Why the True Cost of an Eviction Is (Much) Higher Than You Think

On The Market

BiggerPockets

News, Investing, Business, Education

4.8 • 820 Ratings

🗓️ 31 October 2024

⏱️ 38 minutes

🔗️ Recording | iTunes | RSS

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Summary

Evictions suck—for everyone. They’re bad for the property owner, the tenant, and America as a whole. On the lowest end of the spectrum, evictions cost Americans over $14,000,000,000 (that’s BILLION) per year. With this massive sum spent on court fees, attorneys, moving trucks, and lost rent, how do we STOP evictions before they happen? What can landlords do to ensure they NEVER have to kick out another tenant for nonpayment? Today, we’re discussing the true cost of evictions and how to avoid them. We’ve brought our own Market Intelligence Analyst, Austin Wolff, back to the show to share how much evictions cost for the landlord, how much they cost to the tenant, and how much they cost society. We’re breaking down which costs hurt real estate investors the most during the process and how long it may take you to get a non-paying tenant out of your house. Once you’ve been seriously sticker-shocked by the price of an eviction, James brings us some actionable steps he uses daily to avoid evictions at his rentals. He recently had one of the worst evictions, costing him SIX FIGURES. He shares what to do so this DOESN’T happen at your investment property, plus the type of rental you can provide that attracts the highest-quality tenants. In This Episode We Cover The astronomically high cost of evictions in the United States How long evictions usually take, and why they often drag out months (or even years) The cost of an eviction to a tenant and the fees they have to pay once they’re forced to leave How to avoid evictions from the start by following some quick tips from James The key to maintaining a high rent collection rate in your rental portfolio (fewer evictions) What to do if you inherit tenants you suspect WON’T pay once you purchase the property Overall economic impacts of evictions and why we MUST reduce them And So Much More! Links from the Show Join the Future of Real Estate Investing with Fundrise Join BiggerPockets for FREE Property Manager Finder Dave's BiggerPockets Profile James' BiggerPockets Profile Austin's BiggerPockets Profile 6 Strategies That Help Landlords Avoid Evictions Grab “The Book on Managing Rental Properties” Evicted Book Jump to topic: (00:00) Intro (02:23) Most Expensive Eviction Ever? (05:23) Cost/Time It Takes to Evict (14:11) The Cost to Tenants (18:57) Serious Economic Effects (22:47) How to Avoid Evictions (29:44) Inheriting Tenants (What to Do) (32:09) Astronomical Total Costs Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/on-the-market-265 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [email protected]. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	What is the most expensive eviction you've ever had to deal with?
0:04.0	Coming out of the pandemic, actually, I lost about $175,000.
0:08.0	What?
0:09.0	There's an estimated 2.7 million evictions filed every single year.
0:15.0	It's a little bit harder to find tenants right now.
0:18.0	And so the question I get is, should I lower my standard for tenants?
0:29.6	Hey, everyone, it's Dave. Welcome to today's episode of On the Market for this discussion. I am
0:35.1	joined by my friend James Dainert. James, thanks for being here.
0:39.3	Thanks for inviting me to this pleasant conversation, Dave. I mean, I'm excited to talk about
0:43.7	evictions. Yeah, I mean, it's not a pleasant conversation, but it's, it is sort of just an
0:48.4	unfortunate reality for real estate investors. And it's an unfortunate reality for tenants as
0:53.6	well. No one wants to find themselves in the situation. But, you know, as of. And it's an unfortunate reality for tenants as well. No one wants to
0:54.8	find themselves in the situation. But as of now, it still happens. And so I think the best that we
1:00.2	could do as investors is figure out how to mitigate our risk of invictions and sort of minimize
1:06.0	the impact that evictions have on our own investing and on the tenants that we're working with.
1:11.9	Yeah, it's all about prevention. It's no different than like preventing property damage later.
1:15.9	Like if you take preventive measures, proper screening, proper maintenance, your investment does
1:20.7	better. Absolutely. And to sort of bolster our conversation here, we're going to pair James'
1:26.1	tons of on the ground-ground expertise with some
1:29.8	research that our analyst at Bigger Pockets here, Austin Wolf, has done for us on eviction.
1:36.1	He's actually looked into and come up with specific numbers for what the average eviction
1:41.1	costs for a property owner, for the tenant, and for society as a whole.
	...

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