Rental Property Investor · Indianapolis, IN · Member since 2014 · 354 posts · 167 votes
10y
@Brendin Wood In my experience in Indiana, taxes are 1 year in arrear. So the time you own the property will have the taxes due next year. The taxes are prorated on closing. When you purchase, you should receive the taxes from the seller for the previous year (not yet paid) and for the current year up to the purchase date. On the sell, you would pay the taxes to the buyer for the current year up to the date of sale (includes $ you obtained in the purchase). Hope this makes sense. Note that this is experience and not intended to be legal advice.
For insurance, there are companies that specialize in short-term, unoccupied properties. These policies cover the rehab time period and can usually be paid month to month.
Investor · Indianapolis, IN · Member since 2015 · 393 posts · 116 votes
10y
@Brendin Wood
What said is correct. When the buy the property, odds are the seller is going to credit you the taxes up to the day of closing. Taxes are paid in May and November of every year, and the taxes paid in May cover the first 6 months of the PREVIOUS year, and the taxes paid in November cover the last 6 months of the previous year. So let's say you close in February- the seller will be crediting you a year plus two months of taxes (the previous year's taxes, plus January and February).
When you go sell yourself, the same thing will happen, except the roles will be reversed. You will be the one crediting the buyer prorated taxes for the time you owned the property.
Hope I made sense and it wasn't too confusing!
EDIT: DO NOTE THAT THIS IS HOW IT WORKS IN INDIANA. YOU WOULD HAVE TO CHECK FOR YOUR STATE.