How Ohio Tax Sales Works and Why You Should Pay Attention

Ohio’s tax sale system offers a unique blend of tax deeds and tax liens, providing investors with diverse opportunities. Whether you’re seeking properties at steep discounts or earning significant returns through tax lien certificates, Ohio’s hybrid tax sale approach delivers substantial advantages. Here’s everything you need to know about how Ohio tax sales work and why you should pay attention to this lucrative investment strategy.

Overview of Ohio Tax Sales

Ohio is a hybrid state that offers tax lien certificates and tax deeds. Here’s a breakdown of what you need to know:

Tax Sale Type: Hybrid – Ohio offers both tax liens and tax deeds.

Bidding Process: The bidding process typically involves paying a premium over the base amount for tax deed and a bid-down method for tax liens

Sale Frequency: These sales are conducted annually throughout the year, depending on the county.

Interest Rate/Penalty: The interest rate for tax liens in Ohio is up to 18%, but this can be bid down during the auction process.

Redemption Period: Tax liens have a one-year redemption period, allowing the property owner to pay back taxes and interest to retain their property.

Online Auctions: Ohio does not currently conduct online tax lien or tax deed auctions.

Over-the-counter Sales: Over-the-counter purchases are not available in Ohio.

Relevant Statute: Ohio Revised Code Section 5721.30 governs these sales.

Unique Features of Ohio Tax Sales

Ohio’s tax sale system has some distinctive features that can be beneficial to investors:

Bulk Tax Lien Sales: In some Ohio counties, tax liens are sold in bulk rather than individually. This is particularly common in more populous areas. Bulk sales allow investors to purchase a large portfolio of liens at once, potentially yielding significant returns. However, this approach requires substantial capital and due diligence, as evaluating each property individually may not be feasible.

Tax Deed Sales via Sheriff’s Sales: Unlike many states that hold separate tax deed auctions, Ohio often integrates tax deed sales into county Sheriff’s Sales. These sales typically involve properties that have defaulted on taxes and may also include mortgage foreclosures. This unique approach provides a broader range of opportunities for real estate investors.

Delinquent Payment Plans: Ohio law allows property owners to enter into payment plans to pay off delinquent taxes. This can reduce the risk of foreclosure and offers a pathway for owners to retain their properties, which might affect the redemption rate of tax liens.

Why Choose to Invest in Ohio Tax Sales?

Population: Ohio is the 7th most populous state in the U.S., providing a large market for real estate investors.

Economic Significance: Ohio’s economy is diverse, with strong sectors in manufacturing, finance, and agriculture, which support a robust real estate market.

Historical Tidbit: Ohio has a long history of property tax laws dating back to its statehood in 1803, reflecting its deep-rooted systems in managing land and property.

Why Ohio Is Ideal for Tax Lien/Deed Investors

Ohio’s tax sales present a unique mix of high returns and manageable risks. The state’s large population and varied economic sectors create a stable environment for real estate investments. Additionally, the hybrid system offers flexibility, whether you’re interested in purchasing tax liens or acquiring properties through tax deed sales.

High Returns: With interest rates up to 18%, Ohio’s tax liens can offer significant returns compared to other investment types.

Diverse Opportunities: The integration of tax deed sales with Sheriff’s Sales means investors have access to a wide range of properties, from residential homes to commercial spaces.

Legal Protection: Ohio’s detailed statutory framework ensures transparency and fairness in the tax sale process, safeguarding investor interests.

Pro Tips for Investing in Ohio Tax Sales

Thorough Due Diligence: Always research the properties you’re interested in. This includes checking for any outstanding liens, property condition, and market value.

Understand the Auction Process: Each county in Ohio may have different procedures and rules. Make sure you’re familiar with the specifics before participating in an auction.

Prepare for Bulk Purchases: If you’re considering bulk tax lien purchases, ensure you have the capital and resources to manage a large portfolio of properties.

Ohio Tax Sales Frequently Asked Questions (FAQs)

Q: What is a tax lien certificate?
A: A tax lien certificate is a legal claim on a property for unpaid property taxes. The investor who buys the lien earns interest on the unpaid taxes.

Q: How does the redemption period work in Ohio?
A: After a tax lien is sold, the property owner has one year to pay the overdue taxes plus interest. If they fail to do so, the lien holder can initiate foreclosure proceedings.

Q: Can I participate in Ohio tax sales online?
A: No, Ohio currently does not offer online tax lien or tax deed auctions. The county conducts all sales in person.

Q: Do bulk tax lien purchases come with any risks?
A: Yes, bulk purchases can be risky due to the difficulty in evaluating each property individually. Some properties may be in poor condition or located in less desirable areas, which could impact your investment return.

Useful Links

Franklin County Law Library Guide on Tax Certificates
DannLaw’s Explanation of the Ohio Sheriff Sale Eviction Process

Ready to dive into Ohio’s tax lien and deed investing opportunities? Start by conducting thorough research and exploring available resources. For personalized guidance, book a consultation with Dustin Hahn today!

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