My Experience Investing in Columbus OH.

My Experience Investing in Columbus OH.

Saleh RiaziPro Member
Investor · San Jose · Member since 2018 · 47 posts · 65 votes

Hello BP community, 

I thought to share a few of my experiences investing in Columbus Ohio. 

1. The Tax will increase immediately after you buy a property to match the purchase price and you are also responsible for the difference for the years that you didn't even own the property.

I purchased my first property back in Jun of 2020. It was a pretty beaten up Duplex in an area of the town that I was told it is a "C" neighborhood by a local RE agent. The tax on the property was less than $800 but I did my underwriting using the asking price which placed the tax at $1700. Immediately and in less than 3 months after closing I received a letter from BOR, Columbus Board of Revision which reassessed my taxes and increased it to match the purchase price. But that was not the issue until I learned that I am now responsible for the difference for the 2019 and part of 2020 that i didn't even own the property. I contacted a local attorney who is very knowledgeable about this and he helped me understand that this is a Columbus law.  

2. Cash out refi: When you cash out refi the property, the BOR will most likely increase the tax to match your appraised value. So make sure you calculate the tax using ARV and not the purchase price.

3. Make sure you do a through research on the neighborhood and don't just take any "RE Agent" word for it. Otherwise you will learn this a hard way that somebody's "C" neighborhood is really a  "F" neighborhood. 

4. Make sure to find a good property manager who manages your type of property before you purchase, or have enough cash to cover the consequences of it. 

I had my fair share of bad experiences with Columbus PMs and want to make sure every investors here find a good PM before starting your investing journey in Columbus. And yes I did interview them and asked them all the right questions. Just didn't do a reference check, maybe that is the key. 

Be well and don't overpay for a property just to own one my friends. 

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Realtor · Oakland, CA and a Real Estate Investor with Multi-Family Units and a Self Storage Facility · Member since 2016 · 2k+ posts · 2k+ votes
4y

It happens more often than you think Saleh. I was born in Columbus. I have some stuff out there and in Cleveland. When people reach out to me about investing out there the first thing I ask is when are you planing on flying out there for the first time. If the answer is, "Oh I already have a guy out there or boots on the gound out there so I won't need to" then it ends up being avery short conversation. I have family in Columbus and I still flew out there. 

Even though I was living in Oakland, California at the time this is what I did

I interviewed agents that had multiple listings of duplexes, triplexes and fourplexes because they are used to working with investors and they also know who the good PMs and contractors are. 

I also made sure that they themselves also owned rentals in the areas I was interested in. 

Finally, I flew out there multiple times and walked areas BEFORE buying. 

See this reply in the discussion

31 Replies

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  • Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    4y
    Originally posted by @Saleh Riazi:

    Hello BP community, 

    I thought to share a few of my experiences investing in Columbus Ohio. 

    1. The Tax will increase immediately after you buy a property to match the purchase price and you are also responsible for the difference for the years that you didn't even own the property.

    I purchased my first property back in Jun of 2020. It was a pretty beaten up Duplex in an area of the town that I was told it is a "C" neighborhood by a local RE agent. The tax on the property was less than $800 but I did my underwriting using the asking price which placed the tax at $1700. Immediately and in less than 3 months after closing I received a letter from BOR, Columbus Board of Revision which reassessed my taxes and increased it to match the purchase price. But that was not the issue until I learned that I am now responsible for the difference for the 2019 and part of 2020 that i didn't even own the property. I contacted a local attorney who is very knowledgeable about this and he helped me understand that this is a Columbus law.  

    2. Cash out refi: When you cash out refi the property, the BOR will most likely increase the tax to match your appraised value. So make sure you calculate the tax using ARV and not the purchase price.

    3. Make sure you do a through research on the neighborhood and don't just take any "RE Agent" word for it. Otherwise you will learn this a hard way that somebody's "C" neighborhood is really a  "F" neighborhood. 

    4. Make sure to find a good property manager who manages your type of property before you purchase, or have enough cash to cover the consequences of it. 

    I had my fair share of bad experiences with Columbus PMs and want to make sure every investors here find a good PM before starting your investing journey in Columbus. And yes I did interview them and asked them all the right questions. Just didn't do a reference check, maybe that is the key. 

    Be well and don't overpay for a property just to own one my friends. 

    Good information.   Sorry you faced this.  Appreciate you sharing your experience. 

  • Real Estate Broker · Redwood City, CA · Member since 2014 · 679 posts · 888 votes
    4y

    I lived in Columbus for 5 years, many years ago. The good neighborhood, area around OSU, upper Arlington, Dublin, etc, are pretty expansive now. Their price point is similar to east Bay Area.

