The True Cost of Evicting a Tenant

September 18, 2019

Nobody likes to dwell on worst-case scenarios, but wise landlords expect the best and prepare for the worst. When tenants stop paying rent, break the law or cause a life-threatening disturbance, there’s no question they have to go. However, most situations aren’t that simple and evicting a tenant can be a costly production. They often fall into a gray area of sporadic payments and repeated nuisances- and you may end up weighing the cost vs. consequence.

How much do you really want your tenant gone? How much will it be worth in terms of your physical well-being and anxiety levels? How likely is it that your next tenant will be equally troublesome or worse?

As is the case with all other types of legal filings, eviction should be your very last resort. The question here is not what is right and just, but which actions make the most sense when you balance the financial impact of the eviction against your quality of life.

While back rent and other costs can be included in the case you file, you are unlikely to ever recoup full payment from a tenant who can’t pay rent or does not respect the authority of law. You can avoid many problems by pre-screening tenants, but if eviction is impending here’s what to do.

Steps in Eviction

The eviction process varies greatly state to state, even county to county, but it will generally follow this pattern:

A) You inform the tenant that they must pay back rent in full or cease specified activities. You give them a date to move out before eviction proceedings begin.

B) If you haven’t resolved it by the above date, you file paperwork with the appropriate court. The clerk normally sets a court date and issues a summons to the tenant.

C) You go to court. The judge decides what you are owed and when the tenant must vacate.

D) The court gives you a “writ of possession” allowing law enforcement to remove the tenant.

E) Once the tenant is out, it may be up to you or law enforcement to remove whatever they left behind.

F) You change the locks, advertise the vacancy, and commit to choosing better tenants next time.

For a complete breakdown of your local eviction processes, check out our state law guides.

Cost Breakdown

Direct Costs

Legal filing costs: $400 to $700 (varies greatly by region)

Attorney fees: from $500 to $10,000

Clean up: up to $1,000

Lock change: up to $300

Opportunity costs due to lost rent: $3693 or more (average rental price in U.S. = $1,231 x three months typically)

Indirect Costs

Reputational costs (how other tenants feel and what they say to new tenants about the eviction of a neighbor)

Brand devaluation (unflattering, one-sided stories told about you on social media and review sites)

Possible Additional Costs

Repair of damaged property and furnishings: average of $2,000

Law enforcement fees: average $170 ($90 service fee plus $80 per deputy)

Estimated Total: Around $11,000

Alternative Options

In most states, it is illegal for you to simply changes the locks or shut off power to the property without a court order. You also cannot legally threaten the tenants or make life so unbearable that they will want to leave. If you want the tenants to vacate the property, you will need to make a private arrangement with them or go through the courts to process a legal eviction.

While there is no reliable data on how many evictions there are each year, millions of renters have to move involuntarily every year. One surprising finding from an in-depth study of renters in the Milwaukee area is that formal evictions make up less than a quarter of these forced moves.

Nearly half of all forced moves (48 percent) were due to informal agreements, such as landlords who offer unwanted tenants a small fee as an incentive to move out ASAP. While offering a good deal to a bad tenant (i.e., a $200 move-out bonus) may not sit well with your sense of fair play, it is certainly far less painful, financially and emotionally, than a $10,000 write-off to fund lengthy legal proceedings that could dramatically lower the value of your property while damaging your relationship with other tenants. Sometimes it’s all worth it, but it also makes sense to seek out some solid legal advice before you head down that path.

Originally published on Groundwork

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