What is Non-Owner Occupied?

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  • Written By: Mary McMahon
  • Edited By: C. Wilborn
  • Last Modified Date: 19 August 2019
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Non-owner occupied is a term which is used to refer to a one- to four-unit property which is not occupied by the owner, either as a primary or secondary residence. In other words, the property is maintained as a rental. For reasons of statistics, properties are classified as owner occupied or non-owner occupied to learn more about the demographics of a neighborhood. This information can also be important to tax reasons and for financing, because non-owner occupied homes are treated a bit differently.

Property owners may buy a property specifically as a rental investment or they may decide to lease their residences when they move or acquire different property. When it comes to loans, non-owner occupied properties come with higher interest rates because they have a higher risk of default. The better someone's credit rating and history, the more likely he or she will be able to get a lower interest rate, but the interest is still usually several percentage points above the interest for an owner occupied home. Some people attempt to get around this by concealing the fact that they are purchasing a property as a rental, although this is not legal.


For taxes and other financial declarations, the nature of the property which people own can be important. For example, for college financial aid, owner occupied homes may not be counted as part of the family assets, while non-owner occupied rentals maintained by the family will be counted and considered when developing a financial aid award. Likewise, different types of tax incentives are available for different types of properties.

Housing statistics also rely on data about who is occupying residential properties. A high percentage of non-owner occupied properties can drive property values down, making such statistics of interest to real estate agents and people who are in the process of buying real estate. It can also provide important information about the makeup of a community. For example, a community might have high numbers of rentals because much of the population is transient and does not want to buy homes, or because many residents are at an economic disadvantage and cannot afford to buy.

People who are interested in viewing statistics for their communities or communities to which they are considering relocating can often find them online at websites which provide community profiles. It is usually necessary to know the postal code, and it can be helpful to know about surrounding communities when looking at maps, community breakdowns, and other information.


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