What Is an Absentee Owner?

An absentee owner is an individual or corporation that legally owns a particular property without actually occupying it or actively managing it. The term absentee owner is intended to distinguish between property owners that are hands-on with their investm𒀰ent versus those who are largely hands off.

Technically, an individual can be considered to be an absentee owner simply by owning a piece of real estate without living in it, but this describes a majority of absentee landlords as well as most real estate companies and 澳洲幸运5官方𝓰开奖结果体彩网:real estate investment tr𝓰usts (REITs).

Absentee Owners Explained

Absentee owners are in real estate for the 澳洲幸运5官方开奖结果体彩网:capital appreciation and the rental income, particularly when it comes to corporate absentee owners. Corporate absentee owners tend to own 澳洲幸运5官方开奖结果体彩网:commercial property and use property management firms to keep the tenants happy. This hands-off approach keeps the company from being bogged down in day-to-day property management and allows the𒀰 company to focus on finding or building new investment properties. 

Absentee owners generally look at real estate from an investment standpoint only and may contract out all management duties to a 澳洲幸运5官方开奖结果体彩网:third party, as in a property management company. Absentee owner can describe a real estate investor with one condo in a different state ꧃from where they live, or it can describe a corporation that owns shopping malls and apartment buildings all over the country. 

𓃲 Absentee Ownersh🌊ip and Residential Rental Properties

Absentee ownership in residential rental properties is a different situation than corporate absentee ownership. These tend to be 澳洲幸运5官方开奖结果体彩网:individuals who&nb𒀰sp;do not live near enou﷽gh to their investment property to actively manage it. They may be in the same city or they may be in an entirely different part of the country or world. These individual absentee owners can also chooꦍse to use a third party to manage their properties.

That said, there is often a challenge in making certain the management compan꧟y is doing its job. Without a management company, absentee owners have to periodically check in on their properties, and this can lead to problems when tenant oversight or the property itself is neglected. The challenges of absentee ownership make these properties a target for other real estate investors who see absentee owners as potential motivated sellers. Consequently, some real estate investors compile lists of absentee owners as leads for property deals.  

Pros and Cons of Absentee Ownership

Absentee ownership on the corporate and individual l🧸evels share some advantages and disadvantages.

The advantage of absentee ownership is that a real estate investor can look for the best properties available without restricting the search to their nearby area or geographical region. Moreover, once a management system is in place for the properties, the portfolio of properties can usually be 澳洲幸运5官方开奖结果体彩网:scaled up quicker than an actively managed one can.

On the downside, absentee owners depend heavily on their property managers and that relationship can make or break an investment, as a toxic🌸 management company may lose an absen🌱tee owner good tenants and rental income before the owner realizes what is going on.