A key component of real estate investing is finding motivated property owners who want or need to sell. One likely candidate to look for is an absentee owner. Experienced real estate investors and real estate professionals understand the value absentee owner leads hold in the market.
If you're looking for a new way to find an investment property to purchase, learn what an absentee owner is, why they can be a valuable real estate lead, and how to start an absentee owner list.
What is an absentee owner?
Absentee owners are property owners who own real estate and do not actively live in or manage the property themselves. This can include owners of a rental property, investment property, or a second home. Many times, the property is located outside of the owner's local market, which could be a different city, county, or state from where they live.
Absentee owners are not limited to homeowners or small real estate investors but could also be a larger investment company or business that owns commercial real estate (CRE), like an apartment complex, retail center, or office, in multiple cities or states across the country.
Why absentee owners are a potential lead for real estate investors
While not every absentee owner is a motivated seller, there is a higher chance the property owner may want to sell because of the hassle and expense absentee ownership can bring. Some common reasons an absentee owner would be motivated to sell are:
- They may have inherited a property through probate and now have a second home to pay for, maintain, or market for sale from out of town.
- The property could suffer from poor property management, including a lack of ongoing maintenance or upkeep or a mismanagement of funds by the on-site manager.
- After being relocated or upgrading to a new home, the owner may have decided to rent their old house but had a poor renter experience.
- The homeowner no longer needs the home and is unable to sell it because of market conditions.
- The owner may be going through financial hardships and unable to keep up with the additional cost or maintenance of the property. This is especially common with vacation homes or vacant properties.
The more challenges or expenses the homeowner or property owner faces, the more likely they are to be motivated to sell -- and to sell at a discount.
Building vs. buying an absentee owner list
There are two ways to develop an absentee owner list:
- Build your own list by searching in public records and the property appraiser's website for absentee owners.
- Buy a list.
Building your own list is the cheapest method, but it requires a lot of time. In most cases, you start by driving for dollars, looking in your target market for vacant properties. Then you'll need to sift through tax records and the property appraiser's information online to determine whether a property is owned by an absentee owner.
Buying a list is a much faster process, but it will cost money. Large data companies like ListSource or PropertyRadar allow you to purchase an absentee owner list, defining your list criteria for a fee per lead.
There are also companies like REIPro or Absentee Owner Data Feed that offer software that automatically pulls and sorts through the property appraiser's and tax assessor's data, identifying absentee owners across the nation. Paying a monthly fee gives you updated data at your fingertips, allowing you to create or pull a new list whenever you want to start a new direct mail campaign.
Targeting absentee owners in summary
Locating and targeting absentee owners who you can market to increases the number of real estate leads you can acquire, as well as your chances for obtaining an off-market property or investment to list for sale or purchase. Investors can choose from a variety of marketing strategies including direct mail, cold calling, or online marketing but should develop a thorough understanding of how to talk with homeowners, analyze the data, and negotiate before spending their marketing dollars.