2d:["$","$L2e",null,{"category":"$2f","relatedArticles":[{"id":"cG9zdDoyNjI1NzM=","databaseId":262573,"postId":262573,"author":{"node":{"id":"dXNlcjoz","databaseId":3,"userId":3,"avatar":{"url":"https://secure.gravatar.com/avatar/47938df052bf0a5283bd6b77ab786737?s=96&d=mm&r=g","size":96,"__typename":"Avatar"},"description":"SmartAsset employs a team of writers and editors with years of experience in the editorial, news and personal finance industries. Some staff members also hold the Certified Educator in Personal Finance (CEPF®) designation from the Institute for Financial Literacy.","additionalMeta":{"expertise":null,"__typename":"User_Additionalmeta"},"email":null,"firstName":"Michael","fullName":"SmartAsset Team","lastName":"Carvin","name":"SmartAsset Team","postCount":{"pageInfo":{"offsetPagination":{"total":1323,"__typename":"OffsetPaginationPageInfo"},"__typename":"UserToPostConnectionPageInfo"},"__typename":"UserToPostConnection"},"slug":"mcarvin","__typename":"User"},"__typename":"NodeWithAuthorToUserConnectionEdge"},"categories":{"nodes":[{"id":"dGVybToxOTQ4OA==","children":{"nodes":[],"__typename":"CategoryToCategoryConnection"},"databaseId":19488,"categoryId":19488,"link":"https://smartasset.com/real-estate/articles","name":"Real Estate","postCount":{"pageInfo":{"offsetPagination":{"total":149,"__typename":"OffsetPaginationPageInfo"},"__typename":"CategoryToPostConnectionPageInfo"},"__typename":"CategoryToPostConnection"},"slug":"real-estate","ancestors":{"nodes":[{"name":"Investing","slug":"investing","__typename":"Category"}],"__typename":"CategoryToAncestorsCategoryConnection"},"parent":{"node":{"name":"Investing","id":"dGVybTo1MzE4","slug":"investing","__typename":"Category"},"__typename":"CategoryToParentCategoryConnectionEdge"},"__typename":"Category"}],"__typename":"PostToCategoryConnection"},"content":"$30","date":"2024-09-19T18:16:32","excerpt":"

\n","featuredImage":{"id":"cG9zdDoyNjI1NzY=","databaseId":262576,"altText":"A final notice of eviction taped to the exterior of a home.","date":"2024-09-19T18:10:48","fileSize":334936,"mimeType":"image/jpeg","modified":"2024-09-19T18:12:06","sourceUrl":"https://smartasset.com/wp-content/uploads/sites/2/2024/09/iStock-1336370041.jpg","__typename":"MediaItem"},"modified":{"datetime":"2024-9-19","readable":"September 19, 2024"},"multipleBylinesByRole":{"editedBy":{"id":"dXNlcjoxMTc=","databaseId":117,"userId":117,"avatar":{"url":"https://secure.gravatar.com/avatar/9fffe2eb35204e151b68731435d247c5?s=96&d=mm&r=g","size":96,"__typename":"Avatar"},"description":"Arturo Conde is a senior editor at SmartAsset. He has a master’s from the Graduate School of Journalism at Columbia University and a bachelor’s from the College of Arts and Science at New York University. 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Some staff members also hold the Certified Educator in Personal Finance (CEPF®) designation from the Institute for Financial Literacy.","additionalMeta":{"expertise":null,"__typename":"User_Additionalmeta"},"email":null,"firstName":"Michael","fullName":"SmartAsset Team","lastName":"Carvin","name":"SmartAsset Team","postCount":{"pageInfo":{"offsetPagination":{"total":1323,"__typename":"OffsetPaginationPageInfo"},"__typename":"UserToPostConnectionPageInfo"},"__typename":"UserToPostConnection"},"slug":"mcarvin","__typename":"User"},"factCheckedBy":null,"secondEditor":null,"hideAuthor":true,"__typename":"Post_Multiplebylinesbyrole"},"adTargetingOverrides":{"fieldGroupName":"adTargetingOverrides","pageGroupNewKey":null,"__typename":"Post_Adtargetingoverrides"},"seo":{"canonical":"https://smartasset.com/investing/who-pays-legal-fees-for-eviction","metaDesc":"While it’s never ideal to remove a tenant from a property, certain situations may leave you with no choice.","metaKeywords":"","metaRobotsNofollow":"follow","metaRobotsNoindex":"index","readingTime":6,"title":"How Much Does an Eviction Cost for a Landlord?","__typename":"PostTypeSEO"},"slug":"who-pays-legal-fees-for-eviction","status":"publish","title":"How Much Does an Eviction Cost for a Landlord?","uri":"/investing/who-pays-legal-fees-for-eviction","tags":{"nodes":[{"name":"news-sitemap","__typename":"Tag"}],"__typename":"PostToTagConnection"},"__typename":"Post","adPageGroupOverride":null,"bylines":{"writtenBy":null,"editedBy":{"id":"dXNlcjoxMTc=","databaseId":117,"userId":117,"avatar":"$31","description":"Arturo Conde is a senior editor at SmartAsset. 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While it’s never ideal to remove a tenant from a property, certain situations, such as nonpayment of rent, lease violations or property damage, may leave you with no choice. Figuring out who pays legal fees for eviction can be complex and expensive for landlords because the cost of eviction includes not only legal fees but also lost rent and property turnover costs. Landlords must also prepare for additional expenses, such as property damage, though some of these may qualify for rental property tax deductions.

