Ohio Real Estate

Steps to Buy & Manage OH Properties through Missy & ‘Retire with Real Estate’ team

Please note: Some material may be time-sensitive and may no longer apply.

 

Contents

I.Acquire

A.Learn

B.Analyze Funds

C.Select Property

D.Complete Purchase Contract

E.Pay Earnest Money

F.Get Loan

1.Bank contact info

2.Get loan

3.Manage loan

a.Review documents

b.Property insurance issues

4.Bank merger note

G.Get Appraisal

H.Get Insurance / Privacy / Asset Protection

I.Review Inspection Results

J.Close on House

K.Arrange Mortgage Payments

L.Complete Property Management Agreement

II.Manage

A.Correspond with Property Management

1.Get Income

2.Review Property Documents

3.Monitor Income / Expenses

4.Follow Company’s Process

5.POCs

B.Get / Pay Income & Expenses

C.Get Property Documents

D.Set Aside Reserves

E.Provide Reporting Requirements to Cities

F.Keep Good Documentation

1.Gather Tax Data

2.Digitize

3.Organize

G.Pay Taxes

1.Hire CPA

2.Get Data

3.Calculate

Calculate Deductions

Calculate Income

4.Pay

a.Pay federal income tax

b.Pay state income tax

c.Pay city income tax

H.Manage Property Taxes

I.Manage Property Insurance

J.Prepare for Audits

K.Manage Loan

L.Setup Calendar Reminders

M.Adjust Escrow

N.Schedule Routine Inspections

O.Inform New Address

 

 

  • Acquire

 

  • Learn

 

  • Learn about real estate investing:

    • Real Wealth Network:

      • For information on real estate investing (primarily single family homes), visit Real Wealth Network website.

      • If you need to develop an investment plan and choose a market, request a strategy session with a Real Wealth Network investment counselor.

 

  • Learn about OH market and Seller:

    • Learn about the “Retire With Real Estate” Team and market. 

    • To download a flyer on OH provided by Seller, click here.

    • To download Seller references, click here.

    • To learn about OH and Seller’s turnkey process on her website, click here. 

    • To learn about OH on Real Wealth Network’s site, click here. (Go to Cincinnati section). (You’ll need a login). To view flyer, click here. 

    • OH investment summary: Single-family, cash-flowing rentals in area between Cincinnati and Dayton, OH, with turnkey/full-service seller/property management. 

    • For more info, contact the seller (for contact info, see “Select Property” section). 

 

  • Advantages of buying in OH:

    • The company is very turnkey.

    • The company takes care of utilities, maintenance and other issues and just includes the charges in your property management statements. 

    • The company takes care of the eviction process with tenants. 

    • If you purchase your house all-cash and don’t have the advantage of escrow that comes with financed properties, the company will help pay your property taxes for you (see “Monitor Property Taxes” section). 

    • The company regularly protests your property taxes (see “Monitor Property Taxes” section).

 

top of page

 

 

  • Analyze Funds

 

  • Have sufficient funds available to purchase a property. Real Wealth Network recommends about $30,000. Conventional financing usually requires 20% of the purchase price down plus closing costs. If using IRA funds, funds are higher. 

 

top of page

 

 

  • Select Property

 

  • Ask Seller to email a list of the latest properties for sale. 

 

  • When looking at the property, analyze return on investment, city taxes, crime, local job and population data, etc. 

 

  • Seller Contact Info: 

    • Missy McCall-Hammonds; 

    • Office: 513-275-1512; Cell: 513-266-1437 

    • Email: 

      • JustAskMissyMcCall@Gmail.com (Primary; used for general inquiries/questions)

      • Dearmissymccall@gmail.com (Executive Assistance on this email as well)

      • Buywithmissy@gmail.com (used for correspondence regarding purchase contracts, progress photos, rehab updates, home inspections, etc.)

    • Website 

 

top of page

 

 

  • Complete Purchase Contract

 

  • Seller sends the purchase contract. 

 

  • Fill out the purchase contract

 

  • To download an example of a completed contract, click here.

 

  • Some things to note when filling out contract:

  • Line 11: Select "a" for inspection

  • Line 12: Check “no” for lead-based paint inspection. All homes built before 1978 have lead, but precautions are taken during rehab.

  • Line 13: Waive terminate inspection. Termites will be checked during the normal inspection.

  • Line 16: Aquifer tax is renewable tax that is part of property taxes on the home. It is not an additional tax, and it has been included in your property tax estimate.   It is to maintain the Great Miami River Waterway.  It is on every home in Butler County.  The tax is usually less than $25 per property per year.

 

  • Sign, scan and email back to the Seller.

 

  • The Seller will date after the deeds from the closings have been recorded into the company's name, and send they buyer the copies of the fully executed contract.

 

  • During this time, house is rehabbed if needed, and Seller sends you pictures of house.

 

top of page

 

 

  • Pay Earnest Money

 

  • Pay earnest money to Seller if required (approx. $1,000).

