Worst States for Landlords in 2026: 10 States That Make Rental Investing Painful

Not every state wants your rental property business. Some have built legal frameworks so heavily tilted toward tenants that the economics of buy-and-hold investing barely work — even in otherwise strong rental markets.

This isn't a political judgment. It's a financial one. When evictions take 6+ months, security deposits are capped at one month, rent increases are restricted, and tenants can withhold rent for minor maintenance complaints, your cash flow projections need to account for these realities.

This guide details the 10 worst states for landlords in 2026, explains the specific laws that make them challenging, and provides practical workarounds for investors who choose to operate in these markets anyway — because sometimes the appreciation, rent levels, or personal reasons make it worthwhile despite the headwinds.

How We Ranked These States

Each state was evaluated on factors that directly reduce landlord profitability and control:

The 10 Worst States for Landlords

1. New York — Pain Score: 9.8/10

New York is the single hardest state to be a landlord in the United States, and it's not close.

Eviction Timeline: 90–365+ days In New York City, evictions regularly take 6–12 months. Outside NYC, the timeline is somewhat shorter (60–120 days) but still among the longest in the country. The 2019 Housing Stability and Tenant Protection Act (HSTPA) eliminated several landlord-favorable provisions and added new procedural hurdles.

The Laws That Hurt:

• Rent stabilization: Approximately 1 million units in NYC are rent-stabilized, with annual increases set by the Rent Guidelines Board (2025–2026 increase: 2.75% for 1-year leases, 5.25% for 2-year). Landlords cannot deregulate units upon vacancy.
• Good Cause Eviction (2024): New York enacted statewide "good cause" eviction protections, requiring landlords to provide a legitimate reason for non-renewal. "Unreasonable" rent increases (defined differently by court) can be challenged.
• Security deposits: Capped at one month's rent statewide. Landlords must return deposits within 14 days with an itemized statement.
• Rent overcharge claims: Tenants can file overcharge claims going back 6 years, with treble damages for willful violations.
• Right to counsel: NYC provides free legal representation to tenants in eviction proceedings in certain zip codes, dramatically reducing default judgments.
• Lease renewal rights: Tenants in rent-stabilized units have a near-absolute right to renew.

The Numbers:

Workarounds:

• Target upstate markets (Buffalo, Rochester, Syracuse) where timelines are shorter and Good Cause provisions are less aggressively enforced
• Focus on properties with fewer than the applicable unit threshold for certain regulations
• Use rigorous [tenant screening](/blog/best-property-management-software-2026) — credit score minimums of 650+, income verification at 3x rent, and thorough reference checks
• Build 4–6 months' vacancy reserve per unit into your pro forma
• Consider only buying in areas with strong appreciation to offset regulatory drag

2. California — Pain Score: 9.5/10

California's Tenant Protection Act of 2019 (AB 1482) created a statewide rent cap and just-cause eviction framework that fundamentally changed the landlord landscape.

Eviction Timeline: 60–180+ days California's eviction process involves a 3-day notice (pay or quit), followed by an Unlawful Detainer filing. In theory, the process takes 30–45 days. In practice, court backlogs, tenant delays, and COVID-era procedural carryovers push timelines to 2–6 months in most metro areas. Los Angeles County averages 4–6 months.

The Laws That Hurt:

• AB 1482 rent cap: Annual increases limited to 5% + local CPI (max 10%) for properties 15+ years old
• Just cause eviction: Required for tenancies exceeding 12 months. "No-fault" just cause (owner move-in, substantial renovation) requires relocation assistance of one month's rent
• Local rent control: Cities like Los Angeles, San Francisco, Oakland, Berkeley, and Santa Monica have rent control ordinances more restrictive than AB 1482
• Security deposits: Capped at one month's rent for unfurnished, two months for furnished (as of 2024 SB 567 updates)
• Habitability standards: California's [implied warranty of habitability](/blog/landlord-tenant-law-basics) is among the most expansive, with tenants able to withhold rent, "repair and deduct," or abandon the lease for violations
• Source of income discrimination: Landlords cannot refuse Section 8 voucher holders

Workarounds:

• Buy properties less than 15 years old (exempt from AB 1482 rent cap, but not just-cause provisions)
• Single-family homes are exempt from AB 1482 if certain notice requirements are met
• Target inland markets (Sacramento, Fresno, Bakersfield) where court systems are less backlogged
• Price your initial rents at market rate — the cap restricts increases, not the starting point

3. New Jersey — Pain Score: 9.2/10

New Jersey's tenant protections are among the most comprehensive in the country.

Eviction Timeline: 60–180 days New Jersey evictions must go through the Landlord-Tenant Division of Superior Court. The process includes mandatory mediation in many counties, adding weeks to the timeline. Contested cases routinely take 3–6 months.

