How much does it cost to evict somebody? When you have a tenant in your unit that isn't paying rent,
how much does it actually cost you as a landlord to get them out of your unit
and replace them with a new tenant? Let's find out.
Over the years as a property owner, I've had to evict many different people and what I've realized
throughout that process, there's a lot of different ways it can cost you money, but if you know them,
you can mitigate some of your risk and not pay all that money. So, in this video,
I want to give you the 5 different ways an eviction can cost you money but stick
around to the end because I have a free gift for you hanging out with us today.
The very first way it's going to cost you is through legal fees because I would encourage
nobody to do an eviction without hiring an attorney. And that attorney is gonna charge you
anywhere from 2, 600, $800. Some eviction attorneys even charge
as high as a thousand dollars, again depending on the state in which you live. If you live in New
York City, that process takes a lot more time and a lot more work so an eviction attorney is going
to charge you a little bit more. If you live in the Midwest where that process goes a little smoother,
the attorney is going to charge you a lot less and it's not going to cost you near as much money.
Legal fees vary from attorney to attorney. Some of them charge you a set fee to do an eviction, others
charge you a set fee plus hours on the job because sometimes more paperwork needs to be delivered,
more proof needs to be given and every process is a little bit different. The best way to plan
for an eviction cost is to talk to your property manager or to talk to other owners in your area
to see what it costs them to do an eviction and you'll know before you buy a property in a city
what it's probably going to cost you as far as legal costs you to evict somebody as well.
But, it's worth every penny because these attorneys save you time and they're the ones that can really
get this done. And because we know if we do evict somebody, often we can garnish their wages as they
move out, an attorney will make sure we're set up to do that. So, an attorney will make their money
back and then some by making sure the process is handled quickly and in a right way. The 2nd
way an eviction is going to cost you money is with court costs. You're going to have to pay
a filing fee of usually 50 to $100, depending on the state again, but you're going to pay a filing
fee to request that date to go before the judge. Sometimes as you go through these costs, it can get
frustrating with how much it actually costs just to simply get your unit back. It almost feels wrong
at some point, but here's what I want you to see. Remove that from your mindset. We're in the mindset
of helping people. I've had way more great tenants over the years than I've had tenants I need to
evict. This is one of those unpleasant parts of the job but it doesn't happen all the time. So, again,
while yes, it feels like it's wrong and it is, it's not what we deal with every day and it's certainly
not what we focus on as property owners. But for court costs, the national average is around $50
to file a claim in court and go before the judge to request your unit back. The 3rd way an
eviction could cost you money is through financial damages. Obviously, the legal cost, the court costs
and recouping that cost is really really difficult. In fact, there's only a 17% success rate in seeking
to recoup lost legal and court fees in order to actually evict somebody from your property.
So, while they're not paying you rent, it's on your dime in which you remove them. Again, I know this
feels wrong, but it's the process that we have to go through every now and then. But as a side note,
make sure you're leasing right. The other financial damage is turning over the unit. Once they do get
out, you often have to clean it and a lot of times, if they're getting evicted, they don't really treat
the place very well and so you have to do extra cleaning, sometimes removing all the flooring and
doing new floors. So again, it's a lot of money that goes into making the unit what we call "rent ready"
or ready to move to another tenant. Make sure you stick around to the end, I'm going to give you
the number 1 way to make sure you can cut this cost down as you evict somebody, but also make sure
you subscribe to the channel and hit that bell notification so you get notified every time we put
out a video which is every single weekday. Let's get back to the content. The 4th way it costs you
money is I just lightly mentioned is the property damage. A lot of times you have extensive property
damage that you need to fix in order to rent it to a new tenant. Now, routine property maintenance and
turning over a unit of just cleaning the unit, making sure the carpets are all clean, making
sure the walls are all clean, that's normal wear and tear of a property. Property damages
are actual damages to your property that you need to fix because of that tenant. Historically,
I've seen broken doors, cabinet doors that were ripped off, pipes that were cut and taken out,
a lot of property damage happens in an eviction process because tenants are really frustrated that
they're getting taken out of their unit. You and I know it's kind of crazy because they signed up for
this and they just simply didn't keep up their end of the bargain but the truth of the matter is
some people go a little sideways. And the reason I say some people, I do not focus on that as a
property owner, that's not where I put my attention. I put my attention into my great units in which I
love to serve and even those that I have to evict, I still speak to them as though I don't want to
do this. I hate having to do this because believe me, it cost me way more money than it costs them.
So, I don't want to do this either. So, the truth of the matter is sometimes sadly, you have to deal with
property damage. Sometimes people will damage your property, you'll have to invest money into it to
get that next tenant in. But again, don't let that be the reason you don't get into rental property.
Don't let that be the reason you don't buy property to rent to tenants because the truth is
most of them are amazing, that's the mindset that's kept our business continuing to grow and add value
to people. But the 5th one is sometimes the biggest hit which is the lost rent. The time
that they're not paying, we often lose that rent and we never get that back especially if we don't
structure our leases correctly. Now, this amount can shift and change based on what state you own
property in. For example, if you own property in a very tenant-friendly state and landlord-tough state
like California or like New York, tenants can often stay in there anywhere from 6 months to a year
and some 18 months without ever paying rent. That's why we are really careful to invest in those areas
and really don't invest in those areas because it's too hard to manage through some of these
processes if something happens and a tenant goes in there that really can't pay rent.
Think about the difference in rent. You own a unit in the Midwest at $750 versus a unit on
the coast at 4 or $5,000 a month. Do the math over unpaid rent over time. This is why
I really want you to invest in landlord-friendly states. But the thing that can cut all of this down,
there's one thing you can do that can make you pay half as much as everybody else through an eviction
and that is have very hard strict leasing processes. Often in real estate, we say you
make money when you buy, not when you sell. We say that because the cheaper you buy the property, the
more likely you are to make money on the property. So, often we'll say you make money where you buy.
I say in rental property, you make money when you rent. The idea is when you pick a great tenant,
you don't have to work to get them to pay because that's just what they do. It never dawns on
them to not pay rent. So, having a hard strict leasing process meaning having background checks,
great application processes, a great screening process and a great interview process, it's going
to give you the ability to sift through those tenants that are probably going to be problems
over the long haul and partner with tenants that are going to be great tenants for you. Also, make
sure you watch our video on how property managers pick excellent tenants. I also want to give you
a free gift today. I want to give you our free multi-family master class. If you click the link in
the description, you're going to be taken straight to our multi-family master class where I go over
the 5 things you can do to get a piece of multi-family in under 71 days. I'll see you there.