","

If you want to create or build out your real estate portfolio, a financial advisor could work with you to evaluate investment options and manage them.

","

Understanding the Eviction Process

","

Eviction is a legal process that allows a landlord to remove a tenant from their property. This step is typically taken when a tenant fails to uphold their lease agreement, such as not paying rent, damaging the property or engaging in illegal activities on the premises.

","

Before you can file for eviction, you must typically provide the tenant with a formal notice, giving them a chance to rectify the situation, which can include paying overdue rent or resolving lease violations.

","

If the tenant fails to comply, you can file an eviction lawsuit in court, which initiates the formal legal process. A judge will hear both sides, and if you prevail, the tenant will be legally ordered to vacate the property. In some cases, the sheriff may need to intervene if the tenant refuses to leave.

","

How long the eviction process takes depends on local laws and the tenant’s response, and can range from a few weeks to several months

","

Common Eviction Costs for Landlords

","

Common eviction costs for landlords can include legal fees, court filing fees and expenses for repairing or cleaning the property after a tenant leaves. Here’s a breakdown of five common costs that you may encounter.

","

Court Costs

","

Landlords typically need to file an eviction case with the local court, which requires paying filing fees. These court costs can range from $50 to $500, depending on the jurisdiction. Additionally, if the tenant disputes the eviction, legal representation may be required, which can add thousands of dollars to the total cost in attorney fees.

","

Sheriff and Locksmith Fees

","

Once the eviction is granted by the court, a sheriff may be required to enforce the eviction order and physically remove the tenant. The cost for a sheriff’s involvement can range from $50 to $400, depending on the location. In some cases, landlords may also need to hire a locksmith to change the locks once the tenant has been evicted, which can cost an additional $100 to $200.

","

Property Damages

","

Evicted tenants may leave behind property damage, especially if they were unhappy about the eviction. The cost of repairs can vary greatly, depending on the extent of the damage. Minor repairs might only cost a few hundred dollars but significant damage such as broken appliances or damaged flooring could cost thousands if you’re not covered by landlord insurance.

","

Property Turnover

","

Once a tenant is evicted, the property must be prepared for the next tenant. This can involve cleaning, painting and repairing any damages. On average, property turnover costs can range from $1,000 to $5,000, depending on the size of the property and the extent of the required work.

","

Lost Rent

","

During the eviction process, landlords often lose out on rent payments, as the tenant either cannot or will not pay rent. Eviction cases can take several weeks or months to resolve, leading to significant income loss.

","

How to Minimize Eviction Costs

","

","

To minimize eviction costs, landlords should screen tenants carefully, use clear lease agreements and address issues promptly to avoid legal disputes. Here are four common tips:

","$3d","

Who Pays Legal Fees for Eviction?

","

During the eviction process, both parties are responsible for paying their own legal fees until the court reaches a decision. Who pays legal fees after the resolution will depend on the court’s ruling, which can be influenced by physical evidence, lease terms and local fair housing laws that protect tenant rights.

","

For landlords, if the court rules in their favor, they may recover some or all of their legal fees from the tenant. However, if the tenant wins, the landlord may be required to cover the tenant’s legal fees as well.

","

Keeping thorough documentation and evidence can support the landlord’s case and influence the court’s decision on fee recovery. Understanding local laws is also essential for landlords to prepare for potential costs associated with the eviction process.

","

Bottom Line

","

","

Evictions are usually a last resort for landlords, but they come with significant financial costs. Court fees, lost rent, property turnover, and damages can add up quickly. By learning about the eviction process and using strategies like screening tenants and creating clear lease agreements, landlords can protect their investments and reduce losses.

