The True Cost of Eviction is More Than $5,000

Hindsight is 20/20, and when you’re in the middle of an eviction, it’s easy to say “I should have screened better”.

Simply put, eviction it’s the act of removing a tenant by force and it’s generally quite expensive for the landlord.

But how expensive is it really?

There are two common ways of evicting a tenant. One method is legal, the other is not.

Formal Eviction (Legal)

The formal eviction process varies from county to county, but it generally looks something like this:

1. Give proper written notice to the tenant to remedy the situation (i.e. pay up), or vacate. Notice requires vary by state.
2. Terminate the lease after the tenant does neither.
3. Immediately file an “unlawful detainer” action with your local county court system.
4. Serve the tenant a summons to appear in court (if the court doesn’t do that for you)
5. Attend the hearing, win the eviction judgment (and a financial judgment, if allowed)
6. Get a “writ of possession”, which is a court order allowing you to hire the Sheriff to remove the tenant by force.
7. Wait for the Sheriff to pencil-you-in, and show up at the property at the scheduled day/time.
8. The sheriff will remove the tenant (by force if necessary), but then you are usually left to remove the belongings (also varies by state).
9. Change the locks so the tenant can’t get back in.

Related: How to Evict a Tenant – The Eviction Process in 8 Easy Steps

Potential Costs of a Formal Eviction:

• Lost Rent: $3,000
  Unpaid rent before, during, and after the eviction proceedings (3 months)
• Lawyer: $500
  Legal fees to an attorney, if you hire one.
• Court Costs: $150
  Court filing and administrative fees (varies by county).
• Sheriff: $50
  Fees to hire the Sheriff to execute the Writ of Possession.
• Locksmith: $150
  To change the locks on the day of the eviction.
• Repairs: $1,000
  Malicious damage and junk removal – although less since you didn’t lock them out.
• Cleaning fees: $500
  Do you really think they are going to clean if you evict them?

Cost of Formal Eviction: $5,350

Obviously, these numbers will vary depending on your rent price, county, and whether or not your tenant vacates willingly. From what I’ve heard from other landlords, tenants do less malicious damage if you go through the court system.

Self-help Eviction (Illegal)

Not just anyone is allowed to evict a tenant. In fact, in most states, landlords and managers are prohibited from taking matters into their own hands.

When a tenant refuses to pay rent, it’s extremely tempting to change the locks and shut off the essential utilities – especially if the landlord is paying for them. But this is called a “self-help” eviction, and it’s illegal in almost every state (except Texas, I think).

Potential Costs of a Self-help Eviction:

• Locksmith: $150
  Because you decided to change the locks while your tenant was at work.
• Broken Window: $150
  Caused by tenant regaining access when you weren’t looking.
• Lawyer: $700
  To help you get out of hot water when the tenant takes you to court over a “self-help” eviction.
• Court Costs: $1,000
  Because the Judge ordered to you pay the tenant’s court costs and legal fees.
• Lost Rent: $3,000
  3 months of lost rent while you try to evict him the legal way.
• Court Costs (again): $200
  To go back and do it again. This time you win the judgement.
• Locksmith (again): $150
  The locksmith chuckles as he changes your locks again.
• Repairs: $2,000
  Malicious damage and junk removal.
• Cleaning fees: $500
  Do you really think they are going to clean if you evict them?

Cost of Self-Help Eviction: $7,850

Evictions Never Pay-Off

With the costs of formal evictions being more than $5,000, I’d rather just do a better job screening on the front-end. But if a tenant is a dead-beat, you need to get them out of the property, and find a tenant who will actually pay.

Again, hindsight is 20/20.

I’d rather just do a better job screening on the front-end.

Sure, you could win a judgement against the tenant for your losses, but winning a financial judgement and collecting on it are very different things. Are you really going to be able to collect from someone who can’t even pay rent? Maybe…. but probably not immediately.

Even so, professional collections agencies typically only have a ~17% success rate.

Do you think you can do better? I wouldn’t be able to.

Wage and tax refund garnishments are useful in some situations, but impossible if the tenant doesn’t have a job or documented income. Further, I think Federal employees are exempt from garnishments.

How to Prevent Evictions

The best way to deal with a bad tenant is to make sure they never move in.

If you do a thorough job screening tenants up front, you’ll prevent 99% of your evictions before they happen.

Personally, I run a credit report and background check on every applicant. I’m putting my asset on the line, and I need to make sure that whoever moves in will take care of it.

Potential Screening Costs

• Traditional companies or property managers: $25-$300/applicant
• Online screening companies: $10-$60/applicant
• Integrated Screening Tools: Free for Landlords

I prefer to use Cozy for full detailed credit and background reports, because it integrates with online applications and rent collection.

Cozy is FREE for landlords, and only costs $24.99 for the applicants per report. I simply tell my applicants that there is no other application fee apart from paying for the screening directly through Cozy. It’s nice not to have to handle application fees anymore.

Related: The Landlord’s Guide to Tenant Screening

Next Steps

You have a choice. Will to take the time to screen well up front, or pay for it later? If you think that tenant screening takes too long, learn how it do it in less than an hour.

• Formal Eviction: >$5,000
• Quality Screening through Cozy: $0

Start Screening Better Tenants, Try Cozy

I’m really curious, how much do you spend on tenant screening?

Let me know in the comments below.