Best states to Landlord in?

[Thomas Mehi]

In your experience what are the states that care about the property owner and are best to be Landlords in? I know to shy away from Ca, NY and NJ. I am currently looking in Tennessee North Carolina and possibly Alabama. Thoughts and experiences?

[Jim K.]

For years now, I've been looking at this question. It pops up from time to time here in the forums. I live and landlord in Allegheny County in western PA. Pennsylvania is generally not considered to be landlord-friendly and Allegheny County, where Pittburgh is located, is supposed to be among the most tenant-friendly counties in the Commonwealth.

First of all, I would say this question matters less and less as you go up the rental property scale. You are going to have the most squabbles in C-class properties, far fewer in B-class properties, and almost none in A-class properties. In you invest in D-class properties, well, you should think about having your own organized crime gang to back you up and not worry about legal recourse.

I invest in what I'd call C-minus class properties in my area, kept from being D by several factors, chief among which is that Pittsburgh is certainly not criminal-friendly. I've had multiple evictions so far. What I've found is that at least 75% of the game really comes down to the way you work with the local magistrates in the areas you have your rentals in.

Are you organized and do you have extensive documentation when you show up to court? Do you not waste everyone's time by trying to evict for frivolous causes that you could have easily avoided by actually communicating with your tenant? When the clerk and judge see your face, do they come to understand that you're bringing them a serious problem that they should be involved in? Do you understand that this is a business-related relationship you need to nurture carefully?

Things get done if you're repeatedly on the ball and work with the legal system instead of insisting on getting the most favorable possible treatment from the court that you possibly can. Things don't get done if you leave room for doubt, whine and complain, insist that things have to always go your way and on your schedule. That's how the actual legal nuts and bolts of all magistrate-related disputes go, regardless of what state you invest in.

Now I have seen a number of incompetent small-time third-party property managers line up to present their cases to the magistrates here. They don't have anything in order, they don't do squat to document anything properly, they're nervous as a prostitute in church, they have no idea why they have to put on a tie and write things down, they sound like illiterate bumpkins in front of the judge presenting their cases, and they obviously resent having to be there at all, doing one of the most labor-intensive and least profitable activities for property managers. I get it. A lot of people are nervous before the law and cover it up with bravado. But you can't act like a cheap hood in front of a judge.

That's really why things go against them. But as soon as the rulings go against them, I've heard them call their customer landlords and start whining, invariably placing the blame for the situation on how tenant-friendly Pittsburgh is. They did their best, the ruling went against them, and it's not their fault, no, never.

So from my perspective, I think that when researching property managers for OOS investing, it's very important to understand how they, personally, deal with the legal system. I think it's a lot more important than choosing to invest in State A because it's supposed to be a bit more tenant-friendly than State B. But nobody ever seems to ask about that sort of thing here on Bigger Pockets. It's always presented like a mathematical equation here. Find the most-tenant friendly state, invest in the most tenant-friendly state, don't worry if your property manager wears jeans and workboots to his court appearance (I've seen it more than once) and when presenting dates of eviction-related tenant interactions uses phrases like "Uh-huh, mebbe coupla days ago..."