To be a successful rental investor and landlord, you need to purchase properties in locations that build equity, yield a positive cash flow, and have long-term profitability. To determine the best and worst states for landlords, we looked at many contributing factors, like the cost of living index, rent-to-price ratio, average monthly rent, vacancy rate, percentage of renters, and tenant well-being index score.
Based on these variables, we identified Massachusetts as the best state and Arkansas as the worst state for landlords, with various states in between. Continue reading for more details and data about each state on our list.
Data is based on national numbers from accredited websites. To review our data sources, jump to the How We Evaluated Section below.
5 Best States for Landlords in 2024
The best states for landlords generally have high average monthly rent, low vacancy rates, a high percentage of renters, and a high tenant happiness ranking—indicating strong demand for rental properties. These five best states for landlords also have high mortgage rates and median home prices; thus, people will choose to rent as they can’t afford to buy their own homes yet.
1. Massachusetts
Massachusetts stands out as the best state to be a landlord. The state boasts a high average monthly rent of $1,336, placing it seventh in the nation, indicative of a strong rental market. The percentage of renters is substantial at 37.2%, also ranking seventh, reflecting a healthy demand for rental properties. This demand is further supported by a favorable rent-to-price ratio of 38.34 (eighth), suggesting that rental investments yield significant returns relative to property values.
The community well-being index in Massachusetts is unparalleled, scoring a 71 and ranking first, a testament to the positive living conditions and satisfaction among renters. This is complemented by an overall tenant happiness rating of 6.3, the highest in the country, indicating a high level of contentment among the state’s renters. Such high levels of tenant satisfaction are crucial for landlords in maintaining low vacancy rates and stable rental income.
Economic indicators further highlight Massachusetts as an attractive location for landlords. The median household income is among the highest at $89,645 (third rank), suggesting that tenants have the financial capability to afford higher rents. Despite a relatively high average mortgage rate of 6.50% (seventh rank), the median home price is steep at $614,700 (sixth rank), which might deter homebuying in favor of renting, thereby benefiting landlords.
The cost of living index is high at 148.40 (22nd rank), yet this does not seem to discourage renters, possibly due to the state’s robust economy and quality of life. These factors collectively affirm Massachusetts’ status as a prime location for rental property investment, characterized by high rent, strong demand, exceptional tenant satisfaction, and significant income potential.
2. Hawaii
Hawaii emerges as one of the leading renter-friendly states, securing the second overall rank. This island state boasts the highest average monthly rent in the nation at $1,651, reflecting its premium living costs and desirability among renters. Despite this, the percentage of renters is notably high at 37.2%, ranking eighth, indicating a strong rental market. The rent-to-price ratio stands at 36.35, ranking ninth, suggesting that while property values are high, rental yields remain attractive, balancing the scale for landlords and tenants.
The community well-being index is impressive at 71, placing Hawaii in the second rank, mirroring the state’s high quality of life and tenant satisfaction. This is further evidenced by a solid overall tenant happiness rating of 16.7, ranking eighth, showcasing the positive living experiences of renters in Hawaii. Such high levels of tenant well-being and happiness are significant indicators of a supportive environment for renters.
Economically, Hawaii presents a robust picture with a median household income of $84,857 (seventh rank), ensuring that a significant portion of the population can manage the high cost of living and rent. The average mortgage rate is relatively low at 6.26% (47th rank), making financing a home slightly more accessible, yet the median home price is one of the highest at $720,200 (third rank), pushing more residents toward renting.
Coupled with a cost of living index of 179.00 (12th rank), the financial aspects of living in Hawaii heavily influence the rental market dynamics, making renting more appealing than buying for many residents. These attributes underscore Hawaii’s status as a renter-friendly locale, offering a high quality of life, though at a premium, amid beautiful surroundings and a strong community.
3. New Hampshire
New Hampshire positions itself as one of the best states for landlords, securing the third overall rank. The state offers an attractive average monthly rent of $1,145, ranking 17th, which is moderately high and suggests a healthy rental market. Despite a lower percentage of renters at 26.3% (43rd rank), indicating a smaller rental market than other states, the rent-to-price ratio is favorable at 34.76 (13th rank). This ratio demonstrates a beneficial environment for landlords, where rental income compared to property value is relatively high, ensuring a good return on investment.
The community well-being index in New Hampshire is commendable at 61, ranking 16th, and an overall tenant happiness rating of 7.7 (third rank) indicates high satisfaction among renters. Such positive metrics not only reflect the quality of living in New Hampshire but also suggest that tenants are likely to remain in their rentals longer, reducing turnover costs for landlords.