    Linden, a definitely F area, somehow was touted as a b/c area by TK providers. If you never lived in the city, do not invest there. 

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

    I lived in Columbus for 5 years, many years ago. The good neighborhood, area around OSU, upper Arlington, Dublin, etc, are pretty expansive now. Their price point is similar to east Bay Area.

    Linden, a definitely F area, somehow was touted as a b/c area by TK providers. If you never lived in the city, do not invest there. 

     I find it extremely difficult to give letter grades to an area. If you ask 5 different people their opinion of an area, anywhere they are going to give you 5 different answers.

    I own a duplex and am in contract to purchase a 4 unit in the Linden area. I would consider the area that I am purchasing a B area. My south Linden rating would be a C- to a C plus.

    The rapid appreciation of Columbus, Ohio also makes it hard to stay consistent with the letter grades. Parts of Southern Orchards have gone from a D to an A area in less than 5 years.

  • Joe S.Pro Member
    Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
    4y
    Originally posted by @Saleh Riazi:

    Hello BP community, 

    I thought to share a few of my experiences investing in Columbus Ohio. 

    1. The Tax will increase immediately after you buy a property to match the purchase price and you are also responsible for the difference for the years that you didn't even own the property.

    I purchased my first property back in Jun of 2020. It was a pretty beaten up Duplex in an area of the town that I was told it is a "C" neighborhood by a local RE agent. The tax on the property was less than $800 but I did my underwriting using the asking price which placed the tax at $1700. Immediately and in less than 3 months after closing I received a letter from BOR, Columbus Board of Revision which reassessed my taxes and increased it to match the purchase price. But that was not the issue until I learned that I am now responsible for the difference for the 2019 and part of 2020 that i didn't even own the property. I contacted a local attorney who is very knowledgeable about this and he helped me understand that this is a Columbus law.  

    2. Cash out refi: When you cash out refi the property, the BOR will most likely increase the tax to match your appraised value. So make sure you calculate the tax using ARV and not the purchase price.

    3. Make sure you do a through research on the neighborhood and don't just take any "RE Agent" word for it. Otherwise you will learn this a hard way that somebody's "C" neighborhood is really a  "F" neighborhood. 

    4. Make sure to find a good property manager who manages your type of property before you purchase, or have enough cash to cover the consequences of it. 

    I had my fair share of bad experiences with Columbus PMs and want to make sure every investors here find a good PM before starting your investing journey in Columbus. And yes I did interview them and asked them all the right questions. Just didn't do a reference check, maybe that is the key. 

    Be well and don't overpay for a property just to own one my friends. 

    Your post makes me want to run out and buy about 10 there… Or NOT.

  • Jonathan StyerBusiness Member
    Real Estate Broker · Columbus, OH · Member since 2018 · 330 posts · 396 votes
    4y
    Originally posted by @Remington Lyman:
    Originally posted by @David Song:

    I lived in Columbus for 5 years, many years ago. The good neighborhood, area around OSU, upper Arlington, Dublin, etc, are pretty expansive now. Their price point is similar to east Bay Area.

    Linden, a definitely F area, somehow was touted as a b/c area by TK providers. If you never lived in the city, do not invest there. 

     I find it extremely difficult to give letter grades to an area. If you ask 5 different people their opinion of an area, anywhere they are going to give you 5 different answers.

    I own a duplex and am in contract to purchase a 4 unit in the Linden area. I would consider the area that I am purchasing a B area. My south Linden rating would be a C- to a C plus.

    The rapid appreciation of Columbus, Ohio also makes it hard to stay consistent with the letter grades. Parts of Southern Orchards have gone from a D to an A area in less than 5 years.

    Everyone's opinion is different for sure. Even to just use a blanket "Linden" to describe the neighborhood does not really allow for the nuance of the area. South Linden, North Linden and East Linden are all very different in my opinion. For me, I like to invest in North Linden and don't look South of Hudson but that's because that area works best for my specific strategy. I think East Linden is a nicer area overall. I would say South Linden is a D. 

    David's opinion of Linden as an F area may have been true when he lived here but I would not agree with that at all anymore. 

