Real estate investors are always on the lookout for sound investment opportunities—which makes them interesting clients. When you want to build relationships with them, it is critical to be a source of new business. One method you can pursue to grow your inventory is targeting absentee owners. Below you can find tips put together by the premier independent escrow company in LA for how to work with absentee homeowners and benefit everyone involved.
How to Find Absentee Homeowners
It doesn’t have to be overly challenging to find absentee owners—if you’re willing to do a bit of legwork. Make a list of the addresses of the properties you want to research. Then request to review tax records at the local tax assessor’s office. When the listed address of the owner differs from the address of the property itself, it means that the tax bills are being sent to the former address. Why? Because that’s where the owner resides.
There are also absentee owner lists that you can purchase. Note that the more you pay for a list, the more current and accurate the information is likely to be.
Marketing Your Services to Absentee Owners
So how do you market your services to absentee owners once you’ve located them? With the right strategy, targeting absentee owners is actually quite straightforward.
There are several approaches you can take. Each of these focuses on making selling their property more attractive:
Ask the owner if they can afford not to sell in this market.
Especially in a seller’s market, it can be impactful to refer to recent sale prices of comparable properties in the neighborhood. You can point out that this could be the best opportunity the owner will have.
Suggest taking the property into a 1031 exchange.
Under Section 1031 of the U.S. Internal Revenue Code, property owners can avoid paying capital gains taxes when they reinvest the proceeds from the sale of an investment property in one or more similar properties of equal or greater value—within certain time limits.
Remind the owner that they might be able to exclude up to $250,000 in profit from the sale of the property from their income for tax purposes.
As the IRS states, a property owner may qualify to exclude all or part of the gain from the sale of the property from their income if they meet the ownership and use tests. This means that they must:
- Have owned the property in questions for a minimum of two years
- Have lived in it as their primary residence for at least two of the last five years
Note that if you’re emphasizing certain tax benefits, you should always consult with your tax advisor first. This way, you can ensure you’re up to date on the latest legislation and regulations.
Matching Absentee Owners and Real Estate Investors
In general, absentee owners need more guidance from their real estate agents precisely because they might not be aware of the sales potential of their properties. At the same time, real estate investors often depend on trusted real estate agents who have a solid inventory of properties with motivated sellers. By being aware of your local market, employing sound strategies to attract absentee owners, and knowing how to communicate with real estate investors, you stand a greater chance of making matches that benefit all parties involved. Contact Escrow Hub LA today to learn more.