","

Tips for Real Estate Investing

","$3e","

Photo credit: ©iStock.com/KLH49, ©iStock.com/designer491, ©iStock.com/andresr

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\n","featuredImage":{"id":"cG9zdDoyNjY2NjM=","databaseId":266663,"altText":"An investor calculating the defensive interval ratio (DIR) of a company.","date":"2024-10-28T17:44:36","fileSize":406841,"mimeType":"image/jpeg","modified":"2024-10-28T17:45:51","sourceUrl":"https://smartasset.com/wp-content/uploads/sites/2/2024/10/iStock-936335130.jpg","__typename":"MediaItem"},"modified":{"datetime":"2024-10-28","readable":"October 28, 2024"},"multipleBylinesByRole":{"editedBy":{"id":"dXNlcjoxMTc=","databaseId":117,"userId":117,"avatar":{"url":"https://secure.gravatar.com/avatar/9fffe2eb35204e151b68731435d247c5?s=96&d=mm&r=g","size":96,"__typename":"Avatar"},"description":"Arturo Conde is a senior editor at SmartAsset. He has a master’s from the Graduate School of Journalism at Columbia University and a bachelor’s from the College of Arts and Science at New York University. 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The defensive interval ratio (DIR) is a financial metric that can help investors assess a company’s ability to meet its short-term operating expenses using its liquid assets. Also known as the basic defense interval ratio, DIR measures the number of days a company can sustain its operations without relying on additional cash inflows. Calculated by comparing liquid assets, such as cash and marketable securities, against average daily operating expenses, DIR provides insights into a company’s financial stability and cash management practices.

","

A financial advisor can help you put together an investment strategy for your financial situation and goals.

","

What Is the Defensive Interval Ratio?

","

The DIR represents the number of days a company can continue to operate using only its liquid assets to cover its daily expenses. This liquidity ratio tells investors how prepared a company is to handle financial downturns or cash flow disruptions without taking on additional debt or liquidating long-term assets.

","

Unlike other liquidity ratios, such as the current ratio or quick ratio, DIR specifically measures a company’s ability to sustain itself without needing additional funds. This makes DIR particularly helpful for assessing a company’s financial resilience when revenue dips or the economy is uncertain. Companies with a high DIR may be better prepared to weather challenging times, as they have cash reserves to cover their daily expenses for longer periods.

","

The Defensive Interval Ratio Formula and Calculation

","

You can calculate a company’s defensive interval ratio with the following formula:

","

Accurately measuring DIR includes focusing only on assets that can be quickly converted into cash. These include cash, marketable securities and trade accounts receivable.

","

Liquid Assets = Cash + Marketable Securities + Trade Accounts Receivable

","

These three components are included because they represent cash or assets that can easily be converted into cash to help a company meet its short-term needs.

","

To determine average daily expenditures, add up the company’s cost of goods sold and annual operating expenses. Then subtract any non-cash expenses, such as depreciation and amortization. Then divide the resulting figure by 365 days to get the daily average:

","

Why the Defensive Interval Ratio Is Important

","

","

DIR provides insight into a company’s liquidity, revealing whether it can cover operating expenses without needing additional cash inflows.

","

A high DIR is a positive sign and indicates a company has enough liquid assets to maintain its operations for an extended period. This is particularly valuable during economic downturns or industry-specific slowdowns. For example, companies in industries with cyclical or seasonal revenue patterns often maintain higher DIRs to make sure they can manage expenses during off-seasons.

","

A low DIR, on the other hand, may indicate potential liquidity issues, suggesting the company might struggle to meet its obligations if cash flow slows down.

","

DIR is especially useful for assessing companies in volatile industries since it provides a buffer against potential downturns in revenue. Investors can use DIR alongside other financial metrics, such as the current ratio and quick ratio, to get a comprehensive view of a company’s financial health.

","

What Is a Good Defensive Interval Ratio?

","

A “good” DIR depends on the company’s industry, business model and financial strategy. And it can vary significantly depending on the industry.

","

For example, companies in industries with predictable revenue patterns, like utilities, may be comfortable with lower DIRs, as they have more consistent cash flows. In contrast, companies in more volatile industries, such as technology or retail, might aim for higher DIRs as a buffer against revenue fluctuations.

","

Evaluating a company’s DIR in the context of its industry and specific financial goals helps determine whether it has adequate liquidity. You could also consider the company’s long-term cash flow patterns and any seasonal impacts on revenue to determine if its DIR is appropriate for its financial strategy.

","

Frequently Asked Questions

","

What Does a High Defensive Interval Ratio Indicate?

