Absentee Owners as Percentage of Households

11 Replies

I pulled my list 30%+ equity, 3-5 bedrooms, absentee owners.

The farm area is sitting at 34k households in total, of that amount 5,500 are absentee owners! 16% of the homes in farm area are NOO!

I'm wondering is there a sweet spot that you massive mailers find when it comes to this ratio?  Playing with the options in list source it looks like a small amount of those are corporate controlled, and about the same amount are owned by a trust.  

The farm area is an affluent area where the median home price is in the 600k range so it's not likely that a significant portion of those properties are bank-owned, foreclosures, or burnt out hulks.

With a ratio like this and knowing that I am mailing to the absentee should I use a different copy, call to action, or other wording?  

@Troy Fisher  

I think you are on the right track...some questions and comments.  

How big is your "farm area"?  Is it a collection of zip codes?  A county?  Neighborhoods?  I believe that you can drill down even further to improve the targeting of your list.  PM me if you would like some help.

Even though this is an affluent area, if you are marketing to absentee owners, the motivating factor(s) for wanting to move a property quickly probably do not differ all that much from someone who is motivated to sell in a war zone.  Granted violent crime and other assorted unsavory tenant/neighborhood behaviors are not likely a factor in these properties.  That said, people who own 600k rental properties are not immune from getting sick, divorce, death, drugs, and unemployment.  

You may want to alter your copy a bit (Dan Kennedy has a good book on marketing to the affluent)...meaning the "My wife and I would like to $$$BUY$$$ your hou$e for ca$h" copy may not have the same magical and hypnotic effect on these sellers.

Again, I think you have the right idea in looking for areas with higher percentages of absentee owners.

That is actually a pretty high % of houses (I assume you set to Property Type = SFR) to be absentee, comparing it to other markets where I pull these lists. I don't care much about the ratio as far as how I message to these people. I do care about the ratio when it comes to understanding my farm area and which areas have more rental properties.

Now, the thing is, if you search for COUNTY = Santa Cruz, CA and compare the full SFR count to the Absentee count... you get 20.8% absentee for the entire county! In the county I'm in here in Texas (Tarrant), the ABS to ALL SFR ratio is 12.8% - more in line with what I see in a lot of other counties around the U.S. So, I'm not sure what it is about Santa Cruz county. Looks like you have a LOT of non-owner occupied houses out there in general!

Think about the PROFILE of the person you want to reach and that will help you think thru the messaging. We're looking for tired landlords and heirs who are tired of paying the holding costs on inherited properties. So, the 3 "pillars" of REI marketing work well here:
1) We pay CASH
2) We do it FAST
3) With NO REPAIRS

You can add a little "flavor" to the message for absentees by saying things like "Are TERRIBLE TENANTS or a VACANT HOUSE a financial DRAIN?" - that can make a connection ("Yes, that IS my situation.") but the solution is still built around the 3 pillars above.

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Originally posted by @Jeremy T. :

@Troy Fisher 

I think you are on the right track...some questions and comments.  

How big is your "farm area"?  Is it a collection of zip codes?  A county?  Neighborhoods?  I believe that you can drill down even further to improve the targeting of your list.  PM me if you would like some help.

You may want to alter your copy a bit (Dan Kennedy has a good book on marketing to the affluent)...meaning the "My wife and I would like to $$$BUY$$$ your hou$e for ca$h" copy may not have the same magical and hypnotic effect on these sellers.

Again, I think you have the right idea in looking for areas with higher percentages of absentee owners.

 It's a 30K+ household city. Nestled in the suburbs. I'm taking a broad swipe at the market, I don't want to be super targeted and want to cast a broad net.  

I definitely was not planning on doing the $$'s in this market!  

Thanks for the book suggestion I'll add it to my reading list.

Originally posted by @Dev Horn :

That is actually a pretty high % of houses (I assume you set to Property Type = SFR) to be absentee, comparing it to other markets where I pull these lists. I don't care much about the ratio as far as how I message to these people. I do care about the ratio when it comes to understanding my farm area and which areas have more rental properties.

Now, the thing is, if you search for COUNTY = Santa Cruz, CA and compare the full SFR count to the Absentee count... you get 20.8% absentee for the entire county! In the county I'm in here in Texas (Tarrant), the ABS to ALL SFR ratio is 12.8% - more in line with what I see in a lot of other counties around the U.S. So, I'm not sure what it is about Santa Cruz county. Looks like you have a LOT of non-owner occupied houses out there in general!

Think about the PROFILE of the person you want to reach and that will help you think thru the messaging. We're looking for tired landlords and heirs who are tired of paying the holding costs on inherited properties. So, the 3 "pillars" of REI marketing work well here:
1) We pay CASH
2) We do it FAST
3) With NO REPAIRS

You can add a little "flavor" to the message for absentees by saying things like "Are TERRIBLE TENANTS or a VACANT HOUSE a financial DRAIN?" - that can make a connection ("Yes, that IS my situation.") but the solution is still built around the 3 pillars above.

 Dev, 

Thanks for your feedback.  Right, I think you are right and wrong in thinking that this ratio shouldn't affect your copy.  And I hadn't really thought about it until you pulled the ratio for Santa Cruz.  I'm looking north and east of the mountains so I am not targeting Santa Cruz, I'll see what the ratio for the county I'm targeting is.  However, in Santa Cruz the reason the ABS is so high, is because we are a vacation home destination.  Knowing that, changing the copy is super important!  You could target something along the lines of: Do You Get Away Enough to use your beach home? Does your vacation home keep you up at night?  or something to that effect.

