If there’s a downside to investing in real estate, it’s dealing with nonpaying tenants. Many people prefer to put their money in the stock market because even with diligent screening, it’s inevitable that you’ll encounter tenants who fall behind on their rent. When that happens, your real estate becomes a massive headache. However, according to a recent article in the Wall Street Journal, rent problems could be well on their way out.
What Is Eviction Diversion?
The City of Brotherly Love, Philadelphia, is spreading love to landlords and tenants through eviction diversion. In short, it’s like real estate marriage counseling. Instead of heading straight for a divorce—i.e., an eviction—landlords must enroll in out-of-court negotiations with tenants before they can sue to remove them.
If that sounds like another headache for landlords before the inevitable eviction happens, the stats show otherwise. Philadelphia is known for low income and high eviction rates. However, since eviction diversion was enacted, court filings to remove tenants were down 41% in the 12 months ending…