People ask us this all the time, “My tenant has not paid rent, now what do I do? How much does it cost to file an eviction on my tenant? My short answer is, the cost depends on the County in which the rental property is located. The long answer is, “the cost is more than just the actual cost to file the eviction.”
Let me share with you what we found over the last 30 years of being in property management.
Landlords Give the Tenant Too Many Second Chances
You might be asking yourself, how does this factor into the “cost of an eviction?” Landlords tend to be more “kind-hearted” when it comes to tenants and paying rent. We often hear landlords say:
- “I just felt bad for them; four kids, a dog, and the father lost his job.”
- “We couldn’t bring ourselves to evict them. Where would they live?”
- “Now they are two months behind on their rent and my mortgage is due again.”
- “I just need them out”.
Let me share with you a scenario we had last month:
A landlord, Mark, had rented his home in Corona, CA to a tenant for $2,000 a month. Mark is a bank manager and earns about $61k a year, or about $127 a day. He called our office last month and was just in the process of starting the eviction process with his tenant. And yes, he let the tenant not pay rent for two months.
If he had hired a professional management company from the get-go, he would have discovered that professional management companies tend to not be so “kind-hearted.” Rent is normally due on the 1st of the month, there’s a three to five day grace period, then the three-day notice is posted.
If the tenant still has not paid, evictions will be filled.
Time is money.
Management companies are not heartless by any means, but at the end of the day, once a tenant gets a month behind on the rent, it is awfully hard to come back from that.
Cost of Filing the Eviction in Riverside County, California
The cost to file an eviction depends on the County in which the property is located. Here in Riverside County California, the cost to file an eviction is over $900. Ouch, that’s a hit…. And this is for the Basic Eviction only. A Basic Eviction includes filing the paperwork with the court…and that’s it. It doesn’t include the cost of preparing the three-day notice, which is an additional expense, ranging from $80-$100. This is a critical part of the process; if the wrong notice is posted, or if the form is filled out incorrectly, it will cost you another month’s rent.
If the tenant files bankruptcy, you’re looking at another expense starting at $800 in additional court costs (this opens a whole other can of worms) and another 30 to 45-day delay while the bankruptcy is processed…so another month’s rent. Now you are looking at $1800 minimum in court costs alone. Not to mention all the rent you are missing out on.
Evictions Handled By Professionals
We have found that when an eviction is handled by a professional management company, the time and cost involved is about 50% less. Professional management companies know how to post a proper three-day notice, which saves you about $100. They will post the three-day notice timely, usually by the 6th of the month, once the grace period has expired.
Professional management companies typically file an eviction the same month in which the rent was not paid. From start to finish, barring the tenant doesn’t file an answer or a bankruptcy, an eviction filed by a professional management company can be resolved within 45 days of the rent not being paid.
The Waiting Game of the Tenant Eviction Process
The waiting starts from the day your tenant doesn’t pay rent. You wait to see if they will make good on their promise to pay. Now, you have to give them a three-day notice to “Pay or Quit”. Unless you are versed at serving these notices, you must consult an attorney, have them prepare one for you and then have it served, again more waiting. Now you must wait for the tenant to pay or the three-day notice to expire. This process takes another eight days per the law unless the tenant was personally served. in most cases, a notice is placed on their door and a copy is mailed to them. And AGAIN, WE WAIT……
Now the day has come that we can actually file the paperwork with the court. Now a process server has to serve all tenants living in the home the paperwork. This could take another day or two.
And AGAIN, WE WAIT….
Once served, the tenant has five days to respond. Fingers crossed they don’t respond. After five days, you get a quick court date, a lockout date, and they move out the day of the lockout. This process normally takes about seven to ten days. However, if they respond, you must WAIT for a court date, which normally takes another week to get. If the judge rules in favor of you, the landlord, you must WAIT:
- To receive the judgment. This normally takes three to five business days.
- You have to pick up the judgment from the court (if you didn’t use an attorney).
- To receive a LOCKOUT date. This can take another three to five business days.
- For lockout day to arrive, and then you must WAIT for the Sheriff to complete the Lock-Out.
All this waiting around is costing you time and money. Not to mention lost wages for you, as you are required to be at the lockout, you must pick up the judgment from the court, etc.
Take a Deeper Look at the Overall Costs
Getting back to our example of landlord Mark, let’s take a deeper look at the costs he has incurred this far. He hired an attorney to prepare the three-day notice and had the tenant served. This cost him an additional $180 ($100 for the three-day notice and $80 for the serving of the tenants). However, he filed the paperwork for the eviction and paid the courts directly.
He is looking at least forty-five to sixty days from beginning to end of the eviction process. With a rent of $2,000 a month, Mark had $8,000 in loss of rents (the two months “grace” he gave to his tenants plus the two additional months for the eviction). Now let’s figure Mark’s lost wages, remember he makes about $127 an hour.
