Absentee landlordism is a concept where the landlord who owns the property is not present at the property site. Mostly, absentee landlords are those who invest in foreign properties. Imagine your lessor calling you up for every little thing and instructing you for everything. For instance: if your landlord was not an absentee landlord, you will have a tough time keeping pets, partying and have no flexibility in rent payments. On the other hand, there are downsides for absentee landlordism. In this article, Dc Fawcett, a real estate entrepreneur and mentor analyses the negatives of absentee landlordism.
Downsides for the renter
No proper communication
Sometimes, you cannot communicate urgent matters to the landlord. The distance serves as a big hurdle. Your messages may be overlooked. Your calls may not be received.
There may be some urgent repair works that have to be done. Although, there are property managers to whom you can communicate, some things have to be dealt personally by the landlord and he cannot be contacted easily or come down soon.
Downsides for the landlord
There are some matters which you should deal with in person. You may not be able to come due to the distance. Although, you have hired some property managers to manage property affairs during your absence, there are some concerns which you must inspect on your own. For instance: you have to check repair works to see if the quality is as good as your payments. The final supervision is yours.
Conducting the business will be too hard
Conducting the business will be really hard especially if you are new to the field. As a new landlord, you will not have enough income to hire people for every concern. Thus collecting rent, signing contracts, inspecting initial repair works and so on is tough. Also, when you are purchasing property unseen, you may be paying more than what is required.
Buying in foreign markets is risky
You cannot rely on local track records for buying property abroad. Foreign markets are different in nature and even adept landlords may fail when it comes to investing abroad. The investments are higher and involve the risk of loss of millions if you fail to get a good property. Also, you cannot file a law suit as easily as you can do locally. Foreign rental and property scams may be hard to tackle for you and you have to do a lot of research or hire a trusted real estate agent.
Tenants may take things for granted. They will not pay in time. They will misuse your absence. For instance: they will keep pets even if they are forbidden to do so and they may cause great damage to your property sometimes.
It is tougher for the landlord rather than the tenants in absentee landlordism. This Dc Fawcett analysis lists down the key cons of absentee landlordism. Absentee landlordism however comes with benefits also. For more on benefits on absentee landlordism read Dc Fawcett’s article on perks of absentee landlordism.