No one wants to get evicted, and property owners don’t particularly want to evict renters, either. For both parties, the eviction process is a difficult and draining one that comes with a range of negative effects, from lost housing and emotional distress to financial losses and damaged rental units.
While evictions are unfortunately sometimes necessary, they’re a lose-lose situation for everyone involved. It’s no surprise, then, that property managers and owners want to keep them and their associated costs (both financial and otherwise) to a minimum.
The best way to stop evictions? To keep them from happening in the first place. In this post, we’ll discuss some of the statistics around evictions, their many financial costs, and strategies for avoiding them before they even begin.
The cost of evictions
In many landlords’ minds, the main cost of an eviction is the unpaid rent, or perhaps the opportunity cost of having lost out on a renter who may have paid on time and in full. However, the true cost of an eviction goes beyond that.
For one, there are the court costs. Many eviction filings are handled in civil housing court, and that means attorney fees and court costs, both of which can be substantial. Even serving a renter with an eviction notice can come with a price. If a property owner chooses to have a local law enforcement officer or process server deliver the notice (which makes sense, since it goes on the official record), that alone can cost between $30 and $150. Filing the eviction paperwork is yet another expense, with a fee of up to $150.
Court fees themselves often range from $300 to $800, depending on your location. And a lawyer can cost well into the thousands of dollars. Actually, attending court costs employees time and can potentially involve travel expenses. There’s also the possibility that the renter wins in eviction court, and the landlord then becomes responsible for their court fees. If the renter leaves damage or a large mess behind, repairs and storage/removal of items is another line item on the already-long list of eviction costs.
There are also more indirect costs associated with evictions. One is emotional strain, which is hard to measure but can certainly have an effect—especially if the process becomes particularly heated. Finally, an eviction may inspire a property owner or manager to set new, more stringent renter criteria. On its face, that seems like a smart idea. However, this decision may end up excluding some fantastic renters, like freelance or gig workers, responsible students, and fixed-income individuals (more on that here).
Evictions are definitely not the easy or cheap way out of issues with a renter. “We’ve seen owners take a blind, sweeping approach to immediately evict a renter when they fall behind on rent a lot of the time, and that’s really not a good approach,” says Elsa Liao. While there’s no 100% foolproof way to avoid evictions, there are steps property owners and managers can take that can make these costly and stressful situations far less likely.
Preventing evictions before they start
When it comes to evictions, prevention is the best medicine. And it can start right at the start of the renter-landlord relationship with clear communication and renter education.
Education and communication
Renter education is actually one of the best ways to avoid future evictions. “Quite a lot of renters aren’t aware that rent is due on the first day of the month instead of the last day of the month or the day they move into the apartment,” says Elsa Liao, VP of Risk Management at TheGuarantors. Because this fact might seem obvious to a landlord, they may not even think to verify that their renters are aware of this deadline. Their renters may be students, new graduates, or international arrivals with a language barrier to overcome; they may simply not be aware of what many property owners consider “the basics” of tenancy.
That’s why renter education is so critical. Landlords should assume that each renter is a “first-timer” and proceed accordingly, providing informational materials and clear communication around when rent is due, how to pay it, how to request maintenance or repairs, and best practices for responsible tenancy. TheGuarantors can help with this, providing these and other materials to renters in various languages.
Repayment options
If a renter does fall behind on rent, eviction should not be the first response. Rather, it should be a last resort. Keeping a line of communication open between landlord and rentor does not just promote transparency—it also serves as a way to stay in contact and come up with creative solutions if the situation changes. For example, a renter may lose a job or have their hours cut. By communicating that issue to their landlord and devising a strategy to address the problem, both parties can avoid the stress and cost of an eviction.
Potential solutions may include structuring a rent repayment plan or temporarily reducing the amount of rent owed. In more pressing circumstances, property owners may institute a “cash for keys” program, giving renters a one-time payment to vacate their rental rather than face eviction.
Partnering with a guarantor
Another option is to find a guarantor or someone who will “guarantee” that the rent will be paid should the renter fail to keep up with their rental obligations. This guarantor can be an individual (like a friend or family member) or a company like TheGuarantors.
Our Rent Coverage product, for example, allows TheGuarantors to serve as the renter’s cosigner, shielding the landlord from much of the risk of default/lack of payment. As a licensed insurance agent and broker, TheGuarantors works with several trusted insurance carriers to back our products, giving landlords and renters peace of mind when it comes to rent payment.
In addition, it allows property managers and owners to rent to renters they otherwise may have had to reject, such as nontraditional workers, students, international renters, and low-income individuals. Our technology allows landlords take a less rigid approach to evaluate potential renters. With our algorithm, we can consider factors beyond the traditional credit score, including income and employment, references, and more. Who knows? We might help you find your new favorite renter.
Stop evictions before they start
Evictions are an expensive and difficult process for both landlords and renters. Unfortunately, current economic trends like inflation, unemployment, and rising rents are making them more and more likely. However, there are still strategies property owners and managers can use to reduce the chances of having to evict their renters. These include renter education, clear communication between renter and landlord, rent reduction and repayment plans, and of course, partnering with TheGuarantors. If you want to rent more and worry less, learn more about working with the TheGuarantors team.