","

A high DIR shows that a company has enough liquid assets to cover its operating expenses for a longer period without extra revenue, indicating strong liquidity and financial stability.

","

How Often Should a Company’s Defensive Interval Ratio Be Calculated?

","

A company’s DIR can be calculated quarterly or annually to show changes in liquidity and operating expenses over time. Regular calculation helps track the company’s ability to manage short-term financial needs.

","

Can the Defensive Interval Ratio Replace Other Liquidity Ratios?

","

The DIR is a helpful liquidity measure but should not replace other ratios like the current or quick ratios, which compare a company’s cash and assets to its liabilities for insight into debt levels. The DIR specifically assesses the company’s ability to cover daily operating expenses without extra inflows, and, when combined, these ratios offer a more complete picture of financial stability.

","

Bottom Line

","

","

DIR can help investors assess a company’s ability to cover short-term operating expenses with liquid assets. Along with other financial metrics, a company’s DIR can help you determine how prepared it is for potential cash flow disruptions and economic uncertainty. By calculating DIR, you gain insights into a company’s financial resilience, helping you make informed decisions when building your investment portfolio.

","

Investment Planning

","$51","

Photo credit: ©iStock.com/filadendron, ©iStock.com/stockbusters, ©iStock.com/Jacob Wackerhausen

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Sustainable investing, also known as socially responsible investing (SRI) or environmental, social and governance (ESG) investing, may appeal to investors who want their portfolios to reflect their values. These strategies focus on generating financial returns while also making a positive impact on society or the environment. Sustainable investment strategies can include selecting companies with strong […]

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A financial advisor can also help you align your financial goals with your personal values.

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What Is Sustainable Investing?

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Sustainable investing refers to an investment strategy that allows investors to support companies that are making positive contributions to the environment or society while avoiding those that may cause harm. By incorporating ESG factors into the decision-making process, the aim is to create a portfolio that not only generates financial returns but also supports long-term sustainability.

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An important goal of sustainable investing is to encourage companies to adopt responsible practices that can benefit the environment and society. In addition, companies with strong ESG policies tend to be more resilient and better prepared to manage risks, which can result in better long-term performance. Sustainable investing may also promote ethical corporate behavior, helping to address critical issues like climate change, labor rights and corporate transparency.

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Benefits of Sustainable Investing:

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If you’re considering sustainable investments, here are four benefits to consider:

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Positive impact: Your investments can support companies that are working to solve social and environmental issues.
Long-term performance: Companies with strong ESG practices may be better positioned for long-term growth.
Risk management: Focusing on ESG factors can help avoid investments in companies with significant regulatory or reputational risks.
Alignment with values: Sustainable investing allows you to align your portfolio with your personal values.

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These potential benefits can encourage investors to pursue sustainable investment strategies. However, it’s also wise to be aware of limitations and risks to this approach.

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First, since sustainable investing is a relatively new development, standards for disclosure by companies are not fully developed. This may lead to greenwashing, or an investment purporting to be more sustainable than it really is.

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Second, limiting investments to sustainable sectors or companies necessarily limits diversification and may lower returns. For example, if fossil fuel energy firms are leading a bull market, a sustainable investment philosophy that avoids them may generate smaller earnings than a more fully diversified approach.

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Examples of Sustainable Investment Strategies

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There are many sustainable investment strategies. Here are four to keep in mind.

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ESG Integration

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ESG integration involves incorporating environmental, social and governance factors into the investment analysis process. This strategy evaluates how well companies perform in areas like reducing carbon emissions, maintaining ethical labor practices and having transparent governance structures. ESG integration is often used to identify companies that are well-positioned for future success while avoiding those with high ESG risks.

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Impact Investing

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Impact investing focuses on generating measurable social or environmental impact alongside financial returns. Investors using this strategy often support projects or companies that address pressing global challenges, such as renewable energy, clean water access or affordable housing. Impact investing is popular among investors who want to see their money directly contribute to positive changes.

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Negative Screening

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Negative screening is the practice of excluding certain industries or companies from a portfolio based on ethical concerns. For example, an investor may choose to avoid industries like tobacco, fossil fuels or weapons manufacturing due to their harmful impact on society or the environment. Negative screening helps ensure that an investor’s money is not supporting companies that engage in practices considered unethical or unsustainable.

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Thematic Investing

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Thematic investing focuses on specific ESG themes, such as renewable energy, gender diversity or sustainable agriculture. This strategy allows investors to concentrate their investments in companies or sectors that align with their personal values or specific social or environmental goals. Thematic funds are often used by investors who are passionate about addressing particular issues, such as combating climate change.

