How Much Do Evictions Actually Cost Landlords? 

Bad rental outcomes are something new and seasoned investors dread. When it comes to bad outcomes, evictions are a worst-case scenario for most Landlords. Evictions are expensive, time-consuming, and stressful. 

For most owners and property managers, they’re a last resort after missed rent payments, ongoing Lease violations, or illegal or dangerous activity on the property. 

The bad news is that evictions are more expensive than most Landlords realize. But, the good news is that the right systems can dramatically reduce the risk of evictions and other bad rental outcomes. 

To help you avoid this Landlord nightmare, here’s an in-depth look at how costly evictions are and some tangible ways to reduce the risk of having to evict a Tenant. 

Required Steps in the Eviction Process

To appreciate how costly evictions are, it’s helpful to understand the required steps in the eviction process. While specific requirements vary from state to state, the general process for filing an eviction includes: 

1. Providing your Tenant with the required notice. Most evictions are the result of either nonpayment of rent or a Lease violation. Before filing an eviction, Landlords must issue a Notice to Quit that states the reason the notice is being sent and gives the Tenant a specific amount of time to either pay rent, cure the Lease violation, or vacate the property. The notice period varies from state to state but is usually between 3 days and 14 days. 
2. If the Tenant fails to pay rent, cure the Lease violation, or vacate the property after the required notice period, the next step is filing an Eviction Complaint with the local court. In addition to filing the Complaint, you must service the Tenant with the Complaint and a Summons. 
3. The Tenant can either answer the Complaint or wait to respond at the hearing. 
4. After a scheduled hearing, the judge will rule in favor of either the Landlord or Tenant. If the judge rules in favor of the Landlord, you’ll receive a Court Order or Warrant of Eviction stating that the Tenant has to vacate the property by a specific date.
5. If the Tenant does not comply with this Court Order, you can ask a local law enforcement officer to remove the Tenant and their possessions from your property. 
6. Once the Tenant is removed from the property, the Landlord must change the locks, remove all personal property of the tenant, make necessary repairs, and deep-clean the property. After the property is cleaned and back in good condition, the Landlord can list it and begin searching for a new Tenant. 

A Breakdown of Eviction Costs for Landlords 

The entire eviction process usually takes around 2-3 months and costs landlords an average of around $3,500. That said, the cost of evictions can range from around $2,000 to $10,000. 

Here’s a breakdown of expenses Landlords face during a standard eviction: 

Legal Fees 

We always recommend that Landlords hire an experienced local attorney to handle their eviction. While this can be expensive, it’s worth the cost to ensure that your eviction is handled correctly, that you’re successful, and that you comply with all laws. 

The legal fees for an uncontested eviction generally start around $500. However, if your case is contested, these fees can easily be around $1,000-$2,000.

Court and Filing Costs

Every state has fees for filing an Eviction Complaint. These range from $15 to $150. In addition, there are court fees, which are usually around $50. Landlords also must pay a service fee to have the Summons served on the Tenant, which ranges from $30 to $150. 

If law enforcement is required to remove the Tenant after a Warrant of Eviction is issued, this is an additional fee that usually ranges from $50 to $500. 

Unpaid Rent 

Past due rent is the most common cause of eviction proceedings. Whatever the reason for your eviction, likely, you won’t receive any rent payments during the eviction process. Eviction proceedings generally take around 2 to 3 months. 

To allow time for all steps of the eviction process plus time to prepare the property for a new Tenant, Landlord should anticipate a minimum of three months with no rent payments. Using the average rental price in the United States of $1,554, that would be a loss of around $4,662 for the average Landlord. 

Property Repairs and Turnover Costs 

Once the Tenant is removed from the property, the Landlord has to: 

• Change the locks ($150)
• Make necessary repairs, which can range from a couple of hundred dollars to thousands of dollars depending on the condition of the property 
• Deep clean the property ($200 – $500)

In some states, Landlords are also required to store any personal possessions left behind after an eviction. This means additional work and fees for Landlords.

It’s worth noting that, in addition to the many tangible expenses of evictions, they are time-consuming and stressful for Landlords to deal with. Evictions mean lots of additional work, hours, and nuisances for Landlords. 

Be Proactive About Reducing the Risk of Evictions

Given how difficult and expensive evictions are, real estate investors should be proactive about preventing evictions. Fortunately, the right property management systems can drastically reduce the risk of bad rental outcomes. 

Here are three steps to help you avoid evictions: 

1. Always screen tenants. Effective tenant screening ensures that you only rent to qualified applicants who will pay rent on time and take care of your property. Screening all applicants and only renting to qualified applicants is the best way to prevent evictions. 
2. Use a detailed Lease Agreement that provides clear guidance on rental policies, property rules, and late fees. At move-in, go over the Lease with your new Tenants and ensure they understand all Lease terms. 
3. Be consistent about enforcing the Lease and proactive if a Tenant violates the Lease. If you’re consistent about enforcing Lease terms, including late fees, you reduce the risk of Tenants falling behind on rent. If Tenants do fall behind on rent, be proactive about addressing it. If your Tenant is communicating with you, try to work with them to come up with a plan to get them back on track. If your Tenant is not willing to work with you, consider a Cash for Keys Agreement or move forward with a Notice to Quit for Nonpayment. The longer you wait, the more costly and difficult the process becomes. 

 

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Reduce Your Risk of Evictions With Good Screening & Property Management 

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