When You Are Done Managing But Not Done Owning

Most landlords who have owned a building for twenty years do not wake up wanting to sell it. They wake up to a text about a dripping water heater, a lease that needs renewing, and a unit that has to be shown on the one Saturday they had free. What they are tired of is the job. The building itself is often still the best thing they own.

Those are two different problems, and they have different answers. Selling is one of them, and it is not always the right one. Here is how to think through the others first.

Separate the job from the asset

Owning a rental is a balance sheet. Managing it is a list of duties, and Ohio writes that list down. Ohio Revised Code 5321.04 requires a landlord to keep the premises fit and habitable, comply with building, housing, health and safety codes, keep common areas safe and sanitary, keep the electrical, plumbing, heating and supplied appliances in good working order, and supply running water, reasonable hot water and reasonable heat.

On top of that sits the day to day work the Ohio Division of Real Estate and Professional Licensing describes as property management: finding and screening tenants, advertising the unit, showing it, negotiating and approving leases, changing rent or terms, and collecting rent and security deposits.

Write down which of those you still enjoy and which ones you dread. Many owners discover they do not mind the repairs at all. It is the tenant turnover they cannot face again.

Option one: hire a licensed manager

The most common answer is handing the work to a professional. The state is specific about who that can be. The Division's guidance says you need a license "when, for another person and for a fee, you operate, manage, rent, or offer to do so any building or part of a building to the public." A handyman who collects rent for a percentage is doing licensed work, however informal the arrangement feels.

Before you sign, ask for the brokerage license and look it up with the Division. Then read the management agreement for four things: who holds the security deposits and in what account, how much the manager can spend on a repair without calling you, how either side ends the arrangement, and what report you get each month.

The deposit question matters more than it looks. Under Ohio Revised Code 5321.16, the thirty day deadline to return a deposit or itemize deductions applies no matter who is holding the money, and so does five percent interest on the portion above fifty dollars or one month's rent once a tenant has been in possession six months. Your tenants also have to know who they are dealing with, since Ohio Revised Code 5321.18 requires the rental agreement to disclose the name and address of the owner and of the owner's agent.

Option two: keep it in the family, carefully

Plenty of buildings in this county are run by a son who handles the showings and a daughter who keeps the books. The licensing rule turns on managing for another person and for a fee, and the Division's guidance lists an owner managing their own property and W-2 employees managing property owned by their employer among the people who do not need a license. If you want to pay a relative for their time, talk to an attorney about how that is set up before you start.

The step families most often skip is the power of attorney. Under Ohio Revised Code 1337.24, a power of attorney made under Ohio's current law is durable unless it says otherwise, so it keeps working if you become unable to act. Ohio Revised Code 1337.45 lets an agent with real property authority manage and conserve the property, insure it, pay the taxes, hire labor, make repairs, and lease or sell it. Without one, a family member helping out can collect rent right up until the day it matters most, and then have no authority at all.

Option three: decide who gets them, even if nothing changes today

Some owners are not tired so much as unsure what the buildings are for anymore. If the answer is "they are for the kids," Ohio gives you a simple tool. Under Ohio Revised Code 5302.22, an individual owner can record a transfer on death designation affidavit with the county recorder, and it has to be recorded before the owner's death to work. Ohio Revised Code 5302.23 says the beneficiary has no interest in the property until the owner dies, and the owner can revoke or change the designation at any time without the beneficiary's consent.

It does not hand off a single furnace call. What it does is turn a vague intention into a decision, and it lets you have the real conversation with your children about whether they actually want to be landlords.

Option four: sell one building, keep the rest

The choice is rarely all or nothing. An owner with three properties can often solve most of the headache by letting go of the one that generates most of the calls, usually the oldest, the one farthest away, or the one with the longest list of deferred repairs.

A building does not have to be emptied first. Leases stay with the property when it sells, and we walked through what changes at closing in selling a duplex with tenants still living in it. Talk to your accountant before you decide which building goes. The IRS taxes unrecaptured section 1250 gain, the depreciation you took over the years, at a maximum rate of twenty five percent, so the building you most want to let go of may not be the cheapest one to sell.

How to know which road is yours

A few honest questions sort most owners out. Do you still want the income, or mainly the relief? Is there someone in the family who wants this work, or are you assuming they do? If you were gone next year, would anyone know where the leases, the deposit ledger and the keys are? And is the building you dread the same one that earns the most?

None of this is legal or tax advice. It is a way to walk into your attorney's or accountant's office knowing what you want to ask.

Is it the buildings you are tired of, or just the phone calls?

If it is just the calls, one of the first three options may be all you need, and we would rather you keep a good building than sell it for the wrong reason. The Beatty family has owned and cared for rentals in Tuscarawas County for years, and you can read more about who we are.

If one property has become more trouble than it is worth, RCB Rentals buys occupied buildings as they are, tenants and leases in place. Ask for a no-obligation cash offer on that one building, and keep the rest as long as they serve you. No pressure either way.