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Top 5 Worst States to be a Landlord
14 Plays2 months ago
🎧 Welcome to Thoughts For Rent — the podcast where real estate gets real (and local)!
Hosted by Jenni McKenna, a Las Vegas born and raised seasoned broker, and Owner of McKenna Property Management, this show is your inside look at what’s really happening in the Vegas property management and real estate world. With over 20 years of experience herself - Jenni brings not just knowledge, but heart to the conversation.
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In this episode, we’re covering what the top 5 worst states to be a landlord in are! We used the article from the Rental Housing Journal, who used the stats from Turbo Tenant to determine these top five states.
Click the link below to see the full link: https://rentalhousingjournal.com/the-10-worst-states-to-be-a-landlord/
McKenna Property Management, proudly managing Las Vegas homes since 2005 (and loving every minute of it).
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Transcript
Introduction and Topic Selection
00:00:20
Irelynn Zurflueh
Hi, everyone. Welcome back to Thoughts for Rent. Realtors keeping it real. As always, i am Ireland and this is Jenny McKenna. And she has actually picked the subject today. so it's going to be a really exciting one.
00:00:34
Irelynn Zurflueh
So we're diving in because, of course, um you guys may already know
Worst States for Property Investment
00:00:39
Irelynn Zurflueh
this. Ireland and I work for McKenna Property Management. And I wanted to find out what the worst states to own property ah investment property in.
00:00:50
Irelynn Zurflueh
So I found this great article. It's very relevant. um It's actually through Turbo Tenants 2025. They compile all the data. And we're going to dive in and see what the five worst states are. But at the same time, we're going to compare Nevada because we're experts in Nevada. So we're going to do that. So you guys are going to get some good information about other states as well as what Nevada does for property investors.
00:01:16
Irelynn Zurflueh
Perfect. So we ended up, um or Jenny actually ended up finding an article from, I believe, where what are they called? What's the company called? It's like real estate journal. It's like real ah real property management journal.
00:01:29
Irelynn Zurflueh
But they got their stats from and ah the Turbo Tenants report of 2025. So that's actually where that information came from. So we so it's not our information. We're not grabbing this just willy nilly. We actually have the data that is being brought to us for this.
00:01:45
Irelynn Zurflueh
So Turbo Tenant, they gave their top five. And so we'll start at the the, we'll start at number five and then we'll end up at number one. But number five for um Not the best place to be a landlord is Illinois. Oh my gosh. Wait till hear this. Well, first let's tell everybody what was the criteria of this.
00:02:04
Irelynn Zurflueh
So what Turbo Tenant did is they decided that they were going to look at it from these criterias, the tough eviction laws and slow court systems. So that was on there.
00:02:15
Irelynn Zurflueh
Rent control restrictions, which is a hot button. Actually, it's a hot button in the big, beautiful bill that just got passed. So there's going to be some more information about that.
00:02:26
Irelynn Zurflueh
And then high property taxes and then tenant favoring legislation. I like to call that anti-landlord legislation. They made a nice little fluffy a sentence called tenant favoring legislation.
00:02:42
Irelynn Zurflueh
So that was the kind of the criteria that got these states on this five worst states to own property in. Okay, so now start with the Illinois one, which is going to flabbergast
Illinois vs. Nevada: Eviction Process
00:02:55
Irelynn Zurflueh
you. So ah with Illinois, at least with this report, They said that because of of the backlog of the courts, there are some counties that are experiencing up to two years. Oh, no, you didn't say two years, did you?
00:03:08
Irelynn Zurflueh
Yes. Two yeah years to get a nonpaying tenant out of a property? Yes. Are you crazy? ah not in sha Not in Illinois. What the heck are they thinking in Illinois?
00:03:20
Irelynn Zurflueh
That is insane. So in Nevada, and nonpaying tenant, how quickly can we get them out, Ireland? So in Nevada, we really only exist in three city districts, and they're all in the same county.
00:03:35
Irelynn Zurflueh
Clark County is huge, if anyone wants to look it up. It's a lot of space. And then because we service the southern Nevada area, we only have to deal with North Las Vegas, Las Vegas, and Henderson, which I always find interesting because you go to California or you go to other cities, and there are there's like 20 cities or like 20 different counties. So the fact that we only have to deal with one county in three cities is definitely unique.
