-friendly cities on the list.

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3. Washington, DC

The nation’s capital is another terrible place to be a landlord. 

Landlords must obtain a housing business license and a certificate of occupancy and register the property with the Rental Accommodation Division (RAD), which is part of the Department of Housing and Community Development (DHCD), among other red tape. 

Then come the disclosure requirements. Landlords must deliver a pamphlet published by the Rent Administrator that explains, in detail, the laws and regulations governing the implementation of rent increases and petitions permitted to be filed by housing providers and tenants. The Office of the Tenant Advocate also published a copy of the Tenant’s Bill of Rights. Then, at the end of every calendar year, the owner must post where the tenants’ security deposits are held and the interest rate for the preceding six months.

The District also limits landlords’ annual rent increases and mandates a minimum five-day grace period before landlords can charge a late rent fee.

Finally, DC limits how many people can occupy bedrooms of certain sizes — and puts the onus on the landlord to enforce their rules. For a single person to occupy a bedroom, it must have at least 70 square feet. The room must have at least another 50 feet for each additional occupant. 

4. Baltimore, MD

I grew up in Baltimore and once owned 15 properties there. I will never own real estate in Baltimore again. 

To begin with, landlords must register all rental units with the City of Baltimore and the State of Maryland, pay both fees for each unit, get a use and occupancy permit, and have each rental unit tested and inspected for lead-based paint between every tenancy. Landlords must provide a copy of the lead inspection certificate with the lease agreement. 

If the property is located in a flood zone, landlords must give the tenants notice upon signing a lease.

Landlords must give tenants a minimum ten-day grace period before charging a late fee, which is capped at 5% of the rent. 

Non-paying tenants have many ways to delay evictions. A few examples include:

o   Lack of functional and sufficient laundry, cooking, or dishwashing facilities,

o   Lack of functional refrigeration or air conditioning,

o   Lack of proper maintenance, or

o   Lack of specified recreational facilities.

I’ve had more encounters with “professional tenants” than I can count. In that 11-month eviction, the tenants broke the equipment in the property to delay the eviction. 

Making matters worse, Baltimore recently banned “no-fault evictions” like some of the other cities on this list. Landlords can’t non-renew a tenant without “just cause,” such as moving into the property themselves, making major renovations, or permanently removing the property from the rental market. 

Baltimore also now requires landlords who own ten or more units with a security deposit of at least 60% of the rent to offer one of two alternatives to a traditional security deposit: pay the deposit in three monthly installments or purchase “rental security insurance.”

I don’t invest here anymore, and you shouldn’t either. 

5. Detroit, MI

Detroit requires all rental properties with one or two units to be inspected by a third-party company licensed by the City of Detroit. They must also pass lead paint inspections between each tenancy, register with the City, and obtain a Certificate of Compliance. 

In other words, there is endless red tape just to rent out a property. No thanks. 

If it sounds fun, enjoy reading Detroit’s 25-page instruction manual for landlord compliance. 

Oh, and you can’t charge felonies against applicants when you screen tenants, either. They call this the “Fair Chance Ordinance, “ which I’m sure comforts the neighboring tenants when violent felons move in next door. 

Landlords must register a structure with BSEED Property Maintenance within 30 days of it becoming vacant. This requires more inspections and red tape. 

Failure to comply with any of these complex landlord regulations means hefty fines, by the way. 

I suggest investing in any of the thousands of other cities and towns in states that have the best landlord laws, instead. 

6. Chicago, IL

When Chicago landlords sign a lease agreement with a tenant, they must provide a security deposit receipt, keep the deposit in an interest-bearing account, and pay the tenant interest, which is set by the city comptroller and probably way lower than what the bank pays you as a depositor. 

Landlords must also provide tenants with a copy of the RLTO (Residential Landlord Tenant Ordinance).

Failure to provide any of this results in heavy fines for you as the landlord. 

If the heat breaks in your property, you can face fines of up to $500 per day if it remains broken. Landlords must also pay to eliminate all bed bug infestations, regardless of whether the tenants brought them into the property. 

Worst of all, tenants can break their lease agreement and move out early, and the landlord must make a “good faith effort” to find a replacement tenant. If a “reasonable” sub-tenant is available to move in, the landlord must accept them without charging the early mover any fees for breaking the lease.

