Securing property in landlord friendly markets can be a challenge, but a critical decision that will make your life easier as a real estate investor. Sure it would be nice to invest in property near the place of your home residence, however not all homes reside in a landlord friendly market causing more challenges than you want as a landlord. Overcome these challenges using the following tips on where to find a landlord friendly market and how to avoid the unfriendly markets.
The well-known properties that reside in the “landlord friendly market” include states like Texas and Arkansas which are on the friendly list, whereas California and New York housing markets are on the unfriendly list.
A few challenges for landlords in California include the requirements of specific languages that must be included in lease agreements along with restrictions on nearly everything such as security deposit amounts and how quickly they must be returned. As for New York, there is only one crucial factor an investor needs to look at to make up their mind on this investment opportunity, and that one factor is the right to evict a tenant.This action can only be served if a landlord sue’s the tenant and take this case to court and wins. By the time you’re done losing money on lost rent and lawyers, the landlord could be out a whole year of cash flow, setting your ROI even further back.
Though the rental market has been booming in markets over the past several years, with many landlords earning double-digit returns of 10% or more, take precaution. Homes prices are continuing to rise, effecting returns for landlords in some markets where other markets still offer plenty of profits, according to reports from RealtyTrac. The report analyzed rental market conditions in 370 major U.S. counties including median home prices, average rents and unemployment rates. Keep in mind these profits are typically occurring in the landlord friendly markets, where control is on the side of the homeowners.