Eviction

Eviction is the court process for taking back possession of a unit from a tenant, most often after missed rent or a major breach of the lease. It is one of the most expensive events in a rental's year, hitting NOI through lost rent, court and legal fees and turnover repairs at the same time.

Timelines and rules vary widely by state and city, from a few weeks to many months. A three-month eviction on the default house costs $12,000 of rent before any legal fees or damage. That is five times the 5% vacancy and credit loss allowance in the calculator.

In markets with long eviction timelines or strong tenant protections, a higher vacancy and credit loss figure is prudent. Raising it from 5% to 8% cuts NOI by about $1,180 a year on the default house.