The Laws That Hurt:

• Anti-Eviction Act: One of the strongest in the country — landlords can only evict for specific enumerated causes, even at lease expiration. Non-renewal without cause is not permitted for most residential tenancies.
• Rent control: Over 100 municipalities in NJ have some form of rent control or rent leveling ordinance
• Security deposits: Capped at 1.5 months' rent. Must be held in an interest-bearing account. Annual interest statement required.
• Truth in Renting Act: Requires landlords to provide tenants with a DCA-approved statement of rights at lease signing
• Senior/disabled protections: Enhanced protections against eviction for tenants 60+ or disabled
• Property taxes: Highest in the nation at 2.13% average effective rate

Workarounds:

• Focus on owner-occupied 2–3 unit properties (some Anti-Eviction Act exemptions apply)
• Target townships without municipal rent control ordinances
• Factor NJ's extreme property taxes ($8,000+/year on a $400K property) into every pro forma
• Build legal costs into your budget: $3,000–$5,000 per eviction is typical

4. Massachusetts — Pain Score: 8.9/10

Massachusetts combines strong tenant protections with high operating costs and aggressive enforcement.

Eviction Timeline: 60–150 days The "summary process" in Massachusetts isn't very summary. After a 14-day notice to quit (or 30 days for no-fault), landlords file in Housing Court. Discovery, motions, and trial scheduling push timelines to 2–5 months. The state's "no-fault" eviction process (for lease expiration) is functionally identical in timeline to for-cause evictions.

The Laws That Hurt:

• Security deposits: Capped at one month's rent. Must be held in a separate, interest-bearing account in a Massachusetts bank. Landlords must provide an itemized receipt within 30 days. Failure to comply = tenant entitled to treble damages.
• Last month's rent: If collected, must also be held in interest-bearing account with annual interest paid to tenant
• Rent control: Cambridge and Brookline are pursuing re-implementation; Boston may follow. Currently no statewide rent control, but political momentum is building.
• Chapter 239 protections: Tenants can raise counterclaims (habitability, retaliation, discrimination) that convert a simple eviction into a full trial
• Retaliatory eviction protection: Landlords cannot evict within 6 months of a tenant complaint to a housing authority
• Winter eviction challenges: While not legally prohibited, courts are reluctant to issue writs of execution during winter months for tenants with children or elderly

Workarounds:

• House hack with FHA: owner-occupied 2–3 units have some procedural advantages
• Meticulous record-keeping on security deposits — MA's treble damage penalty is strictly enforced
• Budget $5,000–$8,000 per eviction (legal fees + lost rent)
• Focus on suburban markets (Worcester, Springfield, Lowell) where court systems are faster

5. Illinois — Pain Score: 8.6/10

Chicago's unique tenant ordinances create a landlord minefield within an already challenging state framework.

Eviction Timeline: 45–120 days Illinois eviction timelines vary dramatically between Chicago (longer) and downstate (shorter). Chicago's Residential Landlord and Tenant Ordinance (RLTO) adds procedural requirements beyond state law. Statewide, a 5-day notice is required for non-payment, followed by Forcible Entry and Detainer proceedings.

The Laws That Hurt:

• Chicago RLTO: Requires specific lease disclosures, prohibits certain lease clauses, mandates interest on security deposits, and provides tenants with a private right of action for RLTO violations
• Security deposits (Chicago): Must be held in a federally insured interest-bearing account. Interest must be paid annually. Failure to comply = tenant entitled to two months' rent + attorney fees.
• Just Cause for Eviction Ordinance (Chicago, 2023): Requires just cause for eviction in Chicago, including a prohibition on non-renewal without stated cause
• Right to purchase: Chicago tenants in buildings being converted to condos have a right of first refusal
• Cook County eviction protections: Additional procedural requirements beyond state law

Workarounds:

• Invest downstate (Springfield, Champaign, Peoria) where RLTO doesn't apply and courts are faster
• If investing in Chicago, use a property manager who specializes in RLTO compliance
• Keep meticulous records of all disclosures, deposit handling, and maintenance requests
• Join the Chicago chapter of the Chicagoland Apartment Association for legal resources

6. Connecticut — Pain Score: 8.3/10

Connecticut's combination of high property taxes and strong tenant protections creates dual headwinds.

Eviction Timeline: 45–120 days Connecticut requires a "Notice to Quit" with various timeframes depending on the cause (3 days for non-payment, 15 days for [lease violations](/blog/dealing-with-problem-tenants)). After the notice period, the landlord files a Summary Process action in Housing Court. Hearings are typically scheduled 2–4 weeks out, but continuances and appeals can extend the process to 3–4 months.