* Mark had to take a day off from work to go to the court and file the paperwork for the eviction, that is $1,016 in lost wages for one day!
* Another day off to go to court to present his case to the judge (he didn’t use the attorney for this), there goes another $1,016 in lost wages.
* Another day off from work to pick up the judgment from the court and then find someone to serve the tenants, another $1,016 gone.
*Now lockout day has arrived and Mark had to meet the Sheriff at his rental property to get the tenants out and have the property re-keyed by a locksmith. There goes another day and another $1,016.
* Meeting the contractors, getting the bids, overseeing the remodel of the rental property. Just in lost wages, Mark is at $4,000 for his time.
From start to finish this eviction just cost Mark $1000 (for basic eviction), plus $4,000 in lost wages, plus $8,000 (minimum) in lost rents. That’s a minimum total of $13,000.
Most professional management companies will handle all the paperwork for you, they will coordinate the service of the tenants, they will get the judgment and meet the Sheriff at the property for the Lock-Out. This service will save you thousands in terms of lost wages and downtime of getting the tenants off the property.
Had Mark hired a professional property management company, he would have saved himself a minimum of $8,000!
The Aftermath of an Eviction
Now the lockout is completed and you walk inside your rental property. You are blown away; how can people live like this? What happened to my property? Where do I start with all the repairs?
- Holes in the walls - check
- Pet damage to the carpet - check
- Dead lawn in the front and back - check, check
- Red walls—I thought those were white — check
- Overwhelming filth - CHECK
You will need to get bids from Contractors, hire a painter, hire a cleaner, and more. You’ll start thinking, “I have already taken so much time off work, and now I have to find time to meet with contractors and get bids, who has time for all this?”
The answer: A professional property management company does.
Let the Professionals Handle It
Most management companies have contractors that they work with regularly. They can get a team in the property quickly, get the estimates to repair your home, and coordinate the work. Let the management company do the heavy lifting. Let the management company get the bids for you, let them oversee the repairs, while you go to work and spend time with your family in the evenings.
Using a professional management company for this process will save you tens of thousands of dollars. When contractors work for management companies, they tend to offer better pricing, and they are licensed bonded and insured. Their workmanship is normally better as well, as they know their work will be double checked before getting paid.
Contractors that work with management companies will normally complete the job in about a week instead of several weeks, saving you time and money. While the work is being completed by management company contractors, the property can be shown, thus getting the property rented quicker. This starts putting money in your pocket quicker, and who doesn’t LOVE that?
Overwhelming Costs of Evicting a Tenant
The cost associated with an eviction goes much deeper than just writing the check to the eviction attorney.
- Loss of rent for 2 to 6 months= $4,000 to $12,000 (average rent rate of $2,000). In the case of Mark, he is out $8,000 in lost rents.
- Loss wages for Mark = $4,000, even if you are retired, your time is not FREE.
- Time spent getting bids from contractors= another month of vacancy at $2000.
- Time and cost spent finding a new tenant= $500.
- Attorney fees: $1,000+.
- Repair costs for his rental property: $10,000 (included new flooring, complete paint interior of the property, and much, much more).
Total cost: $25,000 minimum
Managing the property yourself
When managing a property yourself, the costs are much greater than when you use a professional management company. Management companies handle all the paperwork filing, they will work with an attorney, they will go to court on your behalf, they will meet the Sheriff at the property, they will coordinate all the work to be done at the property, they will re-rent the property, getting money back into your empty pockets. Now let’s look at the cost breakdown of using a professional property management company.
- Loss of rent for 2 months=$4,000..saving Mark $4,000
- Loss of wages= None…saving Mark $4,000
- Time spent getting bids from contractors= None…saving Mark $2,000
- Time and cost spent finding a new tenant= No time lost, minimal money for advertising
- Attorney fees: average $950 (this includes the 3-day notice, sheriff lockout, etc.)
- Maintenance Cost: $5,000 (management companies usually get better pricing due to the volume of work)…saving Mark $5,000
Total cost: ~$10,000….saving Mark $15,000
That is a $15,000 difference between allowing a professional property management company to manage your property and handle the evictions compared to doing it yourself. With savings like that, you can take a nice vacation, put money into your retirement account, and your kids’ college funds.
The Good News
Even though you had an eviction, and it was like walking on HOT COALS, there is light at the end of the tunnel.
An eviction doesn’t have to break the bank or your back in the process. Yes, you might feel the sting of not receiving rent for two months, having to pay for repairs to the property and write the check to the eviction attorney. But it will be far less of a sting than if you did it on your own. Professional management companies are just that–professionals. This is their bread and butter, this is the road they walk every day. They are schooled in handling evictions no matter the reason for the eviction. Don’t lose any more time and money by “playing” landlord, call a professional management company today, and get your life back.
And yes, Mark has hired us to manage his rental property and a new tenant.