It’s widely recognized that evictions can be a significant financial burden for both landlords and tenants, and they can also take an emotional toll. However, a recent conversation between two investors raised an interesting debate about which party suffers more in the eviction process. On the one hand, landlords face the expense of going through the legal proceedings, while tenants lose the place they once called home.
To explore this further, I conducted some research to better understand the real cost of evictions.
Total Cost of Evictions for Landlords
Legal fees: Hiring an eviction attorney to manage the legalities can cost at least $500 for an uncontested case.
Court fees: Filing an eviction typically costs around $50, but this figure increases if the case is contested and drawn out.
Sheriff's fees: Should you need law enforcement assistance to remove a tenant, costs can vary from $50 to $400.
Lost rent: Evictions take time, during which rent isn't collected. With the U.S. median rent in 2024 at $2,100, losing three months of rent amounts to around $6,300.
Repairs: Post-eviction, landlords may face cleaning or repair costs, which could be estimated at $1,500.
Altogether, a landlord can expect the total costs of eviction to range from $4,000 to $8,000, though effective property management can help minimize these expenses.
Total Cost of Evictions for Tenants
Tenants typically face eviction due to unpaid rent or lease violations, which often means they forfeit their security deposit, estimated between $1,000 and $2,100 based on current median rent prices. Moving expenses also add to their financial burden, with costs ranging from $400 to $3,000.
Beyond the financial strain, there’s an emotional toll as well. A 2022 study published in Preventive Medicine Reports showed that evictions negatively affect mental health, contributing to increased levels of anxiety and depression.
In total, tenants may face between $1,400 and $5,100 in direct costs, not to mention the significant emotional distress.
Economic Impact of Evictions
Evictions don't just affect individuals—they also have a broader economic impact. According to the U.S. Department of Housing and Urban Development (HUD), rising eviction rates are linked to increased homelessness, and this in turn can reduce productivity in the workplace as displaced individuals deal with the upheaval in their lives.
Combining the average costs of eviction for landlords and tenants, we find a range of $5,400 to $13,100 per eviction. With an estimated 2.7 million households facing eviction annually, this translates to a minimum economic impact of $14.58 billion per year.
Conclusion: Everyone Loses
Ultimately, evictions are a lose-lose situation for all involved. Although sometimes unavoidable, evictions can be reduced by taking proactive measures.
How to Prevent Evictions as a Landlord
Whether you manage properties yourself or hire a property manager, the following strategies can help minimize the risk of eviction:
Screen tenants thoroughly: Proper screening, including background checks, credit scores, and income verification, can significantly reduce future problems.
Ensure tenants understand the lease: Walk tenants through the lease agreement to ensure they are aware of all the terms and obligations.
Use automated rent systems: Automating rent payments can reduce late payments and ensure consistency.
Address maintenance issues promptly: Quickly resolving maintenance problems builds goodwill with tenants and may encourage them to renew their lease.
Stay informed on tenant laws: Keeping up with changes in landlord-tenant laws will help you remain compliant.
Hire a reliable property manager: If you aren’t self-managing, ensure your property manager is competent in tenant screening, lease education, rent collection, and legal compliance.
In previous email: " What are the four stages in the property cycle?"
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