On The Market

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

Oct 31, 2024

James Daynard, a seasoned Seattle real estate investor, joins Austin Wolff, a Market Intelligence Analyst at BiggerPockets, to delve into the staggering costs of evictions in America, totaling over $14 billion annually. They discuss the financial burden on landlords and tenants, stressing the emotional toll on affected families. James shares his personal $100,000 eviction experience and offers actionable tips for landlords to minimize risks. The conversation also highlights proactive tenant screening strategies to attract reliable renters and prevent costly evictions.

39:53

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Episode guests

Austin Wolff

James Daynard

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Quick takeaways

Evictions cost the U.S. economy over $14.5 billion annually, impacting landlords, tenants, and communities beyond individual financial losses.

Implementing thorough tenant screening and offering incentives can significantly reduce eviction instances and foster better landlord-tenant relationships.

Deep dives

The Financial Burden of Evictions on Landlords

Evictions can impose a significant financial burden on property owners, often resulting in substantial losses. One investor shared an experience of losing approximately $175,000 due to pandemic-related eviction complications, highlighting the potential for costs to accumulate during lengthy legal processes. The research indicates that the primary expenses incurred by landlords during evictions include holding costs, legal fees, and repairs needed for the property post-eviction. A single eviction can quickly escalate to costs ranging anywhere from a few thousand to over $60,000, heavily impacting an investor's cash flow and overall profitability.

Intro

6min

The Financial Burden of Evictions

6min

The High Costs of Eviction Revealed

5min

The Hidden Costs of Eviction

4min

Financial Fallout of Evictions

7min

Tenant Screening Strategies

11min

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

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