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The Cost of an Eviction

Writer's picture: Jesse BrewerJesse Brewer


We've all heard the stories from the mainstream media and from politicians running on housing control platforms about how the faceless, corporate capitalist landlords evict people with zero remorse. Housing groups everywhere are calling for reform and are demanding that property owners be more lenient with tenants who are unable to pay their rent, an argument partially driven by the COVID eviction bans.



To understand the true cost of an eviction, we first need to touch on the process of how an eviction works. For the sake of this article, I will focus on my home states where I do business, which are Kentucky and Ohio, both of which are considered by industry standards to be “landlord friendly.”  I will also use the rent of $1,400 since that is the median rent in Kentucky, which is $700 less than the national median.


 With most leases, the rent is due between the 1st and 5th of the month.  For example, my leases state that rent must be received by the end of business on the 5th of the month; however, we do allow it to come after that if it is postmarked by the 5th of the month, which is a common practice among landlords.


Once the rental payment is late and a notice to vacate has been posted, it is usually around the 10th of the month.  Often, a tenant will then contact the landlord and give their story or explanation as to why rent hasn’t been paid yet. Keep in mind that the landlord is still responsible for things like the property taxes, the mortgage payment that is due monthly, the insurance payment as well as any maintenance problems that could have come up.  



A landlord may give the resident a few extra days to pay, but absent a payment, the eviction is usually filed around the 20th of the month.


In Kentucky, the local jurisdictions set the court dates to hear evictions. Dates and times vary, but typically, an eviction case is heard within seven to 12 days once a date is established. So, the case is usually heard around the 27th to 30th of the month.


If the eviction is granted, the judge generally follows the custom of giving the tenant seven days from the judgment to vacate the premises; that is also the state requirement. However, some judges have been known to give an extra week depending on the circumstances of the case. 


Assuming a judge follows the custom, we are now around the 5th of the following month. For the landlord, that means a second month of no income because a tenant who is under active eviction is not going to pay the rent. Other costs, court fees, and legal fees can total another 400 dollars. 


The tenant will have been given until midnight of the 7th day to vacate. But as we all know, the courts and the administrative portions of law enforcement do not work at midnight, so the next business day, a landlord must file a “writ of possession.”  This filing costs an additional $40,


Judges often hear cases on Thursday. However, many judges and their staff work half days and often do not work on Fridays, so the case can get pushed back into the following week.



In our timeline, we are now around the 15th of the second month. So far in this process, we have had two full rental payments not come in, the tenant is still in possession of our property, and we must still maintain the property and pay the taxes, mortgage, and insurance on the property- all while we are not generating any income.


Once the writ is signed by the judge or magistrate, it is then sent to the sheriff’s department and must be scheduled for the set-out. The set out is where the sheriff accompanies you and your workers, and you physically go to the property. The sheriff removes the tenant, but the landlord must move all their belongings out to the street and “set them out.”   


As with most administrative functions in government, you can guarantee that this isn’t “same-day service.” The setout can take from two days up to a week, not to mention the additional costs and issues for the landlord. Most cities will give you only 24 hours to leave items at the curb before fines are levied. 


These setouts can vary drastically in cost, but if you have gotten to this point in the process, you can anticipate, at a minimum, that you are spending an additional $500 to remove the items from the rental unit and then dispose of whatever the former tenant has left behind.  


Once the setout is completed, we are now at the 20th of the second month.  In more than 20 years in this business, I can tell you that I have never seen a unit that was rent-ready, clean, and good to go for a new tenant to move into after an eviction.



There is almost always trash left behind, painting that needs to be done, touch-ups that need to be made and repair any intentional damage to the property, which does happen. 


Even absent major damage, the cost is now at about $1,000. It takes a week to 10 days to get the apartment ready to rent, so our timeline of having the unit ready to rent is now on about the 5th, the third month. 


So, to cap our cost so far here, on a $1,400 rental, the landlord is out three months of rent for a total of $4,200; legal fees of $440; set out costs of $500; and another $1,000 to prepare the unit for a new tenant. The total under this scenario is a whopping $6,140.


Now that we have the cost, a lot of people are thinking while that seems like a lot of money, all landlords are still rich. That's simply not true.


In this business, a landlord’s profit margin is thin.  Approximately 92 percent of every rental dollar goes to pay the landlord’s expenses, such as property taxes, insurance, mortgage, maintenance, and more.  So, with our illustration of the $1,400 rental, approximately $1,288 of that are expenses, and only $112 each month would be considered the owner’s “profit margin.”    


On an annualized basis, that equals $1,344 of profit, making the total cost of eviction as much as $6,140. To put it another way, four-and-a-half years of profit margin are lost - and this is assuming that there are no other major issues or evictions that occur.    



There are those out there who think all property owners that rent property are part of some large faceless corporation; that is not the case. In fact, according to the NAHREP (National Association of Hispanic Real Estate Professionals), a trade organization that advocates for sustainable Hispanic homeownership, around 80 percent of landlords own or manage less than 20 rental units, with a majority owning or managing only one to four units.  


To put that in a different perspective, data released by the U.S. Department of Housing and Urban Development, around 23 million rental units are owned by small landlords. 


Most owners of rental properties, including single-family homes, have full-time jobs and careers. So when a tenant does not pay their rent or leaves behind a lot of destruction to a property in need of repair, the landlord has to come up with the necessary funds. It is not usual for a landlord to borrow against their 401K retirement account, get a cash advance, borrow on credit cards, or even seek a bank loan.


My advice to landlords is to hire good property management to help mitigate these risks and costs.  Make sure you have a good screening system in place and be able to articulate your reasoning for your qualifications and standards.


Jesse Brewer

Jesse is a Boone County Commissioner as well as a real estate broker who owns and manages rental housing.  

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