The dreaded eviction. Although an effective and occasionally necessary course of action, no landlord is thrilled to legally evict their tenant. It takes time, energy, money, and a bit of hope as you hold out to see what parting gifts were left in your property (usually includes a lot of tires).
But wait. Isn’t that the reason we buy and hold properties? To have more time, energy and money? Absolutely! But not all properties/owner situations are created equal, and there are endless reasons why an eviction may be filed.
Maybe this was the owner’s first shot at owning rental property and didn’t realize the importance of screening tenants. Perhaps the property is in major need of repair, giving tenants little reason not to throw additional trash around the yard. Or maybe the tenant lost their job, had emergency medical bills, went to prison, or decided to spend their rent money on a gold-plated off-road recumbent bicycle.
Whatever the reason, an eviction is a major pain point. And an eviction alone, or paired with any number of other personal or property-related headaches, can be the motivation for an owner to sell a property as soon as possible. This is what we call a “tired landlord,” and why you, as the person looking to buy more rentals, should consider reaching out to solve these landlords’ problems.
Furthermore, Wisconsin evictions appear to be on the rise since the eviction moratorium ended on August 26th, 2021. So far in 2022, Wisconsin monthly evictions are trending nearly double the number of evictions filed during this same period (Jan-May) last year. Historically, we’ve seen evictions steadily rise from Spring through the end of the year before dropping off in Winter.
Of course, the drop in Winter makes sense given it’s more difficult to find a tenant during the coldest months. In that same vein, evictions during the winter can be an indication of additional issues if they’re willing to have a vacancy over keeping the tenant through the rest of the season.
However, this most recent winter, evictions actually continued to increase through February 2022 before dropping back to pre-winter rates in March and April. In May, we’ve seen evictions start to rise again, and we expect them to continue to rise through the end of the year.
Now to focus specifically on Brown County, how do eviction rates compare to the rest of the state? Brown County has consistently been in the top 5 counties for highest number of eviction filings in Wisconsin. Of course, much of the reason is that Brown County has the 4th largest population of all counties in the state.
Comparing January through May, Brown County averaged 57 eviction filings per month for three consecutive years from 2019 through 2021. Now in 2022, that same period is averaging 85 eviction filings per month – a 49% increase from previous years.
Even considering the pandemic and eviction moratorium, Brown County has been trending upward in eviction rates since 2019.
But what is causing these higher eviction rates? Is it population growth? Newer, inexperienced landlords trying to get into a hot real estate market? Shifts in the job market and economy? Many third-party sources point to the end of the moratorium as the cause of the increase. While this certainly may be a factor, we’d like to see more data. As the year progresses, we’ll be keeping an eye on eviction rates and the external factors that are potentially impacting these numbers.
As eviction rates increase, it presents a growing opportunity for you, the investor, to step in and buy these properties. Why? Because you have value to offer the owner that retail buyers don’t typically provide. You may be willing to handle a cleanout or renovation, help with difficult tenant situations, pay cash for a quick close, or structure a creative deal that ultimately puts more money in their pocket. The list goes on, but by reaching out and talking with tired landlords, you can determine the best approach to solving their problems and ultimately adding more properties to your portfolio.