Last Updated on October 21, 2023 by Kelvin Nielsen
Yes! Alabama is one of the most landlord-friendly states in the country. If you are thinking of making a real estate investment, Alabama is a great place to start. The following are a couple of reasons that make Alabama a landlord-friendly state for real estate investors.
1. Property taxes are some of the lowest in the country.
Matter of fact, the property tax rates in Alabama are the second lowest after Hawaii. While the national average stands at a whopping $2,578, homeowners in Alabama only get to pay about $609 in annual property taxes. This is at least according to SmartAsset.
2. Landlords don’t need a rental license.
Some states require landlords to have acquired a license in order to run a rental investment. This isn’t the case in Alabama.
3. The eviction process in Alabama is relatively straightforward.
As a landlord in Alabama, you have broad powers to evict your tenant. You can evict your tenant for the following reasons.
- Nonpayment of rent.
- Violation of the terms of the lease agreement.
- When a tenant intentionally provides false or misleading information on their rental application.
- Failure by a tenant to move out at the end of their lease.
- In the absence of a lease agreement.
- When a tenant violates a health, building, safety, or a housing code.
- When a tenant engages in illegal acts.
You must follow the proper eviction process to remove a tenant from their rented premises, though. You cannot attempt to remove the tenant by removing their belongings, shutting down their utilities, or locking them out.
4. There is no requirement to pay interest on a tenant’s deposit.
Unlike some other states, Alabama doesn’t have any specific requirements for how a landlord must store their tenant’s security deposit. In addition to this, you’re also not required to pay any interest on a tenant’s deposit. (Alabama Code §§ 35-9A-201 and 35-9A-301.)
And when it comes to returning the tenant’s deposit, you’ll have 60 days to do so. In some other states, the period can be as soon as within 21 days.
5.There is no rent control law in Alabama.
The state of Alabama doesn’t have a rent control law in place. This basically means that you can charge your tenants whatever you want for rent. That said, it pays to keep the amount reasonable in order to ensure your property remains competitive in the market.
Furthermore, you’re legally allowed to raise rent without having to notify your tenant. Just make sure that you don’t do it in a discriminatory manner or as a retaliatory act.
6. There is no cap on late fees.
As a landlord in Alabama, you are allowed to charge your tenant a fee for late payment of rent. And you can charge whatever amount of late fees as you wish as there is no cap imposed by law.
7. There are no additional protections under the antidiscrimination laws.
As a landlord, it’s unlawful to discriminate against your tenant on the basis of certain protected classes. The protected classes under the federal Fair Housing Act are race, color, disability, nationality, sex, familial status, and religion.
But unlike some other states, Alabama doesn’t have additional protections besides those offered at the federal level.
8. Tenants are barred from withholding rent for repairs.
As a landlord, you have a responsibility to provide your tenant with a habitable rental property. AL Code § 35-9A-204 outlines that landlords must provide, among other things:
- Hot and cold running water.
- A functioning heating, ventilating and cooling system.
- A functioning electrical and plumbing system.
- Safe stairs and railings.
- Adequate trash receptacles.
- Functioning smoke detectors.
In some states, if you fail to do so, especially after repeated notifications from your tenant, tenants may have a right to withhold rent or repair the issue themselves then deduct the appropriate costs from future rent payments. This isn’t the case in Alabama. Tenants don’t have a right to neither withhold rent nor to deduct repair costs from future rent payments.
They can, however, sue you or report you to public officials for failure to keep the property in a habitable condition.
Disclaimer: The content herein isn’t a substitute for advice from a professional attorney. It’s only meant to serve educational purposes. If you have a specific question, kindly seek expert attorney services.
Hi, I’m Kelvin Nielsen, an experienced landlord and accomplished real estate lawyer. My focus is on answering your questions about renting in the hopes of making your life as a renter or a landlord a bit easier.