Are you aware of the hidden costs of eviction? As a landlord or property manager, it’s essential to consider the financial impact eviction can have on your rental business. What if there was a way to reduce the chances of eviction and avoid these costs altogether? In this blog article, let’s break down the true cost of eviction and explore a proactive way to prevent it.
Eviction entails more than just the stress of evicting a resident from your property. It comes with a hefty price tag that you can avoid. Costs might differ but on average, here are some of the key cost components*:
- Serving and Filing Fees: Depending on the location, serving and filing fees can range from $30 to $150
- Legal Fees: Engaging legal representation during the eviction process can cost landlords no less than $500 on average
- Court Costs: Filing a claim at court costs about $50 and could increase substantially if the tenant opposes. This could easily add up and you might end up paying hundreds of dollars in court fees.
- Sheriff Fees: If a tenant is not cooperative, you might need the Sheriff to serve the notice and escort them from the property. This costs somewhere between $50-$400.
- Missed Rent Payments: Eviction often results from non-payment of rent. With an average of $1,322 rent per month (Source: Statista), the renter would at least have $3,966 missed payments.
- Repair Costs: Changing your locks could cost you around $150. But in some cases, tenants facing eviction may cause property damage, necessitating repairs that can amount to $1,000.
- Marketing Vacant Units: When a tenant is evicted, landlords must bear the costs of advertising and marketing vacant units, which typically range from $100 to $200.
Roughly, the average total cost of evicting a resident can amount to at least $5,800! This makes one eviction too many especially for small property owners and managers.
Prevent Evictions Before It Happens
Reducing the likelihood of eviction can save landlords substantial costs. To do that, landlords and property managers can take a proactive step through Rent Payment Reporting. This program can encourage timely payments by offering an incentive and a consequence for not consistently paying or missing rent. By reporting rent payments to credit bureaus like Equifax, TransUnion, and Experian, renters’ credit reports and scores are linked to their payment habits, increasing their accountability and reducing the chances of eviction due to non-payment.
Rent Payment Reporting is Not an Additional Cost Item – It could even be Revenue Generating
Reporting rent payments is not an additional expense but rather an investment that can help landlords avoid the costs associated with eviction. By utilizing a rent payment reporting program, landlords can:
- Reduce Late Payments: Rent reporting incentivizes tenants to pay on time, reducing the chances of late or missed rent payments.
- Generate Revenue: Implementing Sperlonga’s Rent Payment Reporting can not only cover the cost of the service itself but also provide additional revenue of up to $27,750** in the first two years.
- Improve Retention & Encourage Longer Leases: You’re lucky if renters are paying on time, but you are not immune to poaching with the market becoming more competitive than ever. Offering this credit-building amenity to renters would increase the value for “rent money”, which increases lease renewal. You may even offer this as a reward for even longer leases! This is another way of reducing turnover-related costs.
Eviction comes with a significant financial burden and waste of time for property managers, making it crucial to explore proactive measures. The investment in rent reporting pays off by reducing late payments, generating revenue, and ultimately avoiding the significant expenses associated with formal evictions.
*These figures represent average costs and may vary depending on various factors such as location and specific circumstances.
**Results could vary and this amount is not guaranteed.