Most homeowners looking to sell their homes lived in it more often than not before choosing to put it up for sale. While this is the standard, it doesn’t necessarily imply that it always happens.
Not all homeowners looking to sell were actually residents in the home before deciding to sell. Some people fall into the category of people who own a house without it being their primary residence. These people are called absentee owners.
So, if this describes you, you’re probably wondering how to sell your house as an absentee owner. Here’s the answer you seek.
What Is an Absentee Owner?
Absentee owners refer to real estate investment trusts (REITs), corporations, and individuals who own commercial or residential properties but neither reside there nor are involved in their management. The properties in question are usually investment properties.
They are usually residents elsewhere, serving as their primary residence or mailing address. This category of owners usually has a property management company or third party managing the property(ies) while they play a passive role. A property owned by an absentee owner is termed a non-owner-occupied property.
How Does Absentee Ownership Happen?
Absentee ownership isn’t always a conscious effort of individuals to invest in real estate. In certain cases, they are thrust into this role by virtue of some situation where they find themselves. Here are some of the scenarios where this could happen:
Inheritance
You could inherit a house, and since you’re not looking to use it as a primary residence or sell at the time, you could choose to rent. If you choose not to get involved in the management of the property, then you’d hire a third party to handle management duties and rent collection.
Management Exhaustion
Managing a property on your own can be physically and mentally exhausting. If you’re dealing with difficult tenants or the property requires a significant amount of upkeep, it can be a lot of hassle.
In such a scenario, if you don’t want to sell, you could outsource the entire activities involved with the property. So, you assume the position of an absentee owner and earn passive income.
Pros and Cons of Absentee Ownership
Absentee ownership has certain upsides and some other downsides, too.
Pros
Multiple Property Ownership
Since you’re not tied down by a single property, you can own several in several locations with property management companies at the helm of management. This gives you time to focus more on the business aspect of finding more properties to purchase and rent.
Freedom and Flexibility
There are really no rules you have to follow as an absentee owner regarding staying close to your property. You can choose to live in a whole different state or city, in fact.
Since you don’t have to be on-hand to attend to your tenants, you can plan your schedule however you want with a certainty of zero disruption. You can travel and vacation whenever you want since you have no landlord responsibilities.
Rental Income
As an absentee owner, renting your property out implies steady rental income. This passive income neither requires your presence nor your contributions. All you have to do is leave the property to be managed by your chosen property management company. They would be responsible for rent collection, tenant management, and maintenance.
Cons
No Control
When you hire a third party or property management company to run your property, you transfer authority and responsibility to them. A poor manager’s actions or inactions can damage your property, requiring costly repairs. The same can be done by bad tenants.
Management Costs
Hiring the services of a property manager can be pretty steep. Since the property manager assumes all your responsibilities, including rental listings and maintenance, they would charge for these jobs. So, you would have to factor the payment into your cash flow.
Out of the Loop
Absentee owners are almost always oblivious to happenings in the real estate markets where their properties are located. This is especially true if you have several properties in various areas.
Tracking the news in the various markets can be a hassle, so you would be out of the loop with respect to news like prime opportunities to sell.
Selling as an Absentee Owner
If you’re in a position where you’re tired of dealing with tenants or poor property management companies, and you just want to sell, there are two main options for you to explore.
- Conventional
- Selling As-Is
Conventional Sale
A conventional sale refers to hiring a real estate agent and listing your property on the open market for potential buyers to see. It is usually a long process and includes various elements.
Now, if you’re looking to sell your property as an absentee owner, here are some things to do before proceeding with the sale.
Visit the Property
It’s critical that you come to examine the property yourself or alongside a professional home inspector. You have to ensure that there are no safety or health hazards and that the property is in good condition.
Make Repairs
There’s a chance of some damage — whether minor or major. Usually, you can decide to take it up with the tenant, especially if the damage results from misconduct or negligence. Depending on the details of your contract with the property manager, they may also be liable.
However, this can result in a protracted legal procedure, causing your home sale to be delayed. Once you’ve put the property in order, you can proceed to the sales process.
Sell As-Is
This can be an excellent option if you’re anxious to rid yourself of the property. You don’t have to conduct repairs or go through the hassle that a conventional sale typically spells. As an absentee owner, you want to sell as quickly as possible for a good price, and selling as-is to a local cash buyer can see you closing in as little as seven days.
Who’s going to buy? We can help out with that! We buy houses that need serious repairs or are in various other conditions. At dsouzahomebuyers, we can provide you with a cash offer for your house in no time!
You don’t have to deal with any of this hassle. No need for repairs or renovations!
Fill out this form to get the process started, and we could be closing in as few as 7 days! Remember, no fees, no commissions, no closing costs!
If you have any other questions, definitely call us at (925) 503 8193.
Final Thoughts
Running a rental business as an absentee owner can be way too much hassle than you’ve bargained for. If you’re no longer interested and looking to sell, you don’t want to protract the process. Selling as-is allows you to close the transaction quickly and access cash.