The Laws That Hurt:

• Security deposits: Capped at 2 months' rent (or 1 month for tenants 62+). Must be held in escrow. Interest paid annually.
• Retaliatory eviction protection: Strong protection for 6 months after tenant complaints
• Implied warranty of habitability: Broadly enforced; tenants may withhold rent for violations
• No "self-help" evictions: Strictly prohibited, with criminal penalties
• Property taxes: 1.63% effective rate — among the highest in the Northeast
• Rent increase restrictions: While no statewide rent control, proposed legislation is under active consideration (2025–2026 session)

Workarounds:

• Focus on the more affordable eastern Connecticut markets (New London, Norwich) where property prices are lower
• Target properties in good condition to minimize habitability claims
• Screen heavily — Connecticut's eviction timeline makes bad tenant selection extremely costly

7. Oregon — Pain Score: 8.1/10

Oregon was the first state to enact statewide rent control (2019), and has continued adding landlord restrictions since.

Eviction Timeline: 45–90 days Oregon's eviction process requires specific notices depending on the cause: 72 hours for non-payment (increased from 72 hours to 10 days during COVID, now back to 10 days for most of 2024–2026 provisions), 30 days for no-cause evictions (first year of tenancy), 90 days for no-cause after first year.

The Laws That Hurt:

• SB 608 rent control: Annual rent increases capped at 7% + CPI (max 10%) for properties 15+ years old
• Mandatory relocation assistance: Landlords must pay one month's rent in relocation assistance for no-cause evictions and certain rent increases exceeding 10%
• Just cause eviction: Required after the first 12 months of tenancy
• Portland-specific: Additional tenant protections including mandatory relocation fees of up to 3 months' rent, screening criteria limitations, and required acceptance of the lowest screening criteria among applicants
• Security deposits: Capped at two months' rent (Portland: further limited based on screening criteria)
• Source of income protection: Landlords cannot refuse Section 8 or other government assistance

Workarounds:

• Buy properties less than 15 years old (exempt from SB 608 rent cap)
• Invest outside Portland where local add-on regulations don't apply
• Set initial rents at full market — the cap limits annual increases, not your starting point
• Factor relocation assistance into your vacancy budget

8. Washington — Pain Score: 7.9/10

Washington State's tenant protections have expanded significantly since 2021.

Eviction Timeline: 30–90 days Washington requires a 14-day pay-or-vacate notice for non-payment. After filing an Unlawful Detainer, courts schedule hearings within 7–20 days. The Right to Counsel program in King County (Seattle) and other jurisdictions provides free legal representation to tenants, significantly reducing default judgments.

The Laws That Hurt:

• Just cause eviction (SB 5600, 2021): Statewide just cause required for all evictions. Landlords need a specific enumerated reason.
• Notice requirements: 60 days' notice for rent increases; 120 days for increases exceeding 10%
• No late fees cap: Late fees are limited to the greater of $75 or 1.5% of monthly rent
• Source of income protection: Cannot discriminate against voucher holders
• Seattle-specific: Additional notice requirements, mandatory lease renewal, relocation assistance for certain tenants, and inspection requirements
• Winter eviction moratorium (Seattle): De facto moratorium during extreme weather events

Workarounds:

• Invest outside Seattle/King County for less regulatory burden
• Spokane, Tri-Cities, and Vancouver WA offer WA's no-income-tax advantage without Seattle's tenant ordinances
• Document all just-cause bases meticulously — Washington courts scrutinize eviction reasons
• Use fixed-term leases with clear renewal/non-renewal provisions

9. Hawaii — Pain Score: 7.7/10

Hawaii's unique geography, limited housing supply, and strong tenant protections create a challenging landlord environment.

Eviction Timeline: 45–90 days Hawaii requires a 5-day notice for non-payment. After filing a Summary Possession action in District Court, hearings are scheduled within 15–25 days. The limited court infrastructure (only 4 circuit courts statewide) can create bottlenecks.

The Laws That Hurt:

• Security deposits: Capped at one month's rent. Must be returned within 14 days.
• Rent trust fund: Tenants can petition to pay rent into a court trust fund if landlords fail to address habitability issues
• Mandatory disclosures: Extensive disclosure requirements including mold, flooding history, and noise
• Retaliatory eviction protection: 6-month protection period after complaints
• Property taxes: Vary by county (Honolulu: 0.35% for owner-occupied, 1.05% for investment). [Investment property rates](/blog/dscr-loan-interest-rates-explained) are 3x homeowner rates in Honolulu.
• Insurance: Among the highest in the nation ($3,000–$6,000/year) due to hurricane and volcanic risk
• GET tax: Hawaii's General Excise Tax (4%–4.5%) applies to rental income — effectively a gross receipts tax on landlords

Workarounds:

• Focus on short-term vacation rentals where legally permitted (higher revenue can offset higher costs)
• Target Maui and Big Island for lower property taxes vs. Oahu
• Factor GET into every pro forma — it's 4–4.5% of your gross rent, not net
• Maximize deductions through [cost segregation](/blog/depreciation-real-estate-guide) studies

10. Maryland — Pain Score: 7.5/10

Maryland's tenant protections have strengthened considerably in recent years, particularly in the Baltimore metro area.