 

top of page

 

 

  • Get Loan

 

  • Bank contact info

 

      • Name: Chemical Bank

      • Website: ChemicalBank.com 

      • Phone: 

      • Customer Service (866) 731-6414

      • eBanking 810-985-0246

      • Mortgage loans: (616) 583-9528

      • General: (800) 867-9757, (800) 943-7386

      • Email: 

      • Customer Service: CustomerCareCenter@ChemicalBank.com  

      • eService: e-services@chemicalbank.com 

      • Loan Servicing: loanservices@chemicalbank.com

      • Individuals (Escrow/statements/account details):

        • Charles Bauchat, Senior Vice President, Loan Servicing: Charles.Bauchat@chemicalbank.com; 989.839.5213

        • Stacey Jeske, Loan Servicing Tax Clerk: Stacey.Jeske@ChemicalBank.com

        • Terri Miller, Customer Service Loan Service: terri.miller@chemicalbank.com; 866-731-6414

        • Carissa Madaj, Insurance Dept, Loan Service Center (Insurance paid through escrow): Carissa.Madaj@ChemicalBank.com; (866) 731-6414 Option 3

        • Shawn Huss, Sr Vice President, Mortgage lending; Shawn.Huss@ChemicalBank.com; Office: 513-624-3030; Cell: 513 703-6489

        • Nathan Daniels: Nathan.Daniels@chemicalbank.com

        • Laura Sharrow (Customer service): Laura.Sharrow@ChemicalBank.com, 800.943.7386

      • Fax: (989) 633-0424

      • Address: 

Attn: Loan Service Center

P.O. Box 1572

Midland, MI 48641-1527

      • Routing #: 072410013

 

top of page

 

  • Get loan

 

  • Get prequalified with the mortgage bank several weeks before you intend to purchase. 

 

  • Inform the bank of the following;

    • You have property under contract (attached contract), and want to finance it with lowest down. (Bank usually allows following but check to verify: 20% for first 4 houses, and 25% for 6 houses thereafter - up to 10 Fannie Mae houses can be purchased per person - if don’t have financed residence). 

    • If married, the loan will be in one partner’s name only (this is to allow the maximum amount of loans between the couple). 

 

  • Have all your financial documentation ready to send, and be ready for any audits. 

    • Digitize in advance, to streamline the process. For getting organized, see section Keep Good Documentation. 

    • Applying for a loan can be rigorous. Banks reduce their risk of bad loans by ensuing you can make your payments, and also have to meet governmental regulatory requirements to ensure they can resell your loan as Fannie Mae loans, which have strict requirements. 

    • You’ll need to both electronically and hard-copy sign numerous documents. 

 

  • Submit mortgage application. 

    • For bank contact info, see Bank Contact Info section. 

    • Things you may need to submit as part of the loan application:

      • Properties you are purchasing: buyer contracts and proof of hazard/homeowner insurance (get this from Seller’s team).

      • Income (i.e. W2s), bank statements and retirement account statements.

 

top of page

 

  • Manage loan

 

 

  • Review documents

 

  • To view and download your mortgage loan and escrow information (property insurance and property taxes), login to your mortgage bank’s website. 

  • If you are unable to get the information you need, contact the bank. See Bank Contact Info section. 

 

top of page

 

  • Property insurance issues

 

  • Caveat: If your Lender is Chemical Bank, they may be utilizing a third party to process their insurance. Although the bank is paying for the insurance out of your escrow account, the third party may not have what they consider acceptable proof of insurance. Watch your mail for a letter from your bank and/or monthly statements from to make sure that you have not received a notice regarding lack of insurance coverage. If you receive this notice, email the property management team and CEO with the address of the property and they will follow up to make sure that the bank has accurate and acceptable documentation.

 

top of page

 

 

  • Bank merger note

 

  • (Nov 2016): Talmer Bank and Chemical Bank merged. If you had a loan through Talmer Bank, note the following:

 

      • WHAT YOU SHOULD HAVE RECEIVED: 

        • Snail mail letter in mail from Talmer Bank about new mortgage servicer “Chemical Bank”.

        • Email letter from "Retire with Real Estate" Property Management about merger.

        • Snail mail welcome package from Chemical Bank.

        • Important:  if you did not receive any of this aforementioned information, make sure your most recent contact info has been updated with all entities (see Inform New Address section).

 

      • THINGS THAT STAY THE SAME: 

        • Loan numbers, terms and recurring transaction timeframes.

        • Escrow accounts (normally for property insurance and property taxes).

 

      • THINGS THAT CHANGED:

        • Payment Recipient (bank name, bank address, bank phone #, bank routing #).

 

      • WHAT YOU NEED TO DO:

        • On Your Personal Bank Site:

          • If you’ve been making payments from your personal bank’s website: Go to your personal bank’s website and modify payments to go to the new bank recipient. Change bank name, address, phone # (and routing # if needed). (For new bank info, see Bank Contact Info section).

        • On New Bank Site:

          • Access new account:

            • Go to new bank website (For bank info see Bank Contact Info section).

