Has anyone bought properties with high property tax? Regret it?

[Rohan J.]

hey BP - I've been looking around in Ohio for smaller multis and apartment buildings, and while the rents can be great, the neighborhoods that I like just have property taxes. 

For example, I'm looking at 4plex in a B- neighborhood that is listed for $140k and rents for $2400/mo, but annual taxes are $6100 (4.4%!) . 

In my calculations, I'm just allotting $500/month of rent purely towards taxes, so that I can stay conservative and see if the numbers still work (so basically I'm running the numbers assuming I actually get $1900/month in rent). Anyways, something still feels uncomfortable about buying a property with this high rates, and I'm worried things could increase in the future.

Anyone have experience buying a property with 4%+ property tax, or do you just avoid those?

If you did buy it, did you regret it? 

Did you find a way to bring it down? Would love to hear everyones thoughts on this.

[Franco Li]

I've actually had this experience once. My first time investing, i didn't factor in the county/school tax in the area and was only looking at the local city tax, which was an additional $1000 per year. Ultimately the cash flow was still really good, but I did try to fight the county on the taxes - had a representative do a re-appraisal. At the end of the day, it still didn't matter because they gave every excuse to justify the tax $$ was correct.

After that, I typically am extremely conservative when I look at opportunities and do as much research as possible. When modeling these opportunities, I would use 5% of purchase price - even though it may not be realistic in different areas. 

Keep in mind please, that if you are buying the property at a premium to a prior sale - i.e. paying $100K vs previously sold at $60K - the taxes may actually increase, because the government may actually use your price as a justified appraisal value.