Kentucky vs Ohio for new investor

Multi-Family and Apartment Investing
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Kentucky vs Ohio for new investor

Steven Bays
Cincinnati, OH · Member since 2013 · 78 posts · 1 vote

I live in in close proximity to Northern Kentucky and have an interest in investing in Cincinnati and Kentucky. Is there a strong deterrent from investing Kentucky or any strong differences between the two states especially for my first investment rental? The point I am getting to is if Kentucky is landlord friendly or should I wait until I have a couple under my belt before moving across the river. @James Vermillion to weight in. Thanks!

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Engelo RumoraBusiness Member
Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
12y

Loving the market in Ohio at the moment.

Toledo, Columbus, Cincinnati, Cleveland, Dayton.

Some cheap property available in solid B class areas.

Very undervalued in my opinion.

Thanks

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  • Michael Seeker
    Investor · Louisville, KY · Member since 2011 · 1k+ posts · 1k+ votes
    12y

    I haven't found KY particularly landlord unfriendly. I'd say you should worry more about being a friendly landlord than finding somewhere that is landlord friendly. I don't mean being friends with your tenants, but be a great landlord and you shouldn't have many problems.

    That doesn't really help your original question on whether KY or OH is better from a legal standpoint. I'd focus more on the numbers though. Can you find better deals in KY or OH or where can you find the best deals that you want to invest in?

    1Reply
  • Engelo RumoraBusiness Member
    Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
    12y

    Loving the market in Ohio at the moment.

    Toledo, Columbus, Cincinnati, Cleveland, Dayton.

    Some cheap property available in solid B class areas.

    Very undervalued in my opinion.

    Thanks

    Podcast Guest on Show #89
    Oz Realty4.5369 Reviews
    WebsiteView Page
    2Reply
  • Christian CarsonPro Member
    Cleveland, OH · Member since 2011 · 400 posts · 223 votes
    12y

    Ohio is pretty landlord-friendly for one specific reason: with few exceptions, withholding rent is never a remedy for a tenant. If a tenant complains of code violations, he/she MUST deposit the rent in escrow with the county clerk, or the landlord can evict. Interestingly, very few tenants know about this law.

    2Reply
  • Steven Bays
    OP
    Cincinnati, OH · Member since 2013 · 78 posts · 1 vote
    12y
    That is interesting. My question being is if there is any degree of difficulty with Kentucky? There are some favorable spots in both and being able to utilize both states would be great. I had a couple tell me if was more tenant friendly which made me pose the question. Thanks!
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  • James Vermillion
    Lexington, KY · Member since 2009 · 2k+ posts · 1k+ votes
    12y

    Steven, my apologies for the delay in responding, I have been swamped lately! Ky is a pretty landlord friendly state in my opinion, and I have not had a single legal issue (knock on wood)! My advice would be to go with the best investments and properties, worrying less about the laws. Not to say that you should not understand or even consider the laws, but laws can change and in most cases (except for a few states that are on either extreme) you will do great by getting great deals on properties and managing those properties in a great way. Good luck!

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  • Matthew Miller
    Fort Thomas, KY · Member since 2014 · 7 posts · 3 votes
    12y
    Happy to see you all talking about kentucky. As I want to start in northern kentucky soon. I was wondering some of these same issues.
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  • Clay SmithBusiness Member
    Investor · Louisville, KY · Member since 2013 · 419 posts · 244 votes
    12y

    I can not think of any KY specific legal issues you need to know. However, as a landlord you should be well aware of that

    1. IF a lawyer can prove you know a dog is on your rental property AND it bites ANYONE, you will be named in the lawsuit.
    2. Landlording on Autopilot written by Mike Butler would be a good read. He is from Louisville, KY and talks very specific about KY law. He also offers services for landlords, such as handling evictions for you (http://vistaservicegroup.com/). When evicting tenants he has very straight forward advise. For example,
      • Must have 5 people onsite for the sit out
      • Cannot take partial payments
    3. Start an LLC, it will protect you from lawsuits. When do you need one? If you have little to no start up money then maybe after your first deal...otherwise, get one started now. It takes months for paperwork to clear, open bank accounts, get business cards, secure a website, etc.
    LREI Property Management LLC4.6453 Reviews
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  • Stephen McCauley
    Investor · Louisville, KY · Member since 2014 · 30 posts · 3 votes
    12y
    Should you ever take partial payments? What are the pros and cons?
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  • Michael Seeker
    Investor · Louisville, KY · Member since 2011 · 1k+ posts · 1k+ votes
    12y
    Originally posted by @Stephen McCauley:
    Should you ever take partial payments? What are the pros and cons?

    The easy answer is "no". However, if you really want to deal with that or there is an extenuating circumstance where you feel there is a need you should absolutely get the "payment plan" in writing and include in there that failure to meet this new temporary agreement is considered a nonpayment of rent and could result in eviction. I would also include corresponding late fees and make sure that they are 100% caught up within a short amount of time.

    One of my experiences early on was with a tenant who could only pay $X until her student aid check came in. The next month was she could only pay $Y until she found a new roommate (subletting was not allowed mind you, but I went along with it). I worked with her time after time, and the end result was a lot of headaches, a lot of lost money and an eviction filing. I could have avoided most of the headaches and some of the lost money and gotten a new tenant in there had I just said no to the first partial payment. It's usually a slippery slope!

    1Reply
  • Ali Boone
    Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
    12y

    Normally I'd say KY is better but it depends on where you would invest in both. Buying in a lower-quality area of KY wouldn't be better than a bigger city in Ohio. I would say in general though KY is more stable than a lot of the Ohio markets. Some of the Ohio markets are ranked some of the worst places to buy (despite people buying like crazy there).

    Don't base your decision on where you are buying, base it on the quality of the deal. If you buy in a tenant-friendly state, just buy rent insurance to cover it and you'll be fine. I don't think either of those are though.

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