00:04:03
Irelynn Zurflueh
I think that helps our court system out a lot. And with Henderson, Las Vegas, they're pretty fast. Honestly, I would say like we can get a judgment in about two to three weeks. North Las Vegas is a little bit behind. They're a little bit more delayed, but even then that really only extends to about four weeks, maybe five weeks. So we're still looking at less than two months.
00:04:22
Irelynn Zurflueh
Most of the time we're looking at a month, The whole process in and of itself might take close to 60 days, but when we actually want to get in front of a judge and actually start that process, it's pretty quick.
00:04:35
Irelynn Zurflueh
I like to say Nevada is the wild, wild west, baby. Pay your rent or get out. And the courts favor us in that. I mean, when I first started, i would tell you i could get i could get a nonpaying resident out in three weeks.
00:04:51
Irelynn Zurflueh
That was 20 something years ago. However, it has gotten a little bit longer. And I think that's just because of the number of rentals that have come into the Valley. I don't necessarily think the system has changed. It's just the amount of new rentals that mean more court hearings. Yeah. But yeah, in Nevada, we'll get them out in 60 days, guys. So compared to Illinois, that's a, oh, let's see, a one year and 10 months faster.
00:05:19
Irelynn Zurflueh
than what they can do there in our lovely Illinois. And let's not forget, Illinois has high property taxes, which is also what makes it a tough environment and is the reason why they nailed number five on the top five.
00:05:35
Irelynn Zurflueh
ah worst places to own a rental property. Okay. Can I do the next
Impact of Rent Control in Oregon
00:05:39
Irelynn Zurflueh
one? Sure. So the next one is a little close to my heart because my husband, Max, loves this state, has always wanted us to move there. And I have said, ah ni no, no.
00:05:51
Irelynn Zurflueh
And now this gives us another good reason to not transfer our money, retirement money into any kind of real estate there. And the state is Oregon.
00:06:03
Irelynn Zurflueh
Ducks. Yeah, go Ducks, right? Or Beavers, right? However, Oregon made headlines as being the first state in the United States that passed the statewide rent control.
00:06:17
Irelynn Zurflueh
What were they thinking, Ireland? They were being tenant friendly. But even then, I don't even think it's to the betterment of the tenant when you really look at it long term either. I am not a big fan of rent control. And Oregon, you're the first state to make it statewide.
00:06:35
Irelynn Zurflueh
All of the other states we're going to talk about, there's different areas and cities that that have it, but not as a full statewide. I think that One of the issues when it comes to rent control, because there's a lot of back and forth, obviously people are going have different opinions, but if you are telling an owner that there's a cap, that there's a rent control, I think what that owner will do no matter what is get to that cap.
00:07:05
Irelynn Zurflueh
So in Oregon, they're at 7% right now. And I believe that that means that every time there's a renewal, every time that that cap is a possibility, that owner is going to choose the 7%, is going to take it all the way to the max.
00:07:18
Irelynn Zurflueh
And I think that what can happen sometimes and what we see here in Vegas or in Nevada is that Our owners might wait till vacancy to make that adjustment. So if they have a really good resident in place, they might keep it a little lower or they might be a little bit more lenient to them when it comes to the funds.
00:07:37
Irelynn Zurflueh
Because then when it goes back on the market, they can adjust to the market accordingly. So we've actually seen a couple people who have been in the property maybe for seven to 10 years. And then that rent might go up by $300 because that owner really appreciated that resident and was keeping them at a reasonable rate.
00:07:56
Irelynn Zurflueh
But if you're in a place that has rent cap as an owner, you might get nervous and not have that opportunity to make that large jump during vacancy. And so you're just always going to choose the 7%.
00:08:07
Irelynn Zurflueh
And so then these people and these residents are always going to have to deal with a 7% increase where if you leave it up to the actual market, One year it might be 3%. One year it might be 9%. One year it might be nothing, no increase. So I think that when you put a cap on things, people tend to always choose to go to the max.
00:08:27
Irelynn Zurflueh
But if you don't put a cap on things, then you actually have the chance to pick and choose and actually base it off of your experience with that resident, the market, the city. And I just don't think all those things are being considered when you do a rent cap.
00:08:41
Irelynn Zurflueh
And that is why Ireland should have won every debate thing she Did did you ever go into debate? Nope. She should. Isn't she good at explaining those things? I think that that was a very good explanation on that.
