How Much Does an Eviction Really Cost You?

Evictions are disruptive and expensive to your real estate rental business, but stay in the industry long enough, and you’ll no doubt be faced with one. As a property owner, you may have a laundry list of reasons for getting rid of a bad tenant, commonly it is for non-payment of rent. A thorough screening process should help reduce signing leases with tenants that will burden you with the ordeal, but they aren’t infallible. Let’s take a look at how much an eviction can really cost you.

Loss of Rent

Since the eviction process takes time, be ready to absorb two to six months of rental income, depending on what state you are in. Let’s use a national average rental monthly payment of $1300. That two to six months it takes to evict someone will equal $2600 to $7800 in lost rents.

Attorney Fees

Court proceedings can be tricky, so you’ll want to hire an attorney to file the proper paperwork and to advise you. The process is complex, and all documents need to be accurate—one misstep, and you may find yourself starting from the beginning again. If you’re lucky, you’ll find a lawyer to work for a flat fee, but others may charge you their standard hourly rate. Few lawyers charge less than $150/hr, but many earn $400/hr. If a case gets ugly, drags on or ends up going to trial, that could translate into a steep final bill. On the low end, expect to pay around $500, but don’t be surprised if the final invoice is upwards of $1,000.

Court Costs

Filing the needed paperwork with the court system will cost a few dollars. If the tenant challenges the eviction, additional filings will be needed to defend your case. One can safely estimate filing fees between $100-$500, so let’s use a median of $300.



Removal of Personal Property

If the tenant has left behind belongings, you’re responsible for removing and storing their property for the legally specified length of time in your area. These costs, again, will vary greatly depending on how much property requires removal and the size of the storage unit. Keep in mind that a company like Got Junk? charges as a percentage of the truck space used. A couch and a couple of end tables will run you about $175. So if you get stuck clearing out a semi or fully furnished three-bedroom rental, expect to pay around $1,000-$2,000.

Vacancy Cost

In addition to the loss of rent, you may still have a mortgage payment, then, of course, there are costs associated with filling the vacancy. You’ll incur extra costs for cleaning, advertising, screening new tenants—and repairing damages. With the average cost of readying a property around $2,000, not including major repairs, it’s safe to assume a loss of about $3,000, as evictees often take out their frustrations on their soon-to-be old home.

Avoiding evictions is not always as easy as it may seem, but there are few easy ways to help prevent accepting bad tenants. Firstly, do thorough, routine background checks to help weed out any undesirables. Secondly, max out the security deposit as a way of eliminating applicants that may have trouble meeting their monthly bills. Thirdly, make sure to check references from previous landlords. They can give some useful insight into an applicant’s character. Lastly, consider contracting a property management company to run your properties. They are experienced in dealing with evictions and are more preemptive. This will accelerate up the whole process. Many PMs can complete an eviction within 60 days, which can save you a significant amount of money.

As you can see, your losses are not only a result of lost rental payments, and those costs can add up quickly. You can safely expect to incur lost earnings ranging from $5000-$8000 to get rid of those nightmare tenants. In addition to your financial burden, you have to account for your wasted time and frustration. The easiest way to help prevent the ordeal is to enforce a strict screening process and to implement detailed standard operating procedures (SOPs). This way, employees will know how to deal with issues before a situation gets out of hand and leads to an eviction. Unfortunately, proper screening isn’t a cure-all, as slumtenants can always slip through the cracks; it is your first line of defense.