Columbus Ohio (Franklin County) Property Tax Question

Multi-Family and Apartment Investing
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Columbus Ohio (Franklin County) Property Tax Question

Mike Hsiao
San Diego · Member since 2021 · 24 posts · 5 votes

Hello All,

I'm currently looking for a multi-family property in the Columbus OH area. One thing that concerns me is the step up in property taxes being above 2%. This really hurts CoC returns, and wanted to see if there are any other options other than the below that I've found.

1. Finding a property with a long Tax abatement would be preferred. That solves the issue for a certain time.

2. "Drop and Swap". This is new to me, but sounds like a way to convey the property from one LLC to another, in order to keep the original property tax rate. Although there is NO guarantee this would be approved.

So just wanted to see if there are any other ideas, if any, to avoid the step up in property tax.  Or if anyone has any experience on the "Drop and Swap".   

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  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    4y
    Originally posted by @Mike Hsiao:

    Hello All,

    I'm currently looking for a multi-family property in the Columbus OH area. One thing that concerns me is the step up in property taxes being above 2%. This really hurts CoC returns, and wanted to see if there are any other options other than the below that I've found.

    1. Finding a property with a long Tax abatement would be preferred. That solves the issue for a certain time.

    2. "Drop and Swap". This is new to me, but sounds like a way to convey the property from one LLC to another, in order to keep the original property tax rate. Although there is NO guarantee this would be approved.

    So just wanted to see if there are any other ideas, if any, to avoid the step up in property tax.  Or if anyone has any experience on the "Drop and Swap".   

    I drop and swap all of the properties that I purchase with cash or commercial financing here in Columbus, Ohio. I do not want people to see what I purchased stuff for. It also gives you a good chance of not getting the tax step up.

    You cannot do this if you purchase with conventional financing. 

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  • Marc RiceBusiness Member
    Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2018 · 2k+ posts · 1k+ votes
    4y
    Quote from @Mike Hsiao:

    Hello All,

    I'm currently looking for a multi-family property in the Columbus OH area. One thing that concerns me is the step up in property taxes being above 2%. This really hurts CoC returns, and wanted to see if there are any other options other than the below that I've found.

    1. Finding a property with a long Tax abatement would be preferred. That solves the issue for a certain time.

    2. "Drop and Swap". This is new to me, but sounds like a way to convey the property from one LLC to another, in order to keep the original property tax rate. Although there is NO guarantee this would be approved.

    So just wanted to see if there are any other ideas, if any, to avoid the step up in property tax.  Or if anyone has any experience on the "Drop and Swap".   


    Tax Abatement is your safest route and you can sometimes even have sellers file a Phase 1 before you purchase the property and then file Phase 2. You'll just need receipts from the seller + new receipts, for the Phase 2 filing 

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