            • On right of bank’s home page, click on the highlighted area “New to Chemical Bank…”

            • Scroll down

            • Under "ePersonal Online Banking", click on "Log In.”

            • Enter information and set up account. 

            • If you have issues, call the bank. (For bank info see Bank Contact Info section).

            • Potential Issue: All your accounts from Talmer may not have moved to the new bank (i.e. if the names on your accounts differed by, for instance, some having middle initials and some not). In this case, contact the bank for help. (For bank info see Bank Contact Info section).

          • Set up eStatements:

            • Enroll in eStatements (to reduce snail mail). 

            • Potential Issue: You might not be able to do this until the bank enables capabilities.

          • Set up payments:

            • If you are not using your personal bank to make payments and they are not already set up through the mortgage bank, then set them up through the mortgage bank.

 

        • Taxes: 

          • When filing end-of-year taxes: You will receive two statements of account: one reflecting all payments made to Talmer Servicer, and one from Chemical Bank new Servicer. You will need to combine appropriate ling tax returns.

 

top of page

 

  • Get Appraisal

 

  • Lender orders appraisal. 

 

  • Appraisals are ordered about 2-4 weeks following earnest money payment.

 

  • Appraisals have to go through Bank corporate approval, which takes about 10 days.

 

top of page

 

 

  • Get Insurance / Privacy / Asset Protection

 

  • Below are steps specific for OH purchases. Hazard Insurance is usually attained first, followed by privacy and/or asset protection later (if feasible). 

 

  • INSURANCE:

 

    • Process:

      • Seller usually arranges hazard insurance. 

      • Insurance costs about $30/month or $340/yr. per house.

      • Insurance agent updates to mortgage companies, which makes insurance payments through escrow.

      • Liability Coverage: Liability protection is usually $1 million per occurrence/ $2 million aggregate in liability coverage per property.

      • Umbrella policy: May need to work with VP of Sales.

 

    • Insurance POCs:

      • Service Representative: Jessica Brockman, Client Service Representative, 816-398-4075, jessica@reiguard.com, jessica@nreig.com

      • Other POCs:

        • Juli Vaupell: Vice President, Phone: 913.262.1624, juli@affinitygm.com

        • Kim Benedick: Executive Assistant, Phone: 913.262.1624 

        • Kristin Stead: (Client Service Representative for N.D. properties); Phone: 913.262.1624; Kristin@affinitygm.com. 

 

 

  • PRIVACY:

 

    • ADDRESS: 

      • Work with Seller/Property Management Company if you can use their OH address vice your address to protect privacy of your personal address.  

 

    • LAND TRUST:

      • If property is not financed, work with Seller to put property in Land Trust. Check with Seller on steps, but see below for most likely steps: 

        • Request “Agreement & Declaration of Trust” document from Seller. 

        • Notarize the Land Trust.

        • Retain a digital copy for yourself.

        • Send original to title company or “Doris McCall, 6751 Forest Hill Lane, Hamilton, OH 45011.”

        • Let the Title Company know once the Trust has been sent to the Seller so the Title Company can get copies from Seller. The Title Company ensures the Deed gets written so that it reflects the property being deeded into the Land Trust. When the property is conveyed out, a Memorandum of Trust is recorded with the Deed. 

      • To revise a Land Trust, you are normally required to physically appear before a notary to have the updates made. But Ohio has an exception where you can do this without physically being present. You have to be known to the notary. And you have to print the document, sign it in blue ink, scan it in color and email back to the parties who are taking care of the notarization. 

 

  • ASSET PROTECTION:

 

 

  • ADDITIONAL INFO:

 

    • For more information on insurance, privacy and asset protection, visit site here. 

 

top of page

 

 

  • Review Inspection Results

 

  • Seller orders inspection same time as appraisal process. 

 

  • Buyer receives inspection results and has 5 days to negotiate fixes.

 

  • Always have someone on your team look over your documents, needed repairs and supporting pictures. Address all your concerns immediately so they can be addressed before closing.

 

  • A list of repairs is made. 

 

  • Photos of repairs are sent to the buyer when they are complete. 

 

  • Home is completely repaired before closing on purchase.

 

top of page

 

 

  • Close on House

 

  • Preliminary closing settlement documents are emailed before closing. Review documents and have title company and/or lender answer any questions you may have. 

 

  • Closing occurs about two weeks after appraisal.

 

  • If you do not reside near the Title Company, use a mobile notary to sign the closing documents. Arrange this through the Title Company and Lender. On closing day, bring a copy of your driver’s license and any other requested documentation. 

 

  • Note: Lender requires you to purchase Lender Title Insurance but Borrower Title Insurance is optional. Discuss with Seller first.

 

  • Get wiring instructions and amount of money you need for closing from Mortgage Bank/Title Company. 

 

  • Work with your bank to get funds transferred to Title Company before closing date. 

 

  • Use Title Company’s online email system to send/receive documents. They will send your account information to setup. 

 

  • Be sure to get digital copy of closing documents after you close. You will need the HUD for tax purposes.

