August 28, 2014

How Often Are Renters Evicted?

My Dad has had rental properties for many years now and in total he manages about 20 units including the properties we own jointly.   I can only recall 2-3 instances when my Dad actually had to complete a full eviction with the courts and go to the end to have the Sheriff actually remove someone.    Almost always tenants will either pay their rent or leave if first presented with a 3 day pay or quit notice.   A minority of people will push it further than that and only a small fraction will actually let it get into the courts.  People really don't want to be evicted for good reason.   Personally I've not had to evict anyone and my wife and I have been managing our own properties for several years now.  

 From watching my Dad and my own experiences it really seems that actual evictions are quite rare.   If you look at the number of years in question and the total number of tenants it would probably work out to around 0.5% to 1% of tenants are evicted.   Thats a pretty rough ballpark number though.


The American Housing Survey for 2009 captures reasons people moved and in that data they say that 191,000 people moved in the year because they were evicted.   Among the total of 35.3M renters that would equate to about 0.5% of renters being evicted in a given year.

I found an article on SF Gate that said San Francisco logged "1,716 evictions between March 2012 and February 2013".   In any case thats in a city of 825k people and 38% of the population rents.    That comes out to about a 0.5% eviction rate.

I've got 3 different ways of looking at the eviction rate and come out to about 0.5% each way.
It seems that this is probably a fairly accurate estimate then.

My conclusion :  About 0.5% of renters are evicted annually.

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2 comments:

  1. Great data as I am looking to buy a rental investment property in the future and that was a concern of mine. How extensive is your interview process for new renters, and what area are the properties located?

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  2. My dad and I have different screening processes. We both do some sort of pre-intereview and then take applications and decide based on financials primarly. However I think I do more pre interview than him and we do credit/background checks and he doesn't do that. (he should). The properties I mange directly are more expensive single family homes in a more expensive city and the ones he manages are cheaper multi family in a cheaper city with a worse economy. So its a different demographic with him mostly getting low income and our units going to more middle income.

    He does have more frequent nonpayment from tenants than we do but again I think thats a reflection of the demographic for those cheaper properties.

    Note that the % that actually ends up in full legal eviction is a lot lower than the % that fails to pay rent or that you have to ask to leave at some point. Sometimes my dad has had as much as 1/3 of his tenants late on rent and he's usually actively trying to get 1-5% of them to leave. But usually a 3 day notice is enough to get a rent payment or push the tenant out the door.

    Jim

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