Economic indicators further underscore New Hampshire’s appeal to landlords. The median household income is high at $88,465 (fifth rank), suggesting that residents have the financial capability to afford rent, which supports a stable rental income for property owners.
Although the average mortgage rate is relatively low at 6.31% (40th rank), the median home price is quite high at $477,600 (10th rank), which may deter some from buying and thus increase the pool of renters. Coupled with a cost of living index of 115.00 (30th rank), these factors collectively make New Hampshire an attractive state for real estate investment, marked by strong rental demand, high tenant satisfaction, and substantial income potential for landlords.
4. Connecticut
Connecticut emerges as one of the premier landlord-friendly states, with an impressive overall rank of 4. The state commands a high average monthly rent of $1,201, placing it 13th among states, indicative of a robust rental market. With 31.1% of its population opting to rent, Connecticut shows a significant demand for rental properties despite a rent-to-price ratio of 27.32 (30th rank), which suggests moderate returns on property values for landlords.
The community well-being index stands at a high 66, ranking seventh, paired with an overall tenant happiness rating of 18.7 (13th rank), reflecting a positive living environment for renters. Such high levels of tenant satisfaction can contribute to lower turnover rates and more stable rental income streams for property owners.
Economic indicators bolster Connecticut’s status as conducive for landlords. The median household income is notably high at $83,771 (ninth rank), indicating that a considerable portion of the population can afford above-average rents, supporting a healthy rental market.
The average mortgage rate is competitive at 6.35% (29th rank), while the median home price stands at $393,700 (19th rank), suggesting that while buying a home is within reach for many, the high cost of living, evidenced by a cost of living index of 113.10 (seventh rank), may encourage a larger rental market. These factors make Connecticut an attractive location for real estate investments, offering landlords a favorable balance of high rental income potential, tenant satisfaction, and market demand.
5. Colorado
Colorado stands out among tenant-friendly states, securing the fifth overall rank. The state offers a high average monthly rent of $1,335, ranking eighth, which reflects its robust rental market and desirable living conditions. With a significant portion of the population, 37.3%, opting to rent (sixth rank), there’s a strong demand for rental properties. This is further supported by a rent-to-price ratio of 36.26, placing Colorado 10th in this metric, indicating that tenants are willing to pay a premium for housing in this region.
The community well-being index is high at 65 (ninth rank), showcasing Colorado’s commitment to maintaining quality living conditions for its renters. However, the overall tenant happiness rating stands at 27.3 (25th rank), suggesting room for improvement in tenant satisfaction. This discrepancy may point to factors outside purely economic and housing metrics, such as community engagement and local amenities, influencing tenant happiness.
Economic indicators paint a picture of a state where the population can support higher rents, with a median household income that complements the cost of living. The average mortgage rate is relatively high at 6.51% (sixth rank), making homeownership more challenging and potentially encouraging renting. The median home price is notably high at $580,900 (seventh rank), aligning with the state’s high cost of living index at 105.50 (sixth rank), which could further drive the preference for renting over buying.
These factors collectively affirm Colorado’s status as a tenant-friendly state, where despite high living costs, the rental market thrives, supported by a significant demand for rental properties and a focus on tenant well-being.
5 Worst States for Landlords in 2024
Contrasting with the five best states for rental properties, we also evaluated the five worst states for landlords. These states generally have low average monthly rent, high vacancy rates, low percentage of renters, and low tenant happiness ranking—indicating weak demand for rental properties. These five worst states for landlords also have lower mortgage rates and median home prices, meaning that people will choose and can afford to buy their own homes rather than rent.
1. Mississippi
Mississippi, ranking 47th overall, exhibits a mixed economic landscape. With a cost of living index of 85.30 (25th rank), it balances affordability against a backdrop of financial challenges. The state records the lowest median household income nationally at $48,716 (51st rank), alongside an anomalously high average mortgage rate matching the median income figure, placing it at the fifth rank. This peculiarity suggests a skewed housing finance market. Despite these financial constraints, the median home price is relatively accessible at $271,200 (42nd rank), hinting at a preference for home ownership over renting.
This is further underscored by a modest rent-to-price ratio of 28.64 (25th rank) and an average monthly rent of $789 (47th rank), indicating a softer rental market. The rental vacancy rate stands at 6.5% (29th rank), with a low percentage of renters at 25.7% (46th rank), reinforcing the trend toward homebuying.
However, the state sees a robust year-over-year rent value change of 13.93% (second rank), signaling a potentially increasing interest in renting. Despite these economic dynamics, community well-being and tenant satisfaction are notably poor, with scores of 46 (50th rank) and 34.0 (41st rank), respectively, reflecting challenging living conditions for many residents.
