Top cities for evictions and Top cities for least evictions

[Matt R.]

Evictions suck no matter what. Sometimes I read on BP some new folks are told to look for locations that are easy to evict vs looking for locations that just have fewer evictions per captia.  

Here are the highest and lowest cities (metros) eviction rates per capita. 

Not unrelated the top cities for less evictions ( LA,SD,SF,SJ ) also have the highest total returns ( cash flow + equity ) since 2000. 

Thoughts?

Good luck!

[Llewelyn A.]

@Mitch Messer

I think Mitch has the right idea.

I'm a Brooklyn, NY investor, currently have 8 multi-family, 25 apts, 60 tenants.

Last time I had to do an eviction was more than 15 years ago.

I had to do 3 evictions, all of them were from inherited tenants that occupied the buildings when I purchased them.

Despite being in a Bigley tenant friendly City, Market Rate buildings and apts can perform their due diligence so that you can reduce the risk of having high risk tenants. You cannot totally eliminate Risk, but you should be able to reduce it to an acceptable level.

There are several factors for the astute Investor in the NYC Market that wants to reduce their risk of tenants that need to be evicted:

1) LARGE pool of renters. You have a large variety of tenants as a result. This is necessary because there is no point on using some tools for risk reduction if you can only rent to a certain number or type of tenant.

2) LOW vacancy rates (less than 4% normally). Combined with a Large pool of renters, you can weed out problematic tenants.

3) Availability of HIGH quality renters so you can use Credit Scores whereas if you are in areas that you expect to have only low credit scores, this is tool can become useless.

4) Eviction checks are a very useful tool. Tenants know that if you are a Market Rate Apt seeker, which the majority of tenants will be, an Eviction on your record will basically minimize the apts that are available to you. Combining this with the available number and quality of tenants, you almost have ZERO chances of finding an apt. The Strong Tenant Laws are so prohibitive to NYC Landlords, if you have an eviction record, you are at a Yuge disadvantage. Tenants know that and try to avoid being in a Tenant/Landlord case. There are a lot of tenants who are in rent regulated apts that don't share that concept because they don't have the experience of the Market Rate Apt Seekers. If they lose their rent regulated apt, the picking for those apts are incredibly slim. But that's usually when they realize the reality of the Market Rate Apt Seeker.

5) Bank statements are incredibly useful here. I always ask for 3 to 6 months of bank statements to prove you were paying your rent on time.

6) Landlord recommendation. Combined with your Bank Statements, you will hardly be able to pull the wool over my eyes by getting friends to give you a Landlord Recommendation. The Letter of Recommendation and the Bank Statements showing your rents are being paid must corroborate your story.

7) High Income - Generally, we ask for 45 times monthly rent. If I have an apt renting for $2k per month, then you need a combined income of $90k per year. My apts average $2,500 per month.  So generally, if you don't have at least $112,500 per year annual Income, sorry.... next applicant.

All of these combine to protect a Landlord in a very Tenant Friendly environment. It's because of the Tenant Friendly environment that tenants who need a break just won't have them, in my opinion. If it were easier to evict, I could give people breaks. But that's not the case and my due diligence is incredibly strict.

I want to point out that places with very tenant friendly laws seem to be very HIGH Appreciating markets. Places like SF and NYC are among them. I don't think this is a coincidence but I won't venture to tie them together in this post. It's just an observation that I have seen over the decades.

Hopefully the reader of this post will understand that just because a City is Tenant Friendly, does not mean the landlord is at the mercy of the tenant. FAR FROM THAT.