Eviction Timeline: 45–90 days Maryland's eviction process begins with a "Notice to Quit" (varies by county). District Court handles evictions, with hearings typically within 10–21 days of filing. However, contested cases with tenant defenses can extend to 2–3 months. Baltimore City's rent court handles a massive volume of cases, creating backlogs.

The Laws That Hurt:

• Security deposits: Capped at 2 months' rent. Must be held in a separate account. Interest paid on deposits held for 6+ months.
• Rent stabilization (Baltimore, proposed): Active proposals for rent stabilization in Baltimore City
• Right of first refusal: Montgomery County tenants have a right of first refusal when rental properties are sold
• Just cause (local): Baltimore County and several jurisdictions have enacted or proposed just-cause eviction requirements
• Access to counsel: Baltimore City provides free legal representation in eviction proceedings
• Lead paint liability: Maryland's strict lead paint disclosure and remediation requirements create significant liability for landlords of older housing stock (pre-1978)

Workarounds:

• Focus on newer construction (post-1978) to avoid lead paint liability
• Target Maryland's Eastern Shore or Western Maryland where regulations are lighter than the Baltimore/DC corridor
• Budget for lead testing and remediation if buying older homes in Baltimore
• Join the Maryland Multi-Housing Association for legal resources and tenant screening tools

Full Comparison Table

The True Cost of Operating in Tenant-Friendly States

Let's quantify the impact. For a $300,000 rental property generating $2,000/month in gross rent:

Cost of One Eviction

One bad eviction in New York can wipe out 1–2 years of cash flow. In Texas, it's a manageable quarterly setback.

Annual Regulatory Compliance Costs

Should You Avoid These States Entirely?

Not necessarily. Here's when investing in tenant-friendly states can still make sense:

1. Appreciation Markets

California, New York, and Massachusetts have historically delivered 4–6% annual appreciation. If your strategy is long-term wealth building through equity growth, the regulatory headwinds may be acceptable as a cost of accessing appreciating markets.

2. High Rent-to-Income Ratios

Markets in these states often support rents that deliver positive cash flow despite higher costs — if you execute well. A $400,000 Brooklyn brownstone unit renting for $3,500/month can cash flow after all costs, including the regulatory premium.

3. Value-Add and BRRRR Strategies

The BRRRR strategy (Buy, Rehab, Rent, Refinance, Repeat) can work in any regulatory environment because the value creation happens on the rehab/refinance side, not the ongoing management side.

4. Short-Term Rentals

Where legally permitted, short-term rentals in high-demand tourist areas of these states (NYC, LA, Portland, Hawaii) can generate 2–3x long-term rental income, offsetting regulatory costs. But check local [STR regulations](/blog/best-states-for-airbnb-investing) carefully — many of these states also restrict short-term rentals.

The Bottom Line

The 10 states on this list aren't bad places to invest. They're bad places to invest without preparation. If you're going to operate in New York, California, or New Jersey, build the regulatory costs into your pro forma from day one:

• Add 3–6 months vacancy reserve (vs. 1–2 months in landlord-friendly states)
• Budget $5,000–$15,000 per eviction (vs. $1,000–$3,000)
• Hire a tenant-law attorney before you need one
• Screen ruthlessly — your best protection in a tenant-friendly state is never having to evict

The investors who succeed in these states treat the regulatory environment as a cost of doing business — like property taxes or insurance. The ones who fail are those who ignore it.

Data sources: State statutes and municipal codes (current as of January 2026), Nolo's 50-state eviction guide, National Apartment Association policy tracker, Tax Foundation data, individual municipal housing authority publications. Eviction timelines are estimates based on typical contested proceedings and may vary by court jurisdiction.

Related Articles

• Property Taxes Explained: How They Work and How to Reduce Them
• [Complete Guide to [Rental Property Tax Deductions](/blog/rental-property-accounting-guide) for Landlords (2026)](/blog/rental-property-tax-deductions)
• [The Complete Rental [Property Tax Guide](/blog/property-tax-guide) for 2026: Every Deduction, Schedule, and Strategy](/blog/rental-property-tax-guide-2026)