 

  • Title Company POC is:

    • Fidelity Land Title Agency of Cincinnati, Inc.: Elizabeth Speranza.

    • Email: Esperanza@fidelitylandtitle.com; (Note: only use following if my email returns as “undelivered”: lizsperanza@me.com); Phone: (513) 354-5578; 

    • Assistants: 

      • Leah Belka: LBelka@fidelitylandtitle.com, (513) 354-5573.     

      • Angie Henson: ahenson@fidelitylandtitle.com, 513-354-5570.

 

top of page

 

 

  • Arrange Mortgage Payments 

 

  • If you purchased your property via financing, you’ll need to setup mortgage payments. 

 

  • Monthly mortgage payments must be sent to the Servicing Company used by your Mortgage Bank.

 

  • Set up payments either through your personal bank “auto bill pay”, or through drafts from Mortgage Bank.

 

  • An online account with Mortgage Bank will need to be created to view your mortgage details. 

 

top of page

 

 

 

  • Complete Property Management Agreement

 

  • Seller emails Management Agreement, which allows the Property Management Company to provide management of your property. 

 

  • Complete Management Agreement and return to Seller via email.  

 

top of page

 

 

 

  • Manage

 

  • Correspond with Property Management 

 

  • Get Income

 

    • After initially purchasing a property, work with the Property Management Company to send you automated monthly rent payments to your bank account. 

 

top of page

 

  • Review Property Documents

 

    • You can view and download various copies of documents related to your properties via the Appfilo Owner Portal. 

 

    • Some types of documents you can get are: proof of insurance coverage, management agreements, and leases. 

 

    • You can retrieve current anytime by logging into your Owner Portal and going to the "Documents" section.

 

    • When new documents are added to the portal, you should receive an email from donotreply@apfolio.com with the subject line, "A document is ready for viewing”. To view each item uploaded to the portal, click on the link in the email titled "View Shared Document.” 

 

top of page

 

  • Monitor Income / Expenses

 

    • Monitor, on at least a monthly basis, your income/expense online statements.

 

    • Communicate with property management company on any issues/questions regarding income, tenants, leases, expenses, etc.  

 

    • If a tenant who vacates leaves behind any repairs over normal wear and tear, the money will first be deducted from the tenant’s security deposit. The property management company will email you with a list of repairs needed and costs. If costs exceed around $200, they may request your approval.

 

top of page

 

  • Follow Company’s Process

 

  • Note process details of property management company:

 

    • First Year. The Property Management Company provides occupancy warranty for one year from date of purchase.  They also ensure owner pays no maintenance costs for one year.  If property becomes vacant during the first year, they cover the re-rent costs and make a rent deposit based on the advertised price. 

 

    • Monthly Statements: You must verify the address you want them to send monthly statements. You receive first monthly statement by the 15th of the month following your purchase.  The first month, there is prorated rent based on your closing date.  The company keeps reserves for repairs. On the first report, they set aside a one-time $200 Management Reserve per property, which is held in their bank account to cover any expenses that might come up.   

 

    • Software:  The monthly reports are stored in the Appfolio Property Management software, and notifications will come from the email address donotreply@appfolio.com and will contain a link that will allow you to access your reports.  For each one of your properties, there is a separate Owner Statement.  The beginning cash balance is the required reserves that have been funded for your properties.  All of the activity for your properties is listed either as an Income Item (left column) or an Expenses Item (right column). 

 

    • Prepaid Rent: If your tenant(s) prepay their rent, it will show up on the statement as income but management fees will not be charged and it will not be paid out until the following month when the rent is actually earned.  Your net income for each property is calculated from the Ending Cash Balance minus the reserve, minus any prepaid rent, and minus any outstanding expenses for the month.   

 

    • Management Fees: Management fees are 8% of collected rent, which includes any rent or back rent paid, as well as pet fees.  These are deducted monthly from your collected rents and reported on your owner’s statement.

 

    • Pet Fees:  Pet fees are either a one-time non-refundable $500 pet fee per property, or an additional $50 per pet per month.  This is paid to you with your monthly statement. This is also subject to a management fee.

 

    • Rent Up Fees: If the property becomes vacant after your one-year occupancy warranty, the Property Management Company charges a re-rent fee of 75% of the first month's rent, when it is rented.  This is the cost of advertising, and placing the tenant in the property.

 

    • Rental:  The Property Management Company requires that the tenant pay a full month's rent and security deposit when they sign their lease.  The next month, they pay the prorated first month's rent amount based on when they signed their lease.  They offer tenants a $10 discount on their rent if they pay before the first of the month as an incentive for prompt payment.

 

    • Property Inspection: The Property Management Company does regular inspections of your property to ensure that the tenant is taking good care of it and to check for any maintenance issues.  They inspect the property 60 days after a new tenant moves in, at 6 months, and then annually.  If you request an additional inspection of your property, the cost is $50.

 

    • Payments: You have the option of having your monthly payments deposited directly into a checking or savings account.  In order to set this up, the Property Management Company needs to know the type of account (checking or savings), the routing number, and the account number.  You may email or fax (513-737-8964) this information, or call 513-275-1514.  

