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Updated almost 3 years ago on . Most recent reply
Spike in property taxes
Hello,
I'm new to real estate investing but took the leap and bought a duplex where I occupy one unit and rent out the other unit. While living in one unit of the property, the tenant pays $1500, and the PITI is $2100, so my monthly out of pocket is not much. My plan was to eventually move out and rent the unit I currently live in. This would give me a monthly cashflow of about $900. Then the trouble began...
I was recently notified by the town that my property taxes are doubling ($5,000 to $10,000)! When I asked the town about this, they said it was because there were a lot of renovations done to the house before I bought it and they are just getting around to assessing the new value of the house. This kills any cash flow I might have had, even if I rent out both units! I will obviously appeal the new assessment, but I'm not sure if I will win.
Has this happened to anyone before? Any suggestions on how I can still mangage some cash flow in the property? I almost feel like why bother to make improvements to the house if the tax assessor will come around, increase the taxes and make it so that you can't afford it!
I'm new to real estate investing but took the leap and bought a duplex where I occupy one unit and rent out the other unit. While living in one unit of the property, the tenant pays $1500, and the PITI is $2100, so my monthly out of pocket is not much. My plan was to eventually move out and rent the unit I currently live in. This would give me a monthly cashflow of about $900. Then the trouble began...
I was recently notified by the town that my property taxes are doubling ($5,000 to $10,000)! When I asked the town about this, they said it was because there were a lot of renovations done to the house before I bought it and they are just getting around to assessing the new value of the house. This kills any cash flow I might have had, even if I rent out both units! I will obviously appeal the new assessment, but I'm not sure if I will win.
Has this happened to anyone before? Any suggestions on how I can still mangage some cash flow in the property? I almost feel like why bother to make improvements to the house if the tax assessor will come around, increase the taxes and make it so that you can't afford it!
Most Popular Reply
Is this not assessed at market value? Their permits will show the reno values, which you should be able to access.