Of course you are absolutely right in using the 3 Pillars, and that the message needs to contain those to anyone we market to. This will be my first mailing, and the double digit number gave me a start. I should have pulled some more numbers before thinking that 16% was way out of line.  

Thanks for the feedback.

Far enough, the ratio - in your market - tells you where there are more vacation homes perhaps.  We have the same challenge over in Florida, where we're doing direct mail to Absentees in West Palm Beach, for example.  Of course, if you make your copy about vacation homes, guess who you are ELIMINATING in your messaging - landlords and owners of vacant (non-vacation) houses.  Who do you think is more likely to be motivated to sell to you at a discount?  The family with enough dough to have a vacation house out there?  Or the landlord whose rental house just got trashed by his last tenants?

So, I'm still gonna claim to be "right" - ha ha.  You are right that messaging is important - I agree with you but caution you not to market to the WRONG PEOPLE just because there are a lot of them.

Perhaps you mail your beach home message to only people in certain zips and at higher market values (upper 1/3 of market value) - and send the more traditional absentee message to houses that are more inland and in the lower 1/3 of market value. But I think the beach house message is a loser, ROI-wise. If I have a crappy beach house, I can still sell it on the MLS and have plenty of buyers.... because it's a BEACH house!

Hey man, I wish you the best.  Enjoyed the dialogue here.  HAPPY HOLIDAYS!

Originally posted by @Dev Horn :

Far enough, the ratio - in your market - tells you where there are more vacation homes perhaps.  We have the same challenge over in Florida, where we're doing direct mail to Absentees in West Palm Beach, for example.  Of course, if you make your copy about vacation homes, guess who you are ELIMINATING in your messaging - landlords and owners of vacant (non-vacation) houses.  Who do you think is more likely to be motivated to sell to you at a discount?  The family with enough dough to have a vacation house out there?  Or the landlord whose rental house just got trashed by his last tenants?

So, I'm still gonna claim to be "right" - ha ha.  You are right that messaging is important - I agree with you but caution you not to market to the WRONG PEOPLE just because there are a lot of them.

Perhaps you mail your beach home message to only people in certain zips and at higher market values (upper 1/3 of market value) - and send the more traditional absentee message to houses that are more inland and in the lower 1/3 of market value. But I think the beach house message is a loser, ROI-wise. If I have a crappy beach house, I can still sell it on the MLS and have plenty of buyers.... because it's a BEACH house!

Hey man, I wish you the best.  Enjoyed the dialogue here.  HAPPY HOLIDAYS!

 Dev,

You are absolutely right!  I'm not marketing to Santa Cruz for a couple of reasons, one happens to be that they are a high percentage of vacation homes, and I am targeting inland between San Francisco and San Jose because as you said, there are going to be tired landlords and owners of vacant homes out there. The second being a house can fluctuate on price by a couple 100k depending upon if there is a tree blocking the big window or not. A couple of 100k!  It's crazy.   

I think your ROI and MLS observations are absolutely correct! Because if it is a beach house you can turn it around by signing it over to one of the many vacation home rental locations out here and have them turn it into a break even situation in many cases.

It was great to hear that the 16% ABS ratio is not that far off the mark from what others are getting.  

Thanks for the feedback!

Originally posted by @Ned Carey :

Keep in m ind some of these answers come from consistent marketing and testing the results of different marketing pieces. 

 Ned,

As this is my first list pull from listsource, it struck me as a high percentage, and I was wondering if it was indicative of a certain kind of market, or if there were strategies using the criteria (Affluent Neighborhoods, High NOO Ratio) to work the copy a little better for the first round. I definitely will be trying an A/B marketing approach and trying different things over the course of my 6 month marketing run.

It was great to hear what some of the Brain Trust had to say about the information.

@Troy Fisher  Don't be so quick to discount Dev's advise. 

He has experience. You only have opinions.

You could flail around for some time trying to sort out your best targets. Or, you could take a small sampling and begin testing.

It's really the old question about 'How do you eat an elephant'? 

A: One bite at a time.

Absentee is a game of time; touching people multiple times along a timeline that hopefully hits that with the right message, the right way, at the tight moment, that they contact you.

I agree with @Jeremy T.  that you might find some good info from Planet Dan (Kennedy). I was in Platinum Mastermind group last year. 

However, I would suggest that you look for a different target market than the affluent and, as you mentioned, study Dan and others' copywriting material. Alternatively, while attending GKIC live events you're almost certain to meet cooywriter's who will do the job for you.

As I work all 58 CA counties, I've done deals in your town, too. It wasn't an affluent family but an issue with a special needs trust beneficiary. I don't know if I could have found the situation with a direct mail letter or even a sequence of letters. Once we started foreclosure it was a public record that you would have seen and coukd have pursued. 

The only vote that counts is the principal who responds to your marketing piece that leads to a profitable outcome. All others are just observers, including us BP posters.

Oh man, I didn't mean at all to discount anyone's advice.  I think @Dev Horn  made some great points!  And I appreciate it! I especially enjoy the discussion that he inspired and the thought process that I went through after his advice.  @Jeremy T.  and your own follow up about Dan Kennedy is great advice and not someone I've seen mentioned.  

I'm thinking that affluent maybe the wrong phrase, because affluent homes in the area are as you know in the MM$ range, and I'm looking at the middle to lower end of the road 600k in Alameda County.  

I've got no illusion that I am going to require a lot of testing to hit the sweet spot in the area which is why I was planning on doing a larger test to get a better sampling of where I get more hits.