2. Oklahoma
In Oklahoma, which ranks 48th overall, the economic indicators reveal a nuanced picture of the housing and rental markets. The state’s cost of living index is relatively low at 86, ranking 37th, suggesting a modest affordability in general expenses. Median household income is on the lower end at $55,826 (44th rank), paired with an average mortgage rate of 6.33% (37th rank), indicating financial strains for homeowners and potential buyers.
The median home price is $278,700 (38th rank), which is moderately low, showing a somewhat accessible real estate market for buyers. Despite this, the rent-to-price ratio of 28.39 (26th rank) and an average monthly rent of $818 (44th rank) suggest that renting is not particularly favorable compared to home ownership, reflected in the rental vacancy rate of 8.5% (41st rank). Notably, the percentage of renters is higher at 31.0% (28th rank), hinting at a significant rental population despite unfavorable conditions.
However, the year-over-year rent value change shows a decrease of 4.06% (45th rank), suggesting a declining rental market. The community well-being index and average tenant happiness rate are both low, at 51 (45th rank) and 48 (ranking around 46.3), respectively, indicating a less satisfactory living environment for homeowners and renters. These factors collectively point to a challenging housing and rental landscape in Oklahoma, with implications of financial stress and lower satisfaction among its residents.
3. Louisiana
Louisiana, ranking 49th overall, emerges as one of the worst states to own rental property, underpinned by a series of less-than-ideal economic indicators. Despite a moderate cost of living index at 92 (19th rank), suggesting relative affordability in general expenses, the state struggles with a low median household income of $52,087 (49th rank). The average mortgage rate stands at 6.28% (46th rank), contributing to the financial pressures faced by homeowners. The median home price is relatively low at $257,400 (45th rank), which does not translate into a thriving rental market.
This is evidenced by a low rent-to-price ratio of 24.49 (39th rank) and an average monthly rent of $876 (32nd rank), indicating that rental income might not be as lucrative as other states. The rental vacancy rate is high at 10.1% (47th rank), signifying a surplus of available rental properties compared to demand. Additionally, the percentage of renters at 31.2% (26th rank) shows a significant rental population, but the slight year-over-year rent value increase of 2.14% (28th rank) suggests a stagnant market.
The community well-being index score and average tenant happiness rate are low, at 53 (43rd rank) and 42.3 (50th rank), respectively, reflecting the challenging living conditions and general dissatisfaction among residents. These factors combined paint a bleak picture for rental property owners in Louisiana, highlighting the economic and social challenges of the market.
4. West Virginia
West Virginia stands out as one of the worst states to be a landlord, anchored at the bottom with an overall rank of 50. The state’s cost of living index is relatively low at 90.30, placing it at 49th, yet this does not translate into favorable conditions for rental property owners. The median household income is among the lowest in the nation at $51,248 (50th rank), coupled with an average mortgage rate of 6.41% (20th rank), indicating a financially strained populace.
Despite a somewhat higher median home price of $304,400 (32nd rank), the rent-to-price ratio is extremely unfavorable for landlords at 34.65 (49th rank), reflecting poor rental yield potential. The average monthly rent is the lowest nationally at $732 (51st rank), further exacerbating the challenges property owners face. The rental vacancy rate is high at 9.3% (45th rank), suggesting a lack of demand for rental units.
This situation is compounded by the lowest percentage of renters in the country at 20.6% (51st rank), highlighting a market with minimal rental activity. Although there’s a notable year-over-year rent value increase of 9.70% (eighth rank), this silver lining does little to offset the overall grim outlook for landlords.
The community well-being index score is moderate at 50, but the average tenant happiness rate is low at 33.3 (38th rank), indicating discontent among the limited rental population. These factors collectively underscore the significant challenges and limited profitability facing landlords in West Virginia, making it a particularly tough market for rental investments.
5. Arkansas
Arkansas, positioned at the absolute bottom with an overall rank of 51, starkly illustrates why it’s one of the toughest states for real estate investment, particularly for those looking to become landlords. Despite a seemingly attractive cost of living index at 90.30, placing it fourth for affordability, the state’s economic indicators spell out a challenging environment for rental property owners. The median household income is low at $52,528 (48th rank), coupled with a high average mortgage rate of 6.25% (49th rank), suggesting financial pressures on potential renters and buyers alike.
The median home price is not particularly high at $258,100 (43rd rank), but this does not translate into a vibrant rental market, as seen in the rent-to-price ratio of 28.30 (27th rank) and an average monthly rent of $760 (50th rank), indicating modest returns for landlords.
