Property managers, who pays for evictions

[Tom Fidrych]

I'm shopping for a new property manager. If a tenant you have placed is to be evicted, do you take care or it as part of your management service or is the owner billed for each court appearance and all governmental fees?

[Bob Stevens]

Quote from @Tom Fidrych:

I'm shopping for a new property manager. If a tenant you have placed is to be evicted, do you take care or it as part of your management service or is the owner billed for each court appearance and all governmental fees?

 Of course the owner pays,

[Nathan Gesner]

Quote from @Tom Fidrych:

I'm shopping for a new property manager. If a tenant you have placed is to be evicted, do you take care or it as part of your management service or is the owner billed for each court appearance and all governmental fees?

Depends on the company. I have offered free evictions for almost a decade. Why? Because they are so rare for me. With 400 rentals under management, I have only evicted once in the past 8 years.

Most managers will charge the owner. Read your PM Agreement or talk to the PM to get clear on this.

[Patricia Steiner]

Geez...if evictions - fee free or otherwise - is the driver of your choice of PM, you've got bigger issues than the choice of PM.  I recommend rethinking this issue and presenting it to prospective PMs as "how do you ensure tenant quality to minimize interruption of cash flow, tenant turnover?"  "What is your accountability/buy-in when a tenant defaults - and when eviction is evident?"

Anytime you have cash flow interrupted, you lose.  Evictions are a loser's game.  Find a PM that will increase your tenant quality, manage to the lease to the 'nth' degree, and minimize disruptions/interruptions to your cash flow.  

You're running a business...find a PM who is committed to managing your empire.

Best.

[Tom Fidrych]

Quote from @Nathan Gesner:

Quote from @Tom Fidrych:

I'm shopping for a new property manager. If a tenant you have placed is to be evicted, do you take care or it as part of your management service or is the owner billed for each court appearance and all governmental fees?

Depends on the company. I have offered free evictions for almost a decade. Why? Because they are so rare for me. With 400 rentals under management, I have only evicted once in the past 8 years.

Most managers will charge the owner. Read your PM Agreement or talk to the PM to get clear on this.

Yeah, I felt like the companies eviction policy might be a testament to the confidence they have in their screening process. 

[Matthew Kwan]

The landlord/owner will be responsible for all the expenses and costs...Property managers are just your representative to initiate and take action. 

@Albert Bui @Carlos Valencia

[Bud Gaffney]

@Tom Fidrych client always pays. Meaning the property owner always pays. Don’t trust a PM who says they pay for evictions because once they come they will not.

[Steve Vaughan]

Quote from @Tom Fidrych:

I'm shopping for a new property manager. If a tenant you have placed is to be evicted, do you take care or it as part of your management service or is the owner billed for each court appearance and all governmental fees?

 Owners get to pay for a horrible tenant selection twice. No, 6 times. 

You pay when they place a tenant (usually 1 month's rent)  then you pay for the eviction.

All missed rent is on you, as is all damage, plus the lengthy turnover. 

Select a PM as carefully as you would a tenant.  

[Nathan Faselt]

We show up to court and time to file all the paper work for free or included in fee cost but we bill the clients for the filing cost if the resident doesn't pay them first.    I also like the thought from others on the screening confidence but we allow our owners to have a choice of what level of screening they would like.  Thanks you for this question this has lead me to think about how we may be able to offer value to the clients we serve posable 1 or 2 free if the have a few dozen units. 

[Drew Sygit]

@Tom Fidrych BE CAREFUL about "Eviction Guarantees"!

Don't be foolish and just blindly look for them without understanding why they are offered. This will HELP you avoid being screwed.

As @Nathan Gesner previously posted, some PMC's do have actual Eviction Guarantees. 

Usually they are offered on Class A and sometimes Class B properties & the corresponding tenants. 

WHY?

Because the risk of an actual eviction decreases as the credit score of a tenant increases.

So, the odds of a tenant with a 680+ credit score not paying and having to be evicted a small. EASY to offer a guarantee on this as a PMC will rarely have to pay out to cover!

Would recommend being VERY careful if a PMC is offering an Eviction Guarantee on Class C properties => where tenants will usually have credit scores under 620.

Bottom line: if you have a Class A property, an Eviction Guarantee offering isn't worth taking a chance on poor performance. So, don't worry about it when screening PMC's. For Class B properties it will have some value. For Class C properties it may be a bait & switch the PMC will find some way to get out of.