 

    • 1099 Reporting:  The Property Management Company has you fill out a W-9 form for reporting your rental income. They are required to report gross rents collected for investors to the IRS every year.  They will send you a 1099-MISC form in January with the total gross rents collected for the previous year.  

 

    • Tax Reports: The Property Management Company will send you a year-end tax report that will include all expenses, including those you may be able to deduct on your taxes, such as maintenance, utility payments, and management fees.  Every January, you should receive a 1098 Mortgage Interest Statement from your lender, that will break out the amount of property tax, insurance, and interest that you paid on your property for the previous year.

 

top of page

 

  • POCs

 

  • Property Management POCs are:

 

    • General/All-inclusive:

        • JustAsk@RetireWithRealEstate.com

        • missymccall@retirewithrealestate.biz

        • JustAskMissyMcCall@gmail.com   

    • Sharon Niehaus: Sharon@BBRents.com; Phone: 513-275-1514; www.bbrents.com.  

    • Stephanie Hammonds (Chief Financial Officer/Operating Manager); Office 513.795.5863; Cell 513.702.8497; Stephanie@bbrents.com, www.bbrents.com.  

    • Tabitha Buell: tabby@bbrents.com.

    • Ashley Pleiman: ashley@bbrents.com; rerentbudgets@bbrents.com; Phone: O. 513.795.5864; C. 513.919.4300; www.bbrents.com.  

    • Rebecca Buell: beccabbrents@gmail.com

    • Myra Hargrove (Personal Assistant to Missy): myrabnb@gmail.com; Cell 828-400-4845.

    • Finances: Dylan Petty (Property Management), dylan@bbrents.com; (419) 569-5482; works under Stephanie. 

 

top of page

 

 

  • Get / Pay Income & Expenses

 

 

top of page

 

  • Get Property Documents

 

 

top of page

 

  • Set Aside Reserves

 

  • About $5,000 per house for first three houses and $3,000 for each house thereafter. 

 

  • Note: If you have Thrift Savings Plan (TSP)/401K retirement plan, can use loan for reserves. Click here for more information on the TSP and using a loan for reserve funds or even more investment funds. 

 

top of page

 

 

  • Provide Reporting Requirements to Cities

 

  • OH cities have special reporting requirements. Some want to know the owner, tenant, vacancy and new tenant dates.  All want info on you as they will be gathering income taxes.

 

  • For tenant information, work with the Property Management Company. For tax information, work with the city. 

 

  • For reporting requirements (to include tax requirements) per city, see Pay Taxes section that lists each city contact info.

 

top of page

 

 

  • Keep Good Documentation

 

  • Gather Tax Data

 

    • Keep good documentation to adequately do taxes at the end of the year, and also to be prepared for potential audits. 

 

 

top of page

 

  • Digitize

 

    • Digitize everything. 

 

    • Request to receive documentation electronically when possible to avoid scanning.

 

    • Be sure to backup computer regularly.

 

top of page

 

  • Organize

 

    • Organize everything on your computer by property, tax year, etc.

 

    • For an example of file structure on computer, click here.

 

top of page

 

  • Pay Taxes 

 

  • Hire CPA

 

  • HIRE TAX PREPARER: 

 

    • If needed, get a reputable Certified Public Accountant (CPA)/tax preparer who specializes in real estate if you have many properties and/or complex taxes (e.g. own your own business). 

 

    • If you use a CPA, they will e-file your returns, but if you have any payments you need to make (due to not having enough withdrawn throughout the year), you’ll need to do that. Also, you may need to manually, snail-mail your city tax returns/payments. Most OH city tax returns/payments are this way, so the CPA may send you the returns to sign and snail mail yourself to the cities. 

 

top of page

 

  • Get Data

 

    • Gather and calculate taxes in advance of taxes becoming due. (For tips on organizing data, see Keep Good Documentation section). 

 

top of page

 

  • Calculate 

 

Calculate Deductions

 

Property Mgmt Fees 

 

    • This amount you paid in property management fees appears on the end-of-year tax report emailed to you by your property management company by Jan 31 following the tax year.

 

top of page

 

HUD / Closing Costs

 

    • If you purchased your property during the tax year that you are completing your tax return, there are some costs on the HUD-1 statement that you can deduct. You should probably have a tax professional (CPA) who specializes in real estate help you. 

    • Tell your CPA that the mortgage interest and hazard/homeowner’s insurance ARE probably the only thing NOT to include from the HUD when he uses the HUD to calculate your deductions.

    • Exclude mortgage interest: Tell the CPA to exclude interest because you are already including it when you get it from the 1098 mortgage interest end-of-year statement (see “Mortgage Interest” subsection). 

    • Exclude hazard/homeowner’s insurance: Your homeowner’s/hazard insurance that appears on HUD line 903 can be excluded, but be sure to get the correct amounts from other sources and if unable to do so, include HUD line 903 instead (see “Hazard/Homeowners Insurance” subsection).

