Definition: Absentee Owner – An owner who does not live in/on their property; most use the services of property management companies
An absentee owner, or absentee property, generally refers to the owners of investment property. Absentee owners do not reside in the location of your investment property and will typically live outside of the property’s local economic region; however, they receive income from real estate. Landlords and homeowners who rent their homes to tenants are often considered absentee landlords.
The term absentee landlord has been given a bad rap, in terms of its social connotation, due to highly publicized select stories about slum lords in the media. The truth is, there are very few so-called slumlords compared to the number of landlords who are genuinely concerned, involved, and knowledgeable about their tenants’ living conditions. Be sure to read consumer reports about your landlord and the property you’re interested in leasing…if the information exists. There’s nothing worse than moving into a home, settling down, and then realizing that the landlord hasn’t lived up to his end of the bargain.
Historically, absentee ownership has had major social and political influences for several European nations: France and Ireland before the Revolution suffered from exploitation by their nations’ wealthy landowners. Unfortunately, absentee ownership remains a crucial factor for many developing nations. The problem revolves primarily around concerns that absentee landlords drain local wealth by not allowing the money associated with their profitable properties to be reinvested within the economy in which the property is located.
