With the ups and downs of the economy, evictions have been on the rise. On average, 2.7 million people faced eviction in 2015, according to Forbes.com, due to rents rising an average of 66 percent and incomes only increasing by 35 percent. As a result, landlords are facing increased challenges to screen, find and retain reliable tenants.
When a landlord looks at his monthly budget numbers, he or she usually goes to the bottom line to look at the costs involved with running his units. There are a few hidden costs that must be evaluated and in return can result in a better bottom line:
Here is the average cost breakdown based from multiple sources:
- 2-4 months Lost rent (based off of CA average rents) $4230
- Lost leasing commission of approx. $940
- The filing in circuit court costs anywhere from $90 – $400
- The cost for the Sheriff’s office to serve notice ranges from $50 – $400
- Miscellaneous filing service fees can run $50 – $700
- Cleaning fees of unit $300
- Marketing feed to relist unit approx. $100/unit
- Legal fees can run up to $750
As you can see, the hard costs can easily add up. In addition to these hard costs, there are additional “soft” costs that aren’t as easily measured. They include time taken away from leasing other apartments, from sales staff and from efforts to retain tenants.
Being a good landlord is tough even during the best of times. Fighting legal battles and evictions makes business even tougher. Having the most sophisticated screening tools and retention tactics can aid landlords in their renting processes.