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Types of Sustainable Investments

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In addition to sustainable investing strategies, investors can choose from specific funds and products available that focus on ESG factors. Here are five to consider:

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Bottom Line

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Sustainable investment strategies offer investors the opportunity to align their financial goals with their personal values. Methods such as ESG integration, impact investing and thematic investing can help to build a portfolio that not only generates returns but also promotes long-term sustainability. With a variety of sustainable funds and products available, you can take an active role in supporting companies that prioritize ethical practices while securing your financial future.

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Tips for Investment planning

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When a company focuses on maximizing shareholder value, it’s actively working to increase the wealth of its shareholders. This could mean boosting profits, increasing dividends or driving up the stock price. For investors, this can indicate the company is committed to providing a strong return on investment. However, there can also be negative impacts of maximizing shareholder value. Before investing in a company, do your due diligence to make sure those short-term profits aren’t coming at the expense of the company’s longevity and stability – especially if you plan to hold your investment for the long-term.

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A financial advisor can help you understand how companies create and maximize shareholder value so you can make informed decisions about your portfolio.

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What Is Shareholder Value?

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Shareholder value is the financial benefit that shareholders receive from owning a portion of a company. You typically measure shareholder value by the stock price, dividends and the overall market capitalization of the company.

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You can think of shareholder value as a representation of the health and profitability of a company. It’s a key metric that investors use to evaluate and compare different investment opportunities. A high shareholder value indicates the company is performing well and investors are likely to see a good return on their investment.

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When executives focus on maximizing shareholder value, they’re essentially working to ensure the company’s resources are used efficiently and effectively to generate profits. This can lead to better decision-making and improved corporate governance. In this way, shareholder value aligns the interests of management with those of the shareholders.

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4 Ways Companies Create Shareholder Value

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Companies create shareholder value through various strategies that increase profits and drive growth. Below are four ways of creating shareholder value:

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Improving operational efficiency. This can lead to reduced costs and higher margins.
Focusing on innovation. This helps a company develop new products or services that can produce additional revenue streams.
Strategic acquisitions or mergers. These can help companies expand their market share, enter new markets or acquire valuable assets.
Dividends or share buybacks. These can increase the value of the remaining shares and provide immediate financial benefits to shareholders.

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Maximizing Shareholder Value and What It Means for Your Investment

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When a company focuses on maximizing shareholder value, it’s actively working to increase the return on your investment. This can manifest in several ways, such as a rising stock price, increased cash dividends or a larger payout in case of a sale or liquidation. For investors, this is a positive sign, as it indicates the company is committed to achieving strong financial results.

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A company that’s maximizing shareholder value is typically more attractive to potential investors. This can lead to increased demand for the company’s stock, further driving up its price.

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However, maximizing shareholder value isn’t just about short-term gains. A responsible company also considers long-term sustainability and growth to ensure shareholder value continues to increase over time.

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The Drawbacks of Maximizing Shareholder Value

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While maximizing shareholder value can lead to significant financial benefits, there can be drawbacks, too. A focus on short-term gains can sometimes lead to decisions that are detrimental to the company’s long-term health. For instance, a company might cut back on research and development or reduce employee benefits to boost immediate profits.

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Prioritizing shareholder value above all else can also lead to unethical behavior. Companies may engage in practices that are legally questionable or potentially harmful in the pursuit of maximizing profits.

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As an investor, be aware of these potential downsides and consider the broader implications of a company’s strategies when making investment decisions.

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The Myth of Shareholder Value Maximization

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There’s a common belief that corporate directors and management, particularly in publicly traded companies, are legally obligated to maximize shareholder value. However, this isn’t true. Legal rulings have shown there is no legal requirement for companies to prioritize profit maximization when managing a corporation.

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This belief likely comes from a 1919 Michigan Supreme Court case, Dodge v. Ford Motor Co. The ruling focused on the duties of a controlling majority shareholder towards minority shareholders, not on the obligation to maximize shareholder value.

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However, the “myth” of shareholder value maximization challenges the assumption that focusing exclusively on short-term stock price increases or quarterly returns truly benefits shareholders or the company in the long run. Critics argue that this narrow approach can lead to decisions that harm the business’s sustainable growth potential, such as cutting essential research and development, underpaying employees or compromising product quality to reduce costs.

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Bottom Line

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A company that’s maximizing shareholder value can indicate a commitment to providing a good return on investment. However, investors should consider the potential drawbacks and the broader implications of a company’s strategies to maximize shareholder value. By doing so, you can make more informed decisions about your investment portfolio and support companies that align with both your values and your financial goals.

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Stock Picking Tips

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