Cleveland SFR Water and Sewer Bills

[David Lauka]

Hello BP!

I am considering purchasing a few SFR's in the greater Cleveland area (Euclid) and I've been made aware that the owner is responsible for paying the water and sewer bill. I was hoping to hear how some other people who invest in this market typically handle the bill (i.e. do you pay the bill and charge the tenant the bill amount or do you simply charge a higher rent). I've connected with a few property managers in the area who have told me that if I were to charge the tenant the water bill amount there is a good chance they may not pay. Are there any recommendations on how to best handle the water bill? Any insights are greatly appreciated, thanks!

[Gwen Fyfe]

This conversation is a good reminder to consult a local tax professional when you're investing out of state. All of us in the tax/accounting industry around Cleveland would tell investors about municipal tax (which as @Timothy Murphy III pointed out is not just RITA, but also CCA, and some cities run theirs independently... or don't have it but then it turns out that you're on the edge of a different taxing municipality than you thought...and then some cities don't tax passive income and others do...).

Unfortunately, for most tax returns, I spend as much time figuring out my client's municipal tax as federal tax. It's nuts and needs to be reformed, but in the mean time, be sure to get good local advice!