    • Include property tax:  You are probably safe to include your property taxes on the HUD as part of your deductions. Your property taxes that appear on the HUD are most likely not included within the property taxes amount appearing on your 1098 mortgage interest statement, as any tax amounts on your HUD were to set up the escrow moving forward. Taxes are not usually paid during closing. Taxes in Ohio are for the year before which you would get a credit from the seller. Sometimes, but rarely, taxes appear on HUD line 109, and you probably can deduct this. For more in property taxes, see section below on property taxes.

    • Loan costs – Many fees associated with the loan are amortized over the life of the loan but if you sell your property or refinance (through a different bank), you can deduct the costs during that sell or refinance year. Once you give the HUD to your CPA, they should track the amortization fees each year and add them for deduction purposes. 

    • Include everything else: Include everything else, which your CPA can help you with, based on whether it is a current year expense, depreciable item, etc.

    • More Info: For HUD-1 line-by-line guide, see BiggerPockets article here.

 

top of page

 

Mortgage Interest

 

    • If your property is financed, you’ll receive a 1098 Mortgage Interest Statement at the end of the tax year. 

    • The 1098 shows the mortgage interest you paid, and usually includes the property tax and insurance you paid as well. Note: Some banks don’t show the property tax and insurance on the 1098. If so, you’ll need to retrieve it form the Escrow Account statement they send you, or via your online account. All the disbursements that are listed need to be totaled for the final figure of what you can deduct. 

    • In addition to receiving the 1098 via snail mail from the bank, you can download it via your online mortgage account.

    • Note: if you had one mortgage company and then switched to a new mortgage company, you may receive more than one 1098. For details, see information in Get Loan section, where all mortgage-related info is located. 

 

top of page

 

Property Tax

 

    • Found on your end-of-year statement, sent to you via snail mail by your Mortgage company.  

    • Request if they can email it to you and/or set it up in your online account.

    • You get property tax data via your Mortgage Company because  the Mortgage Company pays property taxes on your behalf via escrow. If property is not financed, it might be found on Excel file sent to you by Property Management Company at end of tax year. (Note: If you bought your property in the same tax year, you might not show any Property Tax paid on these aforementioned statements, as it may have been paid through closing and appear on your HUD statement. In this case, ensure you give your HUD to your CPA). 

    • For more on property taxes, see “Manage Property Taxes” section. 

 

top of page

 

Hazard / Homeowner’s Insurance

 

    • Found on your end-of-year statement, sent to you via snail mail by your Mortgage company.  

    • Request if they can email it to you and/or set it up in your online account.

    • You get insurance data via your Mortgage Company because the Mortgage Company pays insurance on your behalf via escrow.

 

top of page

 

Repairs / Improvements

 

    • Found on the end-of-year tax reports sent to you by the Property Management Company at end of tax year. 

    • Note on Repair: Any expense line on the document that states “Rental Labor” equates to minor repairs. 

    • Note on Improvements: Improvements are usually items costing over $2,500, and cannot be fully deducted in the tax year, but must be amortized over time. 

 

top of page

 

Depreciation

 

    • Your tax advisor should be able to help you with this. For information on depreciation, see article here.

 

top of page

 

Calculate Income

 

Rent

 

    • Rental income you earned appears on your 1099-MISC Form and Excel file sent to you by Property Management Company at the end of the tax year. Their standard process is to send via snail mail due to the sensitivity of the documents, but you can request them to send via email if you’d like. 

 

top of page

 

Refunds/Credits (1099-G)

 

    • 1099-G / REFUNDS AND CREDITS  Any overpayments of taxes to tax authorities the prior year will be sent to you on a 1099-G form. If you deducted this on your prior tax year return, you must record this as income on your federal return the next year. For more information, (from OH state) on 1099-Gs, visit this website here. Note: in addition to state, each city tax authority has their 1099-Gs and processes as well.

 

top of page

 

  • Pay 

 

  • You must pay income taxes to federal, state and/or city tax authorities.

 

  • SUBMIT 1099-MISCS:

 

    • Submit 1099-MISCs by IRS deadlines. See aforementioned information.  Note: You are not required to file a MISC-1099 form to the IRS, property management company and state government tax authority. This is because Missy’s team is a corporation. Corporations are exempt from a customer needing to submit MISC-1099s, as the tax authorities already have the necessary information. 

 

  • FILE TAXES:

 

    • Note: April 15 is deadline but can put in extension until Oct 15 if needed to get paperwork in order. 

 

top of page

 

  • Pay federal income tax

 

    • Federal Income Tax:

        • File with IRS. 

        • Ensure enough is withheld throughout the year (through paycheck or quarterly estimated payments) to avoid having to mail a check at the end of the year and pay penalties/interest.

        • Returns can be filed electronically. 

 

top of page

 

  • Pay state income tax

 

    • State Income Tax 

      • File state tax in your state of residency (if state has income taxes). 

