Out Of State Investments- CA to OH

[Kathy Tan]

Hi,

I live in California and am looking into investing in a property in Columbus, OH. I'm new to out of state investments and if anyone has resources on the following, I'd be really appreciative:

-How do taxes work if I purchase in OH and live in CA? 

-Where is the best place to find top realtors AND property managers in OH? 

-Any tips on out of state investments? 

Thanks!

[Art Mimnaugh]

@Kathy Tan you will be amazed how many CA to columbus investors there are in that market now so should be able to get a lot of information. I am based in San Francisco and we have grown our portfolio in this market for many of the same reasons I am sure you are looking at. To specifically answer your question on taxes (of course consult your CPA) CA is ruthless if you live in CA and have any interest in any LLC's no matter which state they are in. Ohio is super cheap ($99 one time to setup up an LLC) but for each LLc you will be charged a minimum of $800 a year in CA so makes looking at how you hold multiple properties slightly different. The other key thing to understand about Columbus is property taxes which can be brutal depending on the sub-market there. When evaluating a property on Auditors site make sure and check the current valuation. If for say is $50k and you pay $100k you will likely get a BOR reassessment that would not only double your property tax bill but is is retroactive to previous year's taxes based on how they are structured. All manageable as long as you build in these numbers to your models or use some methods to minimize this. Having a strong team can for sure help guide you in this process.

Cheers,

Art