    Styer Real Estate Professionals4.941 Reviews
  • Realtor · Oakland, CA and a Real Estate Investor with Multi-Family Units and a Self Storage Facility · Member since 2016 · 2k+ posts · 2k+ votes
    4y

    It happens more often than you think Saleh. I was born in Columbus. I have some stuff out there and in Cleveland. When people reach out to me about investing out there the first thing I ask is when are you planing on flying out there for the first time. If the answer is, "Oh I already have a guy out there or boots on the gound out there so I won't need to" then it ends up being avery short conversation. I have family in Columbus and I still flew out there. 

    Even though I was living in Oakland, California at the time this is what I did

    I interviewed agents that had multiple listings of duplexes, triplexes and fourplexes because they are used to working with investors and they also know who the good PMs and contractors are. 

    I also made sure that they themselves also owned rentals in the areas I was interested in. 

    Finally, I flew out there multiple times and walked areas BEFORE buying. 

  • Real Estate Broker · Redwood City, CA · Member since 2014 · 679 posts · 888 votes
    4y
    Originally posted by @Remington Lyman:
    Originally posted by @David Song:

    I lived in Columbus for 5 years, many years ago. The good neighborhood, area around OSU, upper Arlington, Dublin, etc, are pretty expansive now. Their price point is similar to east Bay Area.

    Linden, a definitely F area, somehow was touted as a b/c area by TK providers. If you never lived in the city, do not invest there. 

     I find it extremely difficult to give letter grades to an area. If you ask 5 different people their opinion of an area, anywhere they are going to give you 5 different answers.

    I own a duplex and am in contract to purchase a 4 unit in the Linden area. I would consider the area that I am purchasing a B area. My south Linden rating would be a C- to a C plus.

    The rapid appreciation of Columbus, Ohio also makes it hard to stay consistent with the letter grades. Parts of Southern Orchards have gone from a D to an A area in less than 5 years.

     I have not been back to Columbus for 20 years now. Pretty sure there will be some changes. 
    Columbus is probably the best city to invest in Midwest area. But I will not invest in Linden, even if it changed.

    The main tenant pool in Columbus is the student population around OSU. Therefore, I was looking at the area east of high street directly across from OSU, the university village area north of campus. In the last few years, their prices has appreciated quite a bit. 
    couple years ago, there was an apartment building for sale in the university village area. I called the listing agent and did some due diligence. Did not move forward simply being lazy.

    Now, I can not find any commercial property around OSU at a reasonable cap. 

    If I am living in Columbus, I will just buy directly across high street for some old houses. Those are the real investment properties in Columbus. Their value will keep moving up. 

  • Real Estate Agent · Columbus, OH · Member since 2021 · 98 posts · 101 votes
    4y

    @Saleh Riazi Everyone in Columbus has their own opinions on each neighborhood/pockets. Do your own due diligence and build your own trustworthy relationships moving forward. I have investors that love to buy slums (section 8), Areas like Franklinton/Hilltop/South Linden. Then there are investors that love Airbnb's such as Clintonville, Short North, Campus, etc. As @Remington Lyman said, Columbus is appreciating rapidly and classifying neighborhoods is completely opinion based. It just depends on your investment strategy.

  • Saleh RiaziPro Member
    OP
    Investor · San Jose · Member since 2018 · 47 posts · 65 votes
    4y

    Great points. I agree with all of you and that is exactly what I said... " Make sure you do a through research on the neighborhood and don't just take any "RE Agent" word for it."

    @Brian Garlington, I actually do travel to Columbus myself a few times a year at least. But until you live in the area traveling there wouldn't give you a best understanding of different neighborhoods. That is where finding some local honest people can be very helpful. Never the less, I agree that you need to physically be there and check on your investments. 

    @David Song @Jonathan Styergood tips, appreciate the input. 

  • Marc RiceBusiness Member
    Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2018 · 2k+ posts · 1k+ votes
    4y

    Having a good agent on your team will help to mitigate a lot of risk.

    Marc Rice | Investor Friendly Agent at Reafco Tailwind Team574 Reviews
  • Investor · CA · Member since 2021 · 11 posts · 5 votes
    4y

    Terrifying post. Good info for newbies like me to keep in mind especially knowing I will be using a PM. Thanks for sharing!

  • Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
    4y
    Originally posted by @Saleh Riazi:

    Great points. I agree with all of you and that is exactly what I said... " Make sure you do a through research on the neighborhood and don't just take any "RE Agent" word for it."

    @Brian Garlington, I actually do travel to Columbus myself a few times a year at least. But until you live in the area traveling there wouldn't give you a best understanding of different neighborhoods. That is where finding some local honest people can be very helpful. Never the less, I agree that you need to physically be there and check on your investments. 

    @David Song @Jonathan Styergood tips, appreciate the input. 