      • Ensure enough is withheld throughout the year (through paycheck or quarterly estimated payments) to avoid having to mail a check at the end of the year and pay possible penalties/interest.

      • Returns can be filed electronically. 

 

    • OH State Income Tax:

      • Website here. 

      • Phone: (800) 282-1780.

 

 

  • Pay city income tax

 

  • Overview

 

    • OH Cities Income Tax: 

      • Most OH cities require income tax.

      • They require you pay next year’s estimated tax by the end of the prior tax year, or you will be charged penalties.

      • To find which city your property is in, visit here.  

      • Estimated tax payments for upcoming tax year must be paid in advance by specified deadlines (can pay for whole year verses quarterly estimates to simplify). 

      • If filing a tax extension, send to the city tax department: (1) Payment for estimated taxes for current tax year; (2) Payment for estimated first quarter taxes for future tax year; (3) A copy of the federal extension to show that you requested an extension for the year. There is no requirement to send a separate city extension voucher. 

      • Some common cities you may have properties in appear below (includes not only tax information but reporting requirements - for info on reporting requirements, see “Provide Reporting Requirements to Cities” section). (To get a more comprehensive list of cities, contact the Property Management company, or click here for perhaps an older version of their list). 

 

  • Each city requirements

 

        • BUTLER COUNTY:

 

        • FAIRFIELD CITY: 

 

    • Website here. (513) 867-5327; Fax 513-867-5333; income.tax@fairfield-city.org.

    • Income Tax Rate: 1.5% (as of 2015).

    • How to File Return: 

  • Returns must be snail-mailed (unless you want to fax, which then you’ll want to include request for confirmation via email). 

  • Recommend you pay next year’s tax payments in advance, in one lump sum to avoid hassle of making 4 quarterly payments (and accidently missing a payment). 

  • Recommend you pay a little more than you think you owe to avoid fees/taxes later on. 

    • Other: Reporting Requirements on Tenants - Inform city when there is a new tenant/lease or vacate within 30 days of change. Give them “City Landlord Tenant Report form” (from www.fairfield-city.org  Individual Tax Forms  Miscellaneous Forms).

 

        • HAMILTON CITY:

 

    • Website here; Phone: (513) 785-7400; citytax@ci.hamilton.oh.us; Fax: 513-785-7401

    • Income Tax Rate: 2% (as of 2015).

    • Advanced Tax Reporting Requirements: If asked, send ‘Individual Income Questionnaire.’

    • How to File Tax Return: 

  • Returns must be snail-mailed (unless you want to email or fax, which then you’ll want to include request for confirmation via email). 

  • Tax payments must be snail-mailed. 

  • Recommend you pay next year’s tax payments in advance, in one lump sum to avoid hassle of making 4 quarterly payments (and accidently missing a payment). 

  • Recommend you pay a little more than you think you owe to avoid fees/taxes later on. 

    • Other: Reporting Requirements on Tenants – Respond if asked for information. 

 

        • MIDDLETOWN CITY:

 

    • Website here; Phone: (513) 425-7862. Fax: (513) 425-1928

    • Caveat: This city is this most problematic when it comes to taxes and audits. For instance, they’ve asked for: a copy of 1099-MISC, a breakdown of other expenses on Schedule E, and inquired why owner’s name is not on the property as owner (in cases where the property happens to be in a Land Trust).

    • Income Tax Rate: 1.75% (as of 2015).

    • How to File Return: 

  • Returns must be snail-mailed (you may be able to fax; if this is possible then you’ll want to include request for confirmation via email). 

  • Tax payments must be snail-mailed. 

  • Recommend you pay next year’s tax payments in advance, in one lump sum to avoid hassle of making 4 quarterly payments (and accidently missing a payment). 

  • Recommend you pay a little more than you think you owe to avoid fees/taxes later on. 

    • Other: Reporting Requirements on Tenants – Respond if asked for information. 

 

        • NO CITY:

    • Some properties may be in no city limits, i.e.:

    • Village of Indian Springs.

    • Fairfield Township. 

    • Areas of Hamilton city.

 

        • TRENTON CITY:

    • Website here; Phone: (513) 428-0158.

    • Income Tax Rate: 1.5% (as of 2015).

 

 

        • WARREN COUNTY:

 

        • FRANKLIN CITY:

    • Website here; Phone: (937) 746-9921; Fax: (937) 746-1136. (A helpful POC to speak to is: Jenny (head of Income Tax Dept.). 

    • Income Tax Rate: 2% (as of 2015).

    • How to File Return: 

  • Returns and payments can be submitted online or snail-mailed. If submitting online, must do the following to ensure the system doesn’t mark you as a foreigner. In section that asks if all your income/expenses were exclusively in OH, select “yes.”

  • Recommend you pay next year’s tax payments in advance, in one lump sum to avoid hassle of making 4 quarterly payments (and accidently missing a payment). 

  • Recommend you pay a little more than you think you owe to avoid fees/taxes later on. 

    • Other: Tenant Reporting Requirements - Inform city when there is new tenant/lease or vacate within 30 days of change. For more information, contact chedric@franklinohio.org and/or POCs found here. 

