How Absentee Landlords can Save Thousands of Dollars with One Simple Change
March 24, 2007
Managing a rental property from a distance can be a challenge for an absentee landlord. An important tip is to make sure the company that holds the mortgage for the rental property has your home mailing address on record as point of contact. If that’s not the case, make the change and avoid the unfortunate tale that follows.
Policy Changes
Some relatives of mine own a rental property in another state. Due to a policy change, their mortgage holder stopped withholding property tax as part of their escrow and no longer paid the property taxes. The company sent notification of the change to the rental address but my relatives never received the letter.
Unpaid Taxes
When the taxes hadn’t been paid, a certified letter was sent to the rental property address notifying the property owners the taxes were due but once again my relatives did not receive the letter.
Foreclosure
After a period of time the government foreclosed on the home and sold it to a real estate investor. When the current tenants received notice they had to move out they notified my relatives something was amiss. This is a property that they had owned for about 20 years and had appreciated tremendously in that time so they did everything they could to get the property back.
Expensive Lesson
After spending thousands of dollars in legal costs and a great deal of time, the buyer finally agreed to sell the property back to my relatives, plus fees, due to the circumstance of the original sale. The morale of the story is that keeping your home address as the point of contact for your mortgage company can save absentee landlords a lot of time and a lot of money.
Good call. As of right now I still pick up the mail that randomly comes to my rental house. When I do have a permanent address again, I will be forwarding all my mail to either my new address or PO box.
I agree. Making sure your own mailing address is the only point of contact for EVERYTHING related to your rental property is very important. And it’s worth while to double-check that the change was actually made. It seems like people frequently think that it is a mistake, and want to “help out” by “fixing” your address.
As a side note, did you know that your comment form doesn’t show up in Firefox? The name, mail, website portions do, but not the actual form.
Definitely a must to have your home address listed for all correspondence. It wouldn’t be a bad idea to run through a quick checklist either to make sure that everything has been paid. Taxes are the one payment that’ll never go away. Even if you have a management company take care of things, here’s a rule of thumb:
Inspect what you expect.
-limeade
http://fiscalmusings.blogspot.com
[…] This first article is dear to my heart. Money Smart Life might as well just be writing to me, when he points out how absentee landlords can save thousands of dollars. I am an absentee landlord and I’m pretty sure they don’t have my new address. Just two weeks ago, I tried to log into my account and try to change my address, but there’s no contact or support information available on the website. After a lot of research this morning, I finally found out how to send them an e-mail. I wish they had some kind of phone support. […]
[…] Ben at Money Smart Life has some tips for landlords who can’t take care of their rental properties on a daily basis. The tips may be small, but the savings are big (thousands of dollars). […]