    We were in Columbus over the summer to see what neighborhoods we'd invest in. It was useful being there and driving the neighborhoods to get a feel for things. 

    I'd suggest if you can't drive the neighborhoods, you go to youtube and type in "Driving the hood in Columbus" or something similar. Several local people have posted drive arounds with personal commentaries. I saw one where the guy drove from intersection to intersection and identified where various of his relatives was shot. Left me warm and fuzzy that he'd share such personal info and he seemed like a nice guy if you can undestand the lingo. But, it gave me a feel of what to expect in the neighborhoods he drove. 

  • Saleh RiaziPro Member
    OP
    Investor · San Jose · Member since 2018 · 47 posts · 65 votes
    4y

    @Account Closed, I didn't mean to scare anybody away from Columbus but rather provide some factors to be aware and cautious of.  Message me if you have any questions, and be happy to chat.


    @Account Closed, great information. Thanks for sharing. 
     

  • Investor · Oakland, CA · Member since 2015 · 141 posts · 84 votes
    4y

    @

    Saleh Riazi  So now that you've learned your lesson ... how about listing your choices for a PM!!! 

    Also how about listing the best areas. Lets not just post without leaving the secrets to getting the possible deal in the best possible areas. No need for all of us to learn the hard way when you guys have figured it all out. Traveling to an area cost money ... how many times can a person do that if they want to own across America? 

    Why Columbus, OH in the first place??? 

    Thanks 

  • Investor · Oakland, CA · Member since 2015 · 141 posts · 84 votes
    4y
    YEARPROPERTY TAXESCHANGETAX ASSESSMENTCHANGE
    2020$3,458-44.936%$104,16024.982%
    2019$6,280100%$83,340--
    2018$3,140-45.797%$83,340--
    2017$5,793-20.622%$83,340-15.477%
    2016$7,29898.747%$98,600--
    2015$3,672--$98,600
  • Investor · Oakland, CA · Member since 2015 · 141 posts · 84 votes
    4y

    I just posted the taxes on a Duplex in Columbus, Oh. For 5481 Archway Dr. 43235. Using Trulia it shows a 

    very low crime area. Using city-data (dot) com for AC 43235 I can see the area is 80% white. That corresponds 

    with Trulia low crime. I can use Google to walk the streets.  

    The only real question is why the crazy tax fluctuations??? I can call and get that info from the city. 

    You guys can tell me which PM to use ... why would I need to fly there?


  • New to Real Estate · Naples, FL · Member since 2021 · 3 posts · 5 votes
    4y

    Thank you for this insightful information.

  • Specialist · Toronto, Ontario · Member since 2012 · 2k+ posts · 891 votes
    4y

    Can you evict in Columbus OH now? or is there a memorandum?

  • Joshua JanusBusiness Member
    Realtor · Cleveland, OH · Member since 2021 · 1k+ posts · 1k+ votes
    4y
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    4y
    Originally posted by @Hai Loc:

    Can you evict in Columbus OH now? or is there a memorandum?

     Yes, you have always been able to evict. If you were evicting due to non-payment then the tenant would be advised to apply for impact and then the government would pay for any past rent, late fees, and three months ahead. Basically made bank during covid here in Columbus, Ohio

  • Specialist · Toronto, Ontario · Member since 2012 · 2k+ posts · 891 votes
    4y

    @Remington Lyman

    Since day 1?

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

    @Remington Lyman

    Since day 1?

     @Kyle Tom do you know the answer to this?

  • Saleh RiaziPro Member
    OP
    Investor · San Jose · Member since 2018 · 47 posts · 65 votes
    4y

    @Paul Merriwether, I can certainly share my experiences about PMs and agents to avoid.  PM me since I don't want to break any of the  Biggerpocket forum rules by posting any names . I also think it is a great idea to contact the city or better yet a tax attorney to get some insight on the taxes in the area, It could literally make a good deal a money loosing one. 

    @Hai Loc, yes you can evict in Columbus but just FYI, make sure in addition to the cost of the eviction court and attorney, you include up to 2-3 months of non-payment and the costs associated with the rent ready rehabs of the unit afterwards in your calculations.  Good luck. 

  • Culver City, CA · Member since 2017 · 9 posts · 2 votes
    4y

    How many years back are you required to pay the tax difference?   I’ve never heard of such a thing and don’t see anything online about this. 

  • Investor · Oakland, CA · Member since 2015 · 141 posts · 84 votes
    4y

    @Saleh Riazi Thanks for the info. Oh ... Intel building a plant north east of Columbus. 

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