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7. Los Angeles, CA

Over 85% of LA’s rental units fall under rent control. Even I, who knew that California wasn’t exactly a landlord-friendly state, was shocked at that figure. You can check a property’s rent control status here. 

Landlords may not raise the rent by more than 4% per year. This changes, however, so landlords must check with the City of LA before raising the rent. 

Tenants now have the right to sue landlords violating coronavirus protection regulations. If successful, tenants can win $10,000 per violation ($15,000 if the tenant is disabled or a senior). Before suing, a tenant must notify the landlord of an alleged breach, and the landlord has 15 days to address it.

If the tenant wants the landlord to perform repairs or upgrades, they can contact the Housing and Community Investment Department (HCID), initiating a city inspection process. This process is a nightmare for landlords, who can expect inspectors to have a field day pointing out changes they want landlords to make to their own properties.

And, of course, landlords can’t non-renew tenants at the end of their lease term without “just cause.” 

8. San Francisco, CA

Is it just me, or are none of these cities surprising?

San Francisco also limits rent increases, with current regulations restricting landlords to 1.7% through February 28, 2025. 

Landlords must register each rental unit with the Rent Board (which costs money, of course). Failure to register, license, or follow other red tape typically results in the landlord’s inability to evict the tenant. 

For that matter, landlords can’t non-renew tenants without “just cause,” just like several other anti-landlord cities on this list. If, for example, the landlord wants to move into their property and they non-renew the tenant, they must move into the property within three months and continue living there for at least three years. If they fail to do either, they must return the rental unit to the old tenant for the original rent amount. 

In a particularly quirky landlord law, landlords must reduce the rent if the view from their unit gets obstructed. So, the landlord’s property value plummeted because someone else built a new building, and the rent changed mid-lease. 

That said, San Francisco boasts the worst cap rates and gross rent multiplier in the country. This is just one more reason not to invest there. 

9. Dekalb, IL

All right, I spoke too soon. There is a surprise on this list. Has anyone outside of Illinois ever heard of Dekalb? I certainly hadn’t, and seeing Illinois is a landlord-friendly state just doubles the surprise. 

Landlords must provide a copy of the lease agreement in writing when the lease is signed. If tenants violate local codes or ordinances, the landlord must send them written notice or confront them face-to-face. Failure to do either comes with fines for the landlord. 

You can’t prohibit subletting, either. 

Landlords must register all units (with a fee, of course) and complete a mandatory training course before being granted a license. Further, they must designate a resident agent who lives in Dekalb County. This agent serves lawsuits on your behalf. 

Truly. 

10. Philadelphia, PA

Rounding out the ten worst cities for landlords is the City of Brotherly Love. Who also doesn’t want you to buy rental properties there?

Like most of the cities on this list, landlords must register all units with the city’s Fair Housing Commission. Which:

o   Ensures rental properties are safe, healthy, and in good condition.

o   Verifies that landlords have necessary rental licenses and certificates.

o   Educates tenants and landlords on their rights and responsibilities.

o   Connects landlords and tenants to services and assistance.

And when tenants violate their lease agreement, and you serve them with an eviction notice, the City appoints them a free attorney to defend against the eviction. Good luck getting them out of your property, no matter how they broke your lease’s rules. 

Final Thoughts on the Least Landlord Friendly States

I’ve heard many landlords shrug their shoulders at tenant-friendly rules and regulations. They glibly reply, “If landlords follow the rules, they have nothing to fear from the law.”

I can tell you firsthand that’s not true. 

I follow landlord-tenant laws to the letter. And I’ve been burned by tenant-friendly laws time and again. 

It’s your money; invest it wherever you like. But I will never invest in tenant-protective cities or states again, no matter how appealing the cap rates look on paper. It’s not worth the headaches, red tape, and endless eviction process when the tenant breaks the rules, and you pay the price. 

Consider investing in land as an additional way to invest in real estate. I now invest as much inland as I do in rental properties, with no fears of tenant lawsuits, evictions, fines, registrations, or any regulation-related hassles.♦

What are your greatest concerns about landlord-tenant regulations? Have you been burned by them before? Where and how?

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