Terrabella Realty Absentee Owners Guide

To most people, home owning is a fairly standard experience from one property to the next. 
Apart from the location, there’s little difference between owning a home in New York and owning a home in Miami the purchase, ownership, and sale always proceed in a way that we’ve become accustomed to over the years of owning various properties. 

Yet in actuality, there is quite a sizeable difference between owning a property in New York and owning one in Miami especially if you live in one city and only keep property in the other. 
This type of real estate is known as absentee ownership, and despite any appearances, it is an entirely unique kind of transaction that requires a special approach at each stage of ownership. 

In an effort to help our clients that either own or are interested in owning property outside their area of residence, we’ve created this handy guide to absentee owning. 
Within this guide, you will find everything you need to know about the purchase, ownership, and sale of your absentee property. 
In addition, if you have any additional questions regarding absentee ownership, we invite you to call us to ask one of our qualified absentee specialists.

PURCHASING 

Although the bulk of technical details of the transaction will be the same, there are definitely some unique points to purchasing an absentee property that you should be aware of. 

Absentee Purchasing Tip #1: Know your motivation!!! 

There’s little doubt that if you’re thinking of purchasing a property absentee, you probably already have a few good reasons in mind as to why you’re doing so. 
Whether you’ve decided to get a seasonal home in a different state, you’d like a vacation home that you can visit at a moment’s notice, you have business that requires you to be in a particular place regularly, or you’re just looking for a sound investment you most likely already have some kind of motivation to be buying absentee. 

The most important thing to do before you ever start looking for a property absentee or not is to know your purchasing motivations. 
In any situation it’s a good idea to prioritize the wants and needs that are driving you to purchase so that you’re better equipped to explore the market. 
In the case of absentee properties however, prioritizing your motivations is absolutely vital to the success of your transaction. Often, what’s driving you to purchase a property absentee will already determine, to a large extent, what kind of property or even the specific property you will buy. 

Absentee Purchasing Tip #2: Choose an area or city 

If you followed step one and made a prioritized list of you motivations for purchasing a property outside your area of residence, then the location you will buy in may already have been determined. 
If it’s for business purposes, you’ll pretty much already be locked in to a general area; a seasonal or vacation home location will be narrowed to your favorite relaxation spots. 
 

If your motivations haven’t determined the city for you, it may be a good idea to take your list of purchasing motivations and begin researching potential locations that fit with your needs. 
City websites, travel guides, and even tourist information are just a few of the resources you can utilize as you search for the city that’s right for you. 

Narrowing down your purchasing area to a city may not always be the end of your location search, however. 
In the case of larger metropolitan areas like New York, Los Angeles, and Miami there are literally dozens upon dozens of different neighborhoods and enclaves to choose from. 
Do you want to be near the art district, entertainment, or business district? 
How far away is a particular area from beaches, lakes, parks, or other recreational activities you enjoy? 
It may be necessary to continue your research to narrow down your list further, to specific areas or neighborhoods of interest which you may want to visit as you follow Tip #5. 

Absentee Purchasing Tip #3: Don’t forget your financial advisor! 

Purchasing a property is always a significant financial responsibility, and is definitely not something that should be entered into lightly. 
In the case of purchasing a second or third home as you find in absentee owning, your financial burden if effectively going to double or triple what it was with just a primary residence. 
As such, it’s always a wise idea to consult with a financial advisor before you even begin hunting for a new home. 
A good financial advisor who’s experienced in real estate investment will sit down and run the numbers with you to make sure that you can afford the cost of owning an extra property. 
 

The area that you choose for your absentee property will almost certainly have a different set of expected costs than your current area of residence. 
Make sure that you account for all of the hidden costs that may typically come up in owning a home in the area you choose, such as repair costs for natural disasters, fluctuating property taxes, and routine maintenance costs. 
For example, if you’re buying anywhere on the Florida coast, be prepared to make at least some minor repairs to your property in the fall or winter of every year after the close of the hurricane season. 

In addition, to a financial advisor, you may also want to speak with a mortgage broker to get a pre-approval for your loan in writing. 
This will help you further narrow your prospective property list by giving you a definitive price range that you can afford. 

Absentee Purchasing Tip #4: Find a good Realtor® in your absentee area 

Before you even get to the city of your interest, find a Realtor® that knows how to work with absentee owners. 
As the industry has continued to expand, many real estate agents have started to specialize in a specific area and/or type of real estate transactions. 
Often, you may be able to find a Realtor® who specializes in absentee ownership fairly easily. 
Either by asking a friend or family member that has purchased property in the same city, or by searching on the web for agents in the area, you should be able to locate at least a few prospective Realtors®. 

Once you have a list of names, starting calling these potential representatives and ask them as many questions as you can think of before you ever give them any specific information on what you’re looking for. 
Ask how much business they’ve had with absentee owners in the past, what unique circumstances they see in absentee ownership, and what kind of contact do they keep with clients after a transaction is closed. 
If an agent is able to answer all your questions and you feel comfortable talking to them, then it’s usually a good sign that this is the right Realtor® for you. 

Absentee Purchasing Tip #5: Don’t take your checkbook on the first tour 

Now that you have narrowed your search area and determined your optimal price range, it’s time to start house hunting. 
This is a very exciting time in the purchasing process, but there are also several major pitfalls that you should be aware of as you begin the hunt. Unlike normal non-relocation primary residence purchasing, absentee property will typically not be anywhere close to the city of your residence. 
As such, you will need to travel at least once to the city you’re interested in to find the right property. 

