Absentee Owner List
The absentee owner is one of the most overlooked revenue opportunities in real estate. But top industry performers have realized that building an absentee owner list is an excellent way to ensure repeat business and a steady income flow for years to come.
This blog post explains everything you need about an absentee homeowner, referred to as For Rent by Owner (FRBO). And we’ll look at strategies to build FRBO into your portfolio.
WHAT IS AN ABSENTEE OWNER?
The best absentee ownership definition refers to a property owner who does not reside on or near their property. In other words, the owner is absent from the property’s day-to-day operations, maintenance, and management. An absentee owner might own rental properties, commercial real estate, or vacant land they do not use as their primary residence or business location.
The term FRBO is often used in rental properties, where the owner might hire a property management company to handle tasks such as tenant communication, rent collection, property maintenance, and repairs. This allows the owner to be more hands-off and not directly involved in the property’s management.
For example, a person who lives in one city but owns an apartment building in another and relies on a property management company to take care of tenant matters and property upkeep would be considered an absentee homeowner. The term is not inherently negative but highlights the owner’s lack of physical presence and direct involvement in the property.
WHAT DOES ABSENTEE OWNER MEAN IN THE CURRENT MARKETPLACE?
Earlier this year, NBC News reported that according to AATOM, the share of homes sold to absentee owners has increased since 2020 in 228 of 307 zip code areas across nine major metro areas.
What’s most notable about the absentee market is the preponderance of cash deals. Shehayer Bokhari, a senior economist at Redfin said: “We have reports that 75% of all investor purchases are done with cash.”
The same article quoted a Georgia-based Keller Williams agent as saying: “Absentee owners have cash, they have knowledge, they’re not as concerned about what the home looks like if they’re not living in it.”
The following are the three largest categories of absentee ownership:
- Residential Rental Properties: This is one of the most common categories of absentee ownership. It includes individuals or entities owning residential properties, such as single-family homes, multi-unit apartment buildings, and condominiums, but not living on the premises. These owners generate rental income from tenants who occupy the properties.
- Commercial Real Estate: Commercial properties, including retail spaces, office buildings, industrial properties, and warehouses, often have absentee owners. These owners lease the properties to businesses that use them for their operations. Absentee ownership in the commercial sector is prevalent due to the specialized nature of the properties and the expertise required for management.
- Vacation and Second Homes: Many individuals own vacation or second homes in different locations from their primary residence. These properties are often used for personal enjoyment, but the owners might need to be present for significant periods of time. Vacation properties might also be rented out when the owners are not using them.
These categories can vary in terms of scale and complexity. Some absentee owners may own a single rental property, while others may have a diverse portfolio across different locations. The challenges and considerations for each category can also differ, especially regarding property management, tenant relationships, and legal obligations.
PROSPECTING FRBO LEADS
Successful high-producing agents always have a number of investors they work with. Investors buy several homes and sell off those they no longer want. Having a few investors in your pipeline is a great sphere strategy for any agent. Investors are always considering when to cash out and looking to identify properties that meet their specific criteria.
Phone prospecting is the most effective and profitable way to build your absentee owner list. And Espresso Agent is the industry leader in effective and profitable real estate lead generation, featuring the best FRBO leads (Expired and FSBO) delivered to your desktop every morning.
OTHER OUTREACH STRATEGIES
While daily prospecting is the best approach to building an effective absentee homeowner list, there are other approaches you can use as well, including:
- Use Public Records and Data Services: Utilize public records, such as property tax records and county assessor databases, to identify properties owned by absentee owners. Many real estate data services offer tools to help you filter and identify these properties based on ownership and mailing addresses.
- Direct Mail Campaigns: Send targeted direct mail campaigns to absentee owners. Craft personalized letters highlighting your expertise in managing absentee properties and the potential benefits of working with you. Include your contact information and a strong call to action.
- Online Marketing and Advertising: Create ads targeting absentee property owners on platforms like Google Ads, Facebook, and Instagram. Use specific keywords and demographics to reach this audience. Develop engaging content that addresses the challenges and solutions for absentee owners.
- Networking and Referrals: Connect with other real estate professionals, property management companies, and real estate investors who might have insights into absentee property owners. Referrals from these sources can be valuable.