00:08:53
Irelynn Zurflueh
The other thing to know in Oregon, which you're going to hear this quite a few times on the next dates, is it is really difficult to get a resident out of a lease.
00:09:04
Irelynn Zurflueh
So in Oregon, they call it a, they, they don't have what's called a no cause eviction. They actually have, um they name it something, to something else like um lease violation eviction or something. But basically there's only certain guidelines that you can follow in Oregon in order to actually not renew the lease with the resident, which makes it really tough.
00:09:29
Irelynn Zurflueh
Because you could have a resident in there completely violating the lease. And if it doesn't fall into the one of six categories of specific reasons you can evict, you are stuck holding on to that lousy resident.
00:09:44
Irelynn Zurflueh
So that is number four, which is Oregon. And this report didn't talk about it, but I'm also pretty sure Oregon and Washington squatters rights, which is crazy. And we may be talking, oh, you know what?
00:09:55
Irelynn Zurflueh
Washington didn't make the top five. Washington was in the top 10, but not the top five. And you're right. They do have squatter rights. There shouldn't even be rights in the same sentence next to a squatter. What the heck?
00:10:10
Irelynn Zurflueh
Sometimes, you know, what that that might be why i love property management, because it makes you constantly stay on your toes and you have to be up top on top of all of the new legislation so that your voice can be heard so that you don't have things get passed in your state that have squatters rights in that bill.
00:10:30
Irelynn Zurflueh
Okay. So what's the next one, Ireland?
New Jersey and New York: Challenges for Landlords
00:10:32
Irelynn Zurflueh
Number three. Number three is New Jersey. There's a trend. a lot of these are on the East coast. I've noticed. I've noticed that too. um New Jersey has um really high taxes.
00:10:43
Irelynn Zurflueh
Tell everybody what their property tax is. two point 2.49%. Let's just call that 2.5. That's a 2.5% if you're ever going to call it. What's Nevada's property tax? Nevada's average sits at right around 1%. 1% compared to 2.5%.
00:11:02
Irelynn Zurflueh
five percent That right there means I'm not going to be buying some rental properties in New Jersey. Absolutely. They also have some jurisdiction jurisdictions in New Jersey where they have done rent caps as well.
00:11:16
Irelynn Zurflueh
It's not statewide, but there are certain areas where they can do that rent cap, which always makes it kind of tough. And I loved when they said um under the the article, they said, um and yeah, in New Jersey with the slow courts, it makes evictions really tough.
00:11:36
Irelynn Zurflueh
Yeah. So that's the first time they actually like said really tough. Even in Illinois with the two-year mark, they didn't say really tough. So there must be some other factors going on in New Jersey.
00:11:47
Irelynn Zurflueh
It's like the cobweb of li litigation. And so they just said it's really tough. yeah So the next one is number two. Number two is not going to surprise anyone. I don't think number two or number one is going to surprise anyone. No, i don't. think Number two is our lovely little state called York.
00:12:07
Irelynn Zurflueh
york And New York is just strange when it comes to property management, what a resident can and cannot do.
00:12:18
Irelynn Zurflueh
The thing that's a little mind boggling to me in New York, and I'll let you talk kind of about how the rent control and what their increases are and and what it can't be. But do you know that if you raise your rent with the resident in New York, they can appeal it?
00:12:34
Irelynn Zurflueh
They can appeal it. They don't own the darn thing and they can appeal that rent. So that one, again, won't be buying any property to rent out in New York.
00:12:46
Irelynn Zurflueh
That's going to be a place I continue to visit, love, watch Broadway plays, eat some great food. um enjoy the walk in Central Park, but we're not going to be buying any rental property there. Yeah.
00:12:59
Irelynn Zurflueh
but It was marked as one of the more, honestly, one of the most resident-friendly and tenant-friendly. um So that kind of factors into the idea to appeal um And then that also factors into I think they also are trying to do couple rent caps and things of that nature. yeah um And then their eviction process, you also have to be very specific with ah what the eviction is about.
00:13:23
Irelynn Zurflueh
Yeah, that one's a tough one. New York, love you, but not going to be buying any property there anytime soon. And then we've got some time to talk about the number one grandiose, the state that is the hardest to own rental property.
00:13:40
Irelynn Zurflueh
Drum roll. Okay, Ireland, tell everybody.