The most significant danger you need to avoid is getting romanced into buying a property that you may not actually enjoy, and this can happen more easily than you may think. 
Picture this: it’s January, it’s absolutely freezing where you live in New York, and it doesn’t seem like it’s ever going to be warm again; then, you go absentee house hunting in Miami where it’s a balmy 80 degrees and a nice breeze wafts gently over your skin as you stroll along the beach. 
Sounds great, right? 
The main danger is that in this situation, or many other similar scenarios, almost any property you look at is going to seem like a dream home. 
You can easily be seduced into buying a property that doesn’t really fit with the rest of your wants and needs. 
 

An easy solution to this is that on your first visit to any prospective purchasing city, you should simply leave the checkbook at home. 
That way, you won’t be tempted into buying the first property you see. 
This effectively makes your first visit, a viewing tour which is not only fun, but will keep you away from purchasing too soon. 
Tour the prospective properties your Realtor has found that match your buying criteria, spend time in each neighborhood, visit the local shops and restaurants, and take as many notes and pictures as you can. 
Then, when you get back home, review everything carefully and make your decision when you’re well-away from the temptation to buy immediately. 

***** 

Once you’ve made this first visit minus your checkbook and then narrowed the field down to your decision away from that out-of-town temptation to buy, the process to purchase your property should proceed in much the same way as a typically transaction. 
Return to the location city of your absentee property to take at least one more tour and give the final word. 
Then you can begin purchasing your absentee home with the confidence that you’ve done it right. 

OWNING 

Once you’ve purchased your absentee property, it’s time to start enjoying it! 
As the owner of an additional property in different area, you now officially have a real escape from the everyday you can jet off at a moment’s notice to another city and not have to worry about hotel reservations and other arrangements. 
 

Yet, there are still some points to ownership that are unique to owning absentee that you should keep in mind over the years as you enjoy your new property. 

Absentee Owning Tip #1: Keep in touch with your Realtor® 

If you’ve been following this guide, you already have a good Realtor® on your side who’s based in your absentee property area. 
Now you need to make sure that you stay in touch with them so you stay up-to-speed on local market changes that may or may not be affecting your primary residence. 
Very often, the conditions in the real estate market will vary drastically from one city to the next, and it can even fluctuate on a more narrow scale than that. 
 

As such, it’s almost impossible to keep abreast of what’s happening with a local real estate market unless you live in that city. 
The most practical solution is that you must arrange a longer-term partnership with the Realtor® in your absentee area to make sure that they keep you informed on what’s happening in that market. 
Some Realtors® actually provide this information already over the normal course of their business through newsletter, web log, or some other form of regular correspondence. 
If you selected your agent according to this guide, the agent you’ve chosen will hopefully have one of these correspondence methods in place; if not, make a personal arrangement with them to receive regular updates. 

Absentee Owning Tip #2: Make friends with a neighbor 

No… this is not a plight to get you more socially involved. 
It’s simply a good way to make sure your property stays safe and secure during the times that you’re not there. 
By making friends with a least one of your neighbors, you can let them know about your situation as an absentee owner and possibly even give them a rough picture of how often you’ll be in and away. 
Also remember to give them an emergency contact number where you can be reached at any time, and if you feel comfortable with them also give them an extra key. 

Then, when you’re out of town or at your primary residence, your neighbor can keep an eye on your property and make sure nothing happens that you’re not aware of. 
Sure, you’re probably going to know when a class 5 hurricane decides to barrel down on your absentee property, but you can save yourself time and money by having a neighbor go over to take a look for you instead of having to travel there to assess it yourself when it may not be necessary. 
In addition, you can rest secure knowing someone’s looking out for smaller damages like those caused by leaky pipes from upstairs neighbors, or projectiles coming through a window that wouldn’t make the national news.  

Absentee Owning Tip #3: Get the most out of your money 

When you’ve invested as much money as it takes to own an absentee residence, you want to be positive that you’re getting the most out of your investment. 
As such, make sure that you’re spending enough time in this new place to justify the ownership. 
Owning a secondary property in another city can save you a lot of time and hassle on things like travel arrangements and accommodations, but the convenience is only worth it if it’s not costing you too much. 

If you’re following this guide, you already ran the numbers with your financial advisor, so you hopefully have some kind of comparative numbers of owning your property versus either renting an apartment or staying in a hotel in the same city. 
As such, if you start visiting less often, or market conditions change significantly to your favor or disfavor in the local market of your absentee property, you may want to run the numbers again and consider moving on to Tip #4. 

Absentee Owning Tip #4: Know in advance what would motivate you to sell 

Financially, there’s nothing worse than tossing money at something and getting nothing in return. 
With absentee property ownership, this is always a constant risk that you will face. 
As such, it’s a good idea to decide in advance what would motivate you to sell. 
In doing so, you’ll avoid holding on to a property that you really don’t need or want. 

Here is any easy way to avoid unnecessary ownership: after you’ve had time to visit your absentee property a few times and really get to know it, decide what it would take to make you part with it. 
How high would property taxes have to rise? 
How many much money are you willing to spend on repairs for nasty seasons of weather? How many times per year do you have to visit to justify the cost?  

Once you’ve answered all of the necessary questions and decided when selling would be practical, go back and discuss all of your findings with your Realtor®. 
With their help, also answer a few additional questions like: How high would the sale price on comparable units have to rise to motivate you to sell? [and] What other homes would you be interested in purchasing in that area that would drive you to sell your current property? 
After answering all of these questions, you and your neighborhood Realtor® will both have a solid idea of the conditions to look out for that would prompt you to sell. 

To find out more information or to set up a consultation to start a long-term partnership with one of our real estate specialists we invite you to call us at 305.933.3022, or to contact us via email at info@terrabellarealty.com.

Click here to read the full Terrabella Real Estate guide to Home Buying .