10 Invaluable Lessons I Learned From My Very First Tenant Eviction

~ I have added CA Tenant/Landlord Handbook for your convenience also, but otherwise this is pretty accurate break down. Also one thing I have learned is that you need to jump on the eviction process as soon as you can ~

10 Invaluable Lessons I Learned From My Very First Tenant Eviction

by | BiggerPockets.com

If you are serious about buy and hold real estate investing, you will experience an eviction sometime within your career. It’s not a matter of if but when you will need to legally remove a tenant from your property. The process is not pretty. Below is the story of my first official eviction.
I don’t think I’ll ever forget how I felt that spring morning. It was a feeling that could only be compared to the excitement, anxiety and nervousness that typically comes with the  first day of school. Four and a half years after purchasing my first rental property, it was actually happening. This was a coming of age moment in my investing career: I was finally about to experience my first official eviction.
To be blunt, the eviction process is awful. Beyond the obvious loss of revenue and the additional legal costs, evictions take a major toll on you and your business. I had an idea of what my first eviction might be like — but like many things in life, the only way to truly understand something is to experience it for yourself.
As the wounds of my first eviction begin to heal, I’ve reflected on the ordeal to identify 10 key lessons that will help my business prepare for the future.
Disclaimer: I am writing about a specific instance that happened in the county of Erie in New York State. Your situation may or may not be similar. I highly recommend you learn as much as you can about the eviction process in your specific market(s). Try to get a first hand account from an investor who has had a recent eviction. Laws and procedures change. It’s best to get a fresh perspective. 

Related: 6 Reasons All Landlords HATE Having to Evict a Tenant

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10 Lessons Learned From My First Official Eviction

Lesson #1: Evictions are expensive.

FACT: Evictions can cost a ton of money. I went into this process knowing I would incur some legal fees. To be honest, the legal fees weren’t too bad! It was the subsequent, hidden costs that caught me off guard.

Here is a quick breakdown of our costs:

This doesn’t account for the past due rent that remains unpaid. The rent on this particular unit was $1,450/mo. The whole process left us without rent for 4 months, a total of $5,800. This brings the grand total to just under $9,000! Now we have security deposits and there are ways to go after this money. But in the short term, it has a huge impact on our business!

An eviction notice taped to a door.

Lesson #2: It’s a long, drawn out process.

We notified our lawyer of the intent to evict on March 4, 2016. We finally evicted the tenant on May 12, 2016. That’s over two full months to actually remove the tenant from the premises. During this entire time, we had no contact with the tenant, and we were advised not to bring new perspective tenants through the property. We simply sat and waited while this tenant continued to live for free!

Here is a detailed breakdown of the timeline:

Lesson #3: Don’t assume everyone is thinking logically.

There were several moments during the eviction process where I thought the tenant would act in a logical manner. For example, after being notified that she had 72 hours to vacant the property, one would assume the tenant would make arrangements to move her belongings. You would also think she would start thinking about where she will go once the eviction happened. Finally, you would assume the tenant would find a safe place for her children so that they wouldn’t have to witness the eviction.

All of these assumptions were wrong. It was as if the tenant did not believe that this was actually going to happen. Instead of having full and complete control over how she was to move out of her house, the moving and storage was left in the hands of a third-party.

Lesson #4: Evictions favor the tenant.

As mentioned above, there are a lot of costs that were not anticipated. It might seem unfair that you have to pay to move and store your tenants’ belongings. It sure is unfair! But honestly, what else can be done? The items need to go, and it’s impossible to force the tenant to arrange and pay for a moving company on his/her own. It really is the only option!

Unfortunately, the landlord is left feeling that this entire process is completely unfair and favors the tenant.

Lesson #5: Set aside a full day (or more!).

Keep your schedule open on eviction day! You need to be flexible to meet the sheriff’s deputy, coordinate with your movers, travel to the storage facility, etc. I originally thought I could show up at 10:00 a.m., get the movers going, and get on with my day. Instead, I was stuck arranging the storage facility and supervising the movers. There’s no doubt about it: This is an all-day event.

Lesson #6: The house isn’t necessarily destroyed.

This was a pleasant surprise for us. To our delight, the house was in good shape! We had nightmares of what we might find on the other side — but it really wasn’t bad. Perhaps because the tenant convinced herself that the eviction would never really happen, there was no sign of anger toward management.

Obviously, I realize we were lucky. There are countless horror stories of tenants breaking water lines, punching holes in the walls, and smashing windows. Given my deep anger toward the tenant for how much time and money she had cost my business, I couldn’t help but appreciate that she didn’t make it worse by damaging the property.

items_bring_to_tenant_eviction

Lesson #7: The Sheriff’s Deputy has a really tough job.

I don’t envy the job of a Sheriff’s Deputy serving an eviction warrant. They are required to forcibly remove a family from their home. This is never a fun job. The deputies we worked with were extremely professional and fair to both parties. I can’t imagine having to deal with these situations on a daily basis.

Related: How I Was Almost Fooled by Evicted Tenants (& What I Learned)

Lesson #8: It’s hard to get your money back.

We have recently started the process of trying to collect our losses from this experience. We will have a judgement on the tenant, but collecting is the hard part. In our case, the tenant has a decent job. This gives us hope that we can garnish wages.

That being said, I am treating the expenses and unrealized revenue as a complete loss. If we are able to get some or all of it back, great. But I’m not counting on it!

Lesson #9: “Cash for keys” might be a logical alternative.

We have used the “cash for keys” strategy in the past. This strategy utilizes cash (in the form of a returned security deposit) to incentivize the tenant to leave the property. I’m confident that this strategy would not have been successful for this particular situation. The tenant was just not logical enough to understand the concept of a win-win situation. However, given the extensive timeline and outrages costs of an eviction, it’s a strategy worth considering.

Lesson #10: An eviction has the power to alter perspective.

This process made me angry. I was so ready to have this tenant out, and eviction day could not have come soon enough. After all, this tenant deceived me and insulted my business. All this being true, I was surprised to find myself feeling sympathy for the tenant on eviction day.

At the end of the day, we were kicking a family out of their home. There was obviously something unexplainable going on with this woman that she couldn’t prepare her family to live some place they could afford. The sight of the deputies removing the tenant with her children watching nearby was tough to watch.

We are in the people business. Our service is to provide a clean, safe, and enjoyable living experience for our tenants. It’s a shame when this service gets taken advantage of and we must act to protect our business and our livelihood. This eviction altered my perspective. I now have a stronger understanding of the importance of what we do as landlords.

It WILL Happen to You

As mentioned above, you are likely to experience an eviction during your career as a buy and hold investor. You can never be fully prepared. However, learning from those who have gone through the process will certainly help to tune your expectations.

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