Ohio is landlord-friendly because there is no legal limit on the security deposit a landlord may demand from a new tenant. There is no rent control, and only a three-day notice is necessary before starting the eviction process. Can we get a "woo hoo" from all the Ohio landlords and prospective landlords out there?

Before we dive into the details of what makes Ohio a great place to own residential rental property, let's get the bad news out of the way first.

Those Darn Buckeye Taxes

Ohio is known as the "buckeye" state because of the many buckeye trees found there, especially when the settlers first came to the territory in the late 18^th century. However, from a rental property owner's perspective, Ohio could be called a "black-eye" state due to its high property taxes.

Ohio property owners pay an average rate of 1.52% for annual property taxes. This amount is higher than the national average property tax rate of 0.99%. Ohio is the 9^th most expensive state in terms of property tax rates.

To make matters worse, SmartAsset says the average property tax rate in Cuyahoga County is 2.44%. Cleveland is in Cuyahoga County with a population of 1,264,8817 (2020 U.S. Census).

If you want a lower property tax rate, consider investing in rental property in Lawrence County. It has an average effective property tax rate of 0.87%. This rate is below the national average. However, only 58,240 people live in Lawrence County (2020 U.S. Census), so your rental property opportunities are fairly limited.

Landlord Tip: Property Taxes

The calculation by the state tax assessor of property taxes in Ohio uses 35% of the "true value." For detailed information on how this process works, download the government's report called Property Tax – Real Property.

Rule 5703-25-05 of the Ohio Administrative Code defines true value as the fair or current market value. This figure is the price the property would change hands from a willing seller to a willing buyer OR the price that the property did sell for within a reasonable time before or after the tax lien date (unless the property suffered some loss after the sale).

It pays for landlords in Ohio to challenge the assessed value if they disagree with the "true" valuation process used by the state tax collector, as there are multiple ways to make an appraisal.

Security Deposits

Here are the main considerations regarding Ohio security deposits.

There is no statewide limit on the security deposit a landlord can demand. However, there might be limits set by the county and municipal laws, so landlords need to check the local ordinances for these limitations.

If the security deposit is more than $50 and held for six months or longer, the landlord must pay the tenant interest on the deposit at the rate of 5% per year until the security deposit is refunded.

Within 30 days after a tenant moves out, landlords must return the security deposit along with an accounting statement for any deductions taken from the deposit.

Landlord Tip: Ohio Residential Lease Agreement

Make sure your Ohio residential lease agreement is clear about what repairs and cleaning are allowed deductions from a security deposit and what is considered normal wear and tear that is not deductible.

Rent Control

There is no rent control in the state of Ohio. Can we get another "woo hoo" from Ohio landlords? The only requirement is that a tenant receives notification in advance of any rental increase according to the terms and conditions stated in the Ohio residential lease agreement.

Landlord Tip: Earn Market Rent

There is no limit to raising the rent as allowed in the lease agreement and as high as the market will bear between tenants.

Throw Bad Tenants Out

Every landlord has to deal with bad tenants on occasion. Hopefully, not very often. Really bad tenants may try to stay as long as possible without paying the rent while potentially disturbing other tenants and wrecking the place.

If you have a bad tenant, you can quickly start official eviction proceedings. In Ohio, you can file a lawsuit for eviction after giving the tenant only three days' notice to remedy the situation.

If the tenant violates the terms and conditions of the Ohio residential lease agreement, you give them a three-day notice. If they continue violating the contract, you serve them with an eviction notice of the lawsuit filed with the court. The day you serve the notice does not count, nor do weekends or holidays, so a three-day notice may take up to five days to expire.

Landlord Tip: Eviction Requires Cause - Collect Evidence

Under Ohio law, you must have legal cause to evict someone. You cannot evict someone without reason. It is important to document your proof of the violations of the lease agreement with such things as a bounced rent check, photos of the damage, written statements of complaints made by other tenants, police reports, etc.

In Ohio, an average eviction takes about five weeks. After the three-day notice expires, you file a lawsuit to evict a tenant. Normally, the court will set a hearing date about two or three weeks later.

If the court grants the eviction, the tenant has five to ten days to vacate. After this period expires, if the tenant does not leave, you can get the court bailiff to remove the tenant physically.

Summary

Landlords like Ohio because they can set the rent at market rates with no rent controls, charge substantial security deposits, and evict bad tenants more easily than in other states.

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