[Tom Fidrych]

Quote from @Drew Sygit:

@Tom Fidrych BE CAREFUL about "Eviction Guarantees"!

Don't be foolish and just blindly look for them without understanding why they are offered. This will HELP you avoid being screwed.

As @Nathan Gesner previously posted, some PMC's do have actual Eviction Guarantees. 

Usually they are offered on Class A and sometimes Class B properties & the corresponding tenants. 

WHY?

Because the risk of an actual eviction decreases as the credit score of a tenant increases.

So, the odds of a tenant with a 680+ credit score not paying and having to be evicted a small. EASY to offer a guarantee on this as a PMC will rarely have to pay out to cover!

Would recommend being VERY careful if a PMC is offering an Eviction Guarantee on Class C properties => where tenants will usually have credit scores under 620.

Bottom line: if you have a Class A property, an Eviction Guarantee offering isn't worth taking a chance on poor performance. So, don't worry about it when screening PMC's. For Class B properties it will have some value. For Class C properties it may be a bait & switch the PMC will find some way to get out of.

Yes, that is a good point on the Class type. There are a least a couple companies in the town that only manage A and B but there are many areas in the country where a PM may not have that luxury. These are class B and rent easily due to proximity to the college. The PMC companies I'm looking at generally use 680 credit scores, have several hundred units, and have been doing it for 10+ years. Online reviews are a highly questionable metric but if a company has a vast majority of 1 star reviews from both owners and tenants and hasn't even responded to them, this may be a bearish indicator. I'm not going to use a newbie company that's still going through the learning curve. I was curious about the eviction fee structure but it was by no means a defining metric.

[Eliott Elias]

Depends on what your agreement with your PM says. I come out of pocket to evict. 

[Chris Wanke]

Quote from @Tom Fidrych:

Quote from @Drew Sygit:

@Tom Fidrych BE CAREFUL about "Eviction Guarantees"!

Don't be foolish and just blindly look for them without understanding why they are offered. This will HELP you avoid being screwed.

As @Nathan Gesner previously posted, some PMC's do have actual Eviction Guarantees. 

Usually they are offered on Class A and sometimes Class B properties & the corresponding tenants. 

WHY?

Because the risk of an actual eviction decreases as the credit score of a tenant increases.

So, the odds of a tenant with a 680+ credit score not paying and having to be evicted a small. EASY to offer a guarantee on this as a PMC will rarely have to pay out to cover!

Would recommend being VERY careful if a PMC is offering an Eviction Guarantee on Class C properties => where tenants will usually have credit scores under 620.

Bottom line: if you have a Class A property, an Eviction Guarantee offering isn't worth taking a chance on poor performance. So, don't worry about it when screening PMC's. For Class B properties it will have some value. For Class C properties it may be a bait & switch the PMC will find some way to get out of.

Yes, that is a good point on the Class type. There are a least a couple companies in the town that only manage A and B but there are many areas in the country where a PM may not have that luxury. These are class B and rent easily due to proximity to the college. The PMC companies I'm looking at generally use 680 credit scores, have several hundred units, and have been doing it for 10+ years. Online reviews are a highly questionable metric but if a company has a vast majority of 1 star reviews from both owners and tenants and hasn't even responded to them, this may be a bearish indicator. I'm not going to use a newbie company that's still going through the learning curve. I was curious about the eviction fee structure but it was by no means a defining metric.

Depends on the agreement. Some Pm companies will offer surevestor insurance. This is a tiered system that protects you against eviction, damages, and other issues. However, you will pay extra for that even if you don't use it. I firmly believe communication needs to be clear, concise, and transparent when selecting a property manager. Going over the agreement and making sure you understand that agreement can save a headache for you in the future. I work at a local Pm in Eugene, Oregon. I am the direct contact for anything owner related—a newly offered position to bridge the gap between owners and the management company. My company has been around since 2008 and wanted to improve the owner experience within property management. No matter the property or condition of it, you need to ensure that the management company is the right fit and aligns with your goals for the property. You should do your due diligence in selecting a property management company because not all are created equal. You wouldn't hire a babysitter purely off on reviews, right? Your investment property is like your baby. You need to meet face to face and ensure goals, communication, and trust all align. If that occurs, the eviction clause will be the least of your worries because you know the process and know your situation is being taken care of for you. Again every PM is different and has different prices and services, but you need to find the right one for you. If you have any questions or concerns or want to hear more from someone local in your area, you can message me anytime. I hope that helps.