- Attend Real Estate Investor Meetings: Attend local real estate investor meetings, seminars, and networking events. Many absentee owners are real estate investors; these events can provide opportunities to connect with potential clients.
- Utilize Social Media: Leverage social media platforms like LinkedIn, where you can connect with property owners and property managers. Share informative content about absentee ownership challenges and solutions to establish yourself as an expert.
Remember, consistency is key when prospecting FRBOs. Develop a plan, track your efforts, and refine your strategies based on what yields the best results. Building relationships and demonstrating your expertise in managing absentee properties will help you stand out in this market segment.
ABSENTEE OWNER SCRIPT
Solid phone prospecting begins with proven scripts. Espresso Agent customers have access to some of the best scripts in the industry. Below is an example of a popular absentee owner script:
- Agent: Hi, I don’t know if you can help me. This is ________ at XYZ Realty. I am calling because I came across the property you rent on 123 Main Street. Is that property still for rent, and are you also the owner?
- Owner:Yes, my name is Mr./Mrs _________, and I’m the owner. Do you have someone who wants to rent it?
- Agent:No, I don’t, but we do have renters and buyers who come in and inquire regularly, and I am curious, do you have other rental properties in the area?
- Owner:Yes, at this time, I have about a dozen in my portfolio. I purchased this one about five years ago, and I’ve been very happy with it.
- Agent:Five years! That’s great! You have found a good system for finding income-producing rentals in this area. Have you ever considered cashing out of your current real estate investments in exchange for something more lucrative, such as through an IRS 1031 tax-free exchange?
- Owner:Well, that is interesting, you should ask. I have one that is getting to be a bit older and is not bringing in the income I would like.
- Agent:That’s interesting. We see that in the area, especially with some of the newer up-and-coming units close by. Tell me a little bit more about that property. How long have you owned it, and what would be your ideal replacement for it?
- Owner:I’ve had this one for approx 15 years. I should have gotten rid of it several years back. It’s a 3-bedroom 2 Bath in average shape compared to other homes in the area. I would really like to find something similar in size and style but over in the College District, closer to where the students like to live. How much could I get for this one in today’s market?
- Agent:That’s a great question. I would be happy to look into that and meet up with you one day when you have a few minutes. Would Thursday or Friday at two or 3:00 pm work for you?
- Owner:Yes, I have time on Thursday at 2:00 pm
- Agent: I’ll put that on my calendar then. By the way, Mr/Mrs_______, so that I am fully prepared for our meeting if what I say makes sense and you are comfortable with the estimated net sheet and my marketing;
Are you prepared to put that on the market with me when I come out on Thursday?
- Owner:Sure, I’d like to hear what you say, but I would be willing to do that.
- Agent: Are there other decision-makers who need to be present or is it just you?
- Owner:No, it is just me.
- Agent: I look forward to seeing you on Thursday at 2:00 pm
A script like the one we sampled above allows an agent to control the pace and direction of a prospecting call. It’s important to remember that, with FRBOs, you’re trying to establish a long-term relationship instead of making an immediate sale.
To learn more about working with scripts, check out our post 5 Tips to Master Real Estate Prospecting Scripts.
ABSENTEE OWNER LETTER
In addition to phone prospecting, you can reach out via email or a letter. Following is an example of an effective absentee owner letter:
SUBJECT: Unlock the Potential of Your Absentee Property with Expert Guidance
Dear [Property Owner’s Name],
I hope this letter finds you well. My name is [Your Name], and I am a dedicated real estate professional with a deep understanding of the unique challenges and opportunities that absentee property owners like yourself face.
As an absentee owner, you already know that owning a property from a distance can present a range of complexities. That’s where I come in – to alleviate those challenges and help you make the most of your investment.
Here at [Your Real Estate Agency], we specialize in assisting absentee property owners like you. Our comprehensive approach to property management and real estate services ensures that your investment is in capable hands, no matter where you are.
I will reach out in a few days to discuss how I can help you unlock the value of your property.
As the NBC report cited above suggests, this is an excellent time to add FRBOs to your business strategy. Using Espresso Agent, you can build an absentee owner list that can yield ongoing revenue over the years. Our post Empowering Agents with FRBO includes excellent tips on launching your FRBO outreach.
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