 

  • KEEP COPIES:

 

    • Keep digital copies of all documentation in case you get audited. (See Prepare for Audits section).

 

    • Use certified mail with return receipts so that you have proof of when you mailed the returns and proof that they were received. 

 

top of page

 

 

  • Manage Property Taxes

 

  • How to keep your address private & ensure that OH county mail goes to Missy’s team rather than you.

    • You can use Missy’s team address so that prying eyes cannot search for your address associated with you as the property owner. Work with them and/or the county treasurer’s office to change the address to: 3189 Princeton Road #298, Hamilton, OH 45011

 

  • How to pay taxes:

    • You should not need to actively make any property tax payments, as these are usually paid automatically. If you have a loan, property taxes are paid through escrow (escrow, usually includes property taxes, hazard insurance and mortgage insurance) through your mortgage lender. 

    • If you do not have a loan and therefore taxes are not paid through the lender, you can ask the property management company to pay property taxes on your behalf and include the amount paid on your property management monthly owner’s statements and end-of-year statement. 

 

  • How to get copies of property tax statements:

    • The OH county tax assessor/treasurer office sends you hard copies of statements in the mail.

    • The OH county tax assessor/treasurer office has statements online, which you can download. 

    • The property management company uploads copies to your Owner portal (“Document” section), which you can download. The property management company usually sends you a letter as well. For an example to download, click here. 

 

  • How to deduct property tax when paying end-of-year taxes:

    • For property tax documentation required to submit taxes at the end of the tax year, see “Pay Taxes section. 

 

  • Good news:

    • The property management company actively protests property tax rates for you on your behalf to ensure you are charged the lowest property rates possible. 

 

  • COUNTY DETAILS:

 

  • BUTLER COUNTY PROPERTY ASSESSOR /TREASURER: 

    • Butler County (www.butlercountytreasurer.org) - Includes cities of Hamilton, Middletown, Fairfield, Trenton, Monroe, the Village of New Miami, West Chester Township, Fairfield Township, and Liberty Township. Online versions of the first-half property tax bills available mid Jan. The tentative tax bill mailing date is early Feb and the tentative due date is late Feb.

    • Phone: (513) 887-3181

    • Fax: 513-887-3172 

 

  • WARREN COUNTY PROPERTY ASSESSOR /TREASURER: 

    • Warren County (www.co.warren.oh.us/treasurer/) - Includes cities of Franklin, Mason, Springboro, and Lebanon. Tax information is available online. First half tax bills are mailed mid Jan, are due late Feb.

    • Phone: Treasurer 513-695-1300, Auditor 513-695-1235

    • Fax: 513-695-2921

    • Email: jaumann@co.warren.oh.us; other: Nancy.Lamb@warrencountyprosecutor.com

 

  • HAMILTON COUNTY PROPERTY ASSESSOR /TREASURER: 

 

    • Hamilton County - Includes cities of Cincinnati and Springdale. Tax information is available online mid Jan. First half tax bills mailed early Jan and are due late Jan/early Feb. 

 

top of page

 

 

  • Manage Property Insurance

 

 

  • Ensure that your property insurance is getting paid as required. 

 

  • Caveat: 

    • Your Mortgage Bank may receive your property insurance payments (as part of escrow). 

    • To reconcile this, see Manage Loan section under Get Loan section.

 

top of page

 

 

  • Prepare for Audits

 

  • You can be audited by the federal government, state government, city governments, and/or your mortgage loan company. 

 

  • Be prepared by having all documentation in advance and ensuring you followed tax filing steps correctly. See Keep Good Documentation and Pay Taxes sections. 

 

top of page

 

 

  • Manage Loan

 

 

top of page

 

 

  • Setup Calendar Reminders

 

  • Set up yearly calendar reminders for important tasks, i.e. 

 

 

 

top of page

 

 

  • Adjust Escrow

  

  • If you receive an escrow adjustment statement from your mortgage bank, make adjustments as required. You will need to adjust monthly payments to your mortgage company. Note that the overall payment to your mortgage company includes principal, interest and escrow (property taxes and hazard insurance). Your adjustments will be for a change in taxes and/or insurance. 

 

  • To make changes, login to your mortgage account and adjust your monthly payments accordingly. Do this by the deadline on the statement you received!

 

  • Note: If your escrow was excessive, a check may be in included for you to cash.

 

top of page

 

 

  • Schedule Routine Inspections

 

  • Schedule routine inspections, i.e. termite inspections, with your property management company. 

 

top of page

 

 

  • Inform New Address

  

  • IMPORTANT:

 

    • Keep all applicable parties updated on your latest address. Snail mail is unavoidable with many government entities. 

    • If you don’t update your address, you may lose money and/or get into legal trouble. (I.e., you might not receive escrow overage checks from your mortgage company, and/or face fees and additional taxes if tax information does not reach you. 

 

  • HOW:

 

    • Use a “change address” checklist. For a template, ask author of this document. 

 

top of page