How automated income verifications can reduce evictions

Full eviction cost breakdown for property managers

To better understand the total cost of an eviction, let’s take a look at the expenses by category, from serving an eviction notice to finding and securing a new tenant.

Fees for eviction filing

When you decide to evict a tenant, you incur court fees and legal costs to ensure your eviction notice is filed correctly with your state. Common costs associated with filing and enforcing the eviction include:

• Initial court filing: Cost to file an eviction notice with the court.
• Summons service: Order for the tenant to appear in court if required by your state.
• Additional filing fees: These depend on your state’s eviction laws, and some of them are optional. Additional fees may include an answer filing fee, default judgment fee, notice of appeal fee, and writ of assistance issuance.
• Legal fees: Payments to eviction attorneys for legal advice and eviction filing, which can vary between states. 
• Enforcement fees: Sheriff’s office fees if needed to enforce an eviction or lockouts if your state has lockout fees.

Lost income

In addition to paying fees to file an eviction, you could be on the hook for lost rent, especially if you are evicting someone for nonpayment or partial payment of rent. Each month that it takes to vacate the rental unit represents a loss of income on your end.

It may be tempting to think this is only an issue with tenants who refuse to leave, but increased rent prices and competition for apartments mean that it can take longer for a tenant in an uncontested eviction to find a new place to live. 

As a result, you may have people who are willing to move out but have a hard time relocating quickly. Unless you want to call law enforcement to make them leave, you’ll likely be dealing with unpaid rent for the total amount of time it takes for them to find a new place.

After the tenant has moved out, it will take even more time to get the apartment ready and find a new tenant, during which you’ll be missing out on rental income. 

By automating the income verification process for maximum accuracy, Truework can help you streamline the tenant screening process, fill units faster, and identify red flags sooner to avoid the issue altogether.

Post eviction fees

Once a tenant moves out of the unit, there are a few more costs involved with getting the place ready to rent again. First, you have your post-eviction fees, which cover jobs such as lock replacement and professional cleaning. If you’re dealing with property damage, post-eviction costs can increase significantly.

Then, you also have your tenant replacement expenses. These primarily include advertising available units and paying for services related to tenant screening.

Non-financial costs

In addition to the financial cost, evictions are frustrating and time-consuming, causing you to lose valuable productivity. Dealing with the eviction process can become an administrative burden that strains your resources. As you deal with legal documents and court hearings, it’s easy to lose track of routine tasks like maintenance and tenant screening.

Not to mention, evictions can damage your rental property’s reputation by creating a negative experience for other tenants. This is especially true if the evicted parties left behind an unpleasant smell that’s hard to get rid of or regularly generated excessive noise, leading to complaints from their neighbors. If evictions become an issue for your property, it will be difficult to repair your reputation, fill vacant units, and recover lost income.

How to reduce evictions by improving income verification

Nonpayment of rent is one of the most common reasons leading to evictions. Contrary to popular belief, this issue is relevant for properties of all income levels.

For example, the city of Los Angeles saw 40,000 eviction filings in 2023, and 96% of them were for nonpayment of rent. The 10 buildings that served the most eviction notices (more than 150 per building) were luxury properties.

As a result, it’s imperative that property managers take the time to accurately verify income during the tenant screening process so they don’t have to pay for their lack of due diligence later on. The problem with comprehensive screening is that it can slow down the application process, especially when it’s done manually.

Given the high competition in rental markets, property managers are challenged with balancing risk mitigation with faster application turnaround times. On the one hand, you want to avoid dealing with nonpayment of rent and costly evictions, but on the other hand, you don’t want to lose potentially qualified tenants because another property owner acted faster than you and approved a tenant application.

So, the question becomes, how can property managers improve tenant screening to minimize risk while also providing a seamless applicant experience?

This is one challenge where having the right technology in place allows property managers to achieve both goals: reducing the risk of fraud and evictions while providing efficient decision times.

How Truework automated income verification reduces the risk of income fraud and eviction 

With automated income verification, you don’t need to rely on time-consuming manual verification processes for each application. Instead, you can screen tenants faster and rest assured that the information you use is accurate. 

Truework is the only income verification platform that automatically orchestrates income verifications across several methods in one place, choosing the most efficient and effective option for each application. 

Here’s how property managers can use Truework to find that perfect balance between speed and risk reduction.

Faster income verification times

Every day you spend verifying applicant information is a day you’re not collecting rental income. When you orchestrate your verification requests across every major method, you get a more streamlined user experience and faster verifications no matter the applicant’s income type. 

Truework Income for Tenant Screening provides maximum coverage, allowing you to quickly verify income for up to 90% of applicants within 72 hours. Your staff can access Truework in their online application, property management system, or through a user-friendly web application ensuring easy and flexible integration into your existing workflow. 

Access to source data

Truework gives you access to more accurate sources of income and employment verification data, so you don’t have to rely as much on applicant-submitted documents. Truework Instant and Credentials use direct-to-source data from payroll systems or employers to ensure the most complete and up-to-date information about applicant income. Truework Smart Outreach, on the other hand, automates manual outreach directly to employers to give you access to reliable information while streamlining the verification process.

Automated document fraud detection

In addition to providing more accurate sources of income data, Truework Documents automates fraud detection for manual income verifications. Automatic fraud detection helps you screen out tenants who provide false information to secure a unit. 

As technology has led to more sophisticated instances of rental application fraud, manual review is no longer enough to mitigate your risk. Truework allows for faster and more accurate fraud identification by automatically converting income documents into a standard format and checking for data discrepancies. From there, you know which applications need closer examination prior to making a decision.

Reduce the risk of evictions with Truework automated income verification 

In total, you can end up losing $3,500 to $7,000 per eviction case when you take into account court costs, legal fees, lost rent, and tenant replacement. Beyond that, evictions take up valuable time and can easily create a negative renter experience for other tenants. 

While evictions aren’t the end of the world, they can be reduced through improved tenant screening and accurate income verification. With the right technology in place, property managers can significantly lower their risk of income fraud and eviction without creating a slow application process.

Explore Truework today and see how automated income verification can fit into your tenant screening process.