New owner from California (but property is in Ohio)

[Jonathan Partsch]

Hello,

My father recently passed away and I inherited his house in Ohio, but I am in California. I work full time and this is the very first property I have ever owned. I am intending to convert the house to a rental and have a property management company handle things for me since I will be far, far away. I have many questions. If you can answer my questions here or tell me the best fourm to ask my questions, I would very much appreciate it.

This is a tax question, I guess. I understand that I need an appraisal to determine my (stepped up) cost basis on the date I inherited the house. Is this correct? I have hired a certified general real estate appraiser for this. If I am planning to do some improvements to the property, will I need another appraisal on the date I convert the property to a rental (probably next year) to determine my basis for depreciation?

Do I need a tax accountant/CPA? I do only have this one house, and I keep very detailed records, but I realize there are suddenly a bunch of tax rules that may affect me and I know little about.

Should I have a home inspection done to determine any code issues or safety issues to correct prior to converting the property to a rental?

What special rules do I need to follow (e.g. proper number and placement of smoke detectors and carbon monoxide detectors) that might apply to a rental property that don't apply to a primary residence, or where can I find these rules?

Do I need a lawyer to help me create and/or review a lease? If so, how can I find a good landlord-tenant lawyer in my area of Ohio?

Is hiring a property management company a good idea? How can I find a good company that would take care of my property as well as I would if I were living there, get me a good rental rate, and deal with tenant issues quickly and professionally?

How can I determine which improvements would be cost effective? My house is a two bedoom, one bath, detached single family home. It's in an older neighborhood with houses built in the late '40s and early '50s. It's in great condition and mostly up-to-date, but the kitchen is dated ('70s/80s), and it has an attic level that was just begun to be finished and then left off sometime in the '70s or '80s. I am considering finishing the attic into a 3rd bedroom and possibly making some upgrades to the kitchen.

I already know I need landlord insurance. I will need this even if I am using a property management firm, correct? What else do I need to know? Or what important things might I be overlooking?

Thanks!!

[Charlene McNamara]

You definitely need insurance regardless of how it is managed. Personally, I would absolutely pay for a home inspection and I would think an appraisal is necessary for the home if there is a stepped up basis involved. I would discuss tax implications with your tax person/hire one if you don't have one. Do you have any other family in Ohio who can help connect you with a realtor, tax advisor and attorney who might be able to answer questions you might have about home ownership in general? 

I would recommend you hire someone to help you with legal issues if you don't already have someone. My father recently passed away and we inherited 3 houses from him, all out of state for us. Even though all his kids are home owners and landlords AND my sister is an attorney, and brother a tax guy,  we hired an estate attorney and a tax person to help us with the specifics regarding his estate, real estate issues and tax implications. They didn't actually do a ton of work, but helped us tremendously with issues about which we were unaware. It was absolutely worth the money!