Arkansas’ economic and community well-being indicators further contribute to its position at the bottom of the list for landlords. With a median household income of $52,528, ranking it 48th, the state reflects broader economic constraints that may affect tenants’ ability to afford higher rents. The average mortgage rate of 6.25% places Arkansas among the states with higher financing costs, potentially discouraging property purchases and investments.
The rental vacancy rate is alarmingly high at 11.9% (50th rank), one of the highest nationally, pointing to a surplus of rental properties not met with adequate demand. Despite this, the percentage of renters is relatively high at 32.3% (22nd rank), suggesting that while a significant portion of the population opts to rent, the market remains oversaturated. The year-over-year rent value change shows a minor increase of 3.65% (25th rank), offering a small glimmer of growth in rental income potential.
However, the community well-being index score is low at 49 (49th rank), and the average tenant happiness rate is equally dismal at 40.7 (49th rank), painting a picture of widespread dissatisfaction among residents. These factors collectively underscore Arkansas’ position as a particularly challenging market for landlords, characterized by low profitability, high vacancy rates, and overall tenant discontent.
Complete Data & Rankings for Each State
If you’re exploring the best and worst states for landlords, take a look at our interactive map below. Click on your state to see how it ranks across different evaluation categories and find out where it stands in comparison to the best states for landlords.
Rankings for Each State
To see the complete information used to conduct our study, click here for all the data. You can also check our 20 Key Real Estate Rental Statistics in 2023 for more data about the rental market.
How We Evaluated the Best & Worst States for Landlords
To determine the best states for landlords, as well as the least landlord-friendly states, we examined factors that indicate a state’s rent-to-price ratio, demand driven by market appreciation and population, and tenant satisfaction. In particular, we evaluated 13 data points that culminate in the following three key metrics:
Overall Key Metric | Metric Components |
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Rent Versus Buy Ranking |
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Rent Potential Ranking |
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Tenant Happiness Ranking |
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Based on the significance of each metric to the possibility of a good return on investment (ROI), each category was assigned an equal weight of 33.33%. After that, we calculated an overall rating by averaging the scores for each state.
Frequently Asked Questions
The states of Mississippi, Oklahoma, Louisiana, West Virginia, and Arkansas are considered some of the least landlord-friendly states due to various factors affecting landlords’ abilities to efficiently manage their properties, secure their investments, and navigate the legal landscape surrounding tenant relations. In these states, eviction laws may offer more protection to tenants compared to other states, making it time-consuming and costly for landlords to evict tenants who fail to pay rent or violate lease terms.
While not applicable to all states mentioned, areas within these states may have rent control regulations that limit how much landlords can increase rent. This can make it difficult for landlords to adjust rent prices to match market rates or cover increased property maintenance costs and taxes. Some of these states have specific regulations that limit the amount landlords can charge for security deposits, which may not fully cover the costs of damages caused by tenants. This could potentially result in financial losses for landlords.
Massachusetts might have the strongest tenant rights. In this state, tenants are entitled to a wide array of rights to ensure a safe and habitable living environment throughout their tenancy, underpinned by the State Sanitary Code. This code, enforced by local Boards of Health, sets forth standards to protect tenants’ health, safety, and well-being, encompassing provisions for adequate water supply, heating, kitchen facilities, pest control, and the maintenance of structural elements to keep properties weathertight, rodent-proof, and in good repair.
Additionally, for water and heating, specific conditions dictate the responsibility for costs, with landlords generally bearing the expense unless stipulated otherwise in the lease. Kitchens must have essential amenities in good repair, and landlords must address infestations and maintain structural integrity to ensure the dwelling is fit for its intended use. Massachusetts law also empowers tenants to address issues when landlords fail to maintain properties in a habitable condition.
According to our data and research, Hawaii ranks first in average monthly rent, which might imply that this state is where landlords make the most money. The state has an average monthly rent of $1,651 and stands out as a prime location for landlords seeking to maximize their rental income. This high rental average is likely influenced by Hawaii’s unique combination of limited land availability, high demand for living spaces due to its desirable location and climate, and a strong tourism industry.
Bottom Line
Rental investors and landlords looking to maximize their returns should meticulously analyze the real estate market before diving into rental property investments. Optimal investment decisions are often made by choosing a state with favorable conditions such as a low cost of living index, high rents, a significant percentage of renters, and low vacancy rates. However, it’s also crucial to be aware of the worst states for landlords and maintain flexibility in investment strategies across various markets.