California's Challenges for Landlords
00:13:43
Irelynn Zurflueh
it is California. I don't think that surprises anyone. Anyone that has had California rental property, feel free to comment on some of the experiences that you have had down below or dm us and let us know because there are some stories I've heard about California rental laws.
00:14:04
Irelynn Zurflueh
ah One that's off the top of my head is from a couple. She did get a divorce and this is coming from the owner. So I, this is obviously just taking everything at the owner's word, but the owner said that at the divorce, she was single mom and she was in his rental property and she couldn't pay rent.
00:14:26
Irelynn Zurflueh
And he tried to evict her and get this. It took over four years. four years to get that resident out. And I asked the owner, I said, what were you getting any money whatsoever, any compensation?
00:14:42
Irelynn Zurflueh
He said, no. And I had to pay for the court in order to get the eviction. And you're going to die about this. He still had to keep up with all the repairs.
00:14:53
Irelynn Zurflueh
So during that time, there was a water heater and an AC that had to be replaced during the time that she lived there with absolutely no income coming in. Maybe you could look at it with the silver lining. You want to know the silver lining on that one? What?
00:15:07
Irelynn Zurflueh
Well, if rent had been coming in, the owner would have been paying about 13% in their state income tax. Yep. Did you guys hear that? 13% on money that you made off of a property that you've got all the headache on but your state is going to take 13% of it.
00:15:30
Irelynn Zurflueh
Well, that right there, ladies and gentlemen, is one of the reasons I am not calling a realtor and buying properties in California. So with that said, anything else about California that you want to add? That was kind of thing I remembered, that the eviction law is being so tough in that high state income tax.
00:15:47
Irelynn Zurflueh
Yeah, no, the high state income tax is definitely crazy, especially when you compare it to Nevada that has none. Wait, what? Yeah. Really? i say that very sarcastically. Hopefully that is coming across.
00:16:00
Irelynn Zurflueh
That is one of the most beautiful things about Nevada. We don't have a state income tax. Make your money. Buy that rental property, rent it out.
00:16:11
Irelynn Zurflueh
If they're not paying, let's get them out. Let's go to court if there's a lease violation and get that resident to get back into compliance with the lease. All of that is done relatively easy here in Nevada.
00:16:26
Irelynn Zurflueh
And when you make your money, you keep your money. And I think that's the way it should be. Yeah, absolutely. Yeah. So if you got any fun stories, I would love to hear it.
00:16:37
Irelynn Zurflueh
I have been in the business since 1993. Ireland's been around the block quite a few years as well. We love to have stories from other states. Our states are kind of like Nevada is a little bit on the non-drama side.
00:16:53
Irelynn Zurflueh
i would say so, yeah. Yeah. So we don't really get to dish too much tea out. So if you've got something, make sure that you reach out to us. Let us know. If you'd like to talk a little bit further about some of the other states that are on this list, and we will um put that link in there for the article.
00:17:09
Irelynn Zurflueh
Yes. So the article the top 10. we only went off the top five. um but yeah yeah, if you want to do a little bit more research or if you've got some information and you want to to dive into some of the other states, we'd be happy to do it because I love dishing the tea on the other
Recap and Final Thoughts
00:17:24
Irelynn Zurflueh
states.
00:17:24
Irelynn Zurflueh
Absolutely. we We're big Nevada fans anyway. So anytime we get a chance to brag, we will. That's true. So you've got it here. Our rundown of the five toughest states to be a landlord right now in 2025. Fifth, Illinois. Fourth, Oregon.
00:17:42
Irelynn Zurflueh
Third, New Jersey. Second, New York. And the last and the first to get the worst... state-owned property in would be California. Californication. That's right.
00:17:57
Irelynn Zurflueh
So you want to end it out? I think we've been with everybody for 17 minutes. They probably got to go on with their day. Hopefully they found this interesting and I'll let Ireland take us out. yeah Yeah, of course. Well, like she said, if you have any comments, questions, stories, feel free to comment below.
00:18:12
Irelynn Zurflueh
Feel free to subscribe if you like listening to this stuff and we'll see you guys next week. And share this episode. If you've got somebody that lives or has rental property in any one of those states, share this so that they can kind of have a chuckle.
00:18:25
Irelynn Zurflueh
And then make them move to Nevada. Yes. And until next time, invest smart, stay informed, and keep your properties profitable. Bye, guys.