If it is not broke...

[Stephanie D.]

Hi -

I have four rental duplexes - one in Northeast Philadelphia and three in Delaware county.  My tenants in Philadelphia have always been late on the rent and keep the property in a nasty condition.  These are the main reasons why I am leery of purchasing another rental property in Philly.  However, I would like to invest in another property since the real estate market is improving.

My tenants in Delaware county pay their rent on time and keep the property in decent condition. I have no issues finding quality tenants in Delaware county.  The main problem I have with this area is the property taxes.  They are increasing over 4% each year.  My property taxes are 45% of my total monthly mortgage.  I am looking to purchase another property, but I am concerned with having majority of my rental in one township.  I think it's best to diversify my book of rentals.  I mean, what if Delaware county decides to significantly increase their property taxes? This would drastically affect my finances. 

Am I thinking too deep or should I just purchase the property and stop worrying about things outside of my control? I would appreciate any input!

Thanks,

[John Knisely]

Originally posted by @Stephanie D.:

Hi -

I have four rental duplexes - one in Northeast Philadelphia and three in Delaware county.  My tenants in Philadelphia have always been late on the rent and keep the property in a nasty condition.  These are the main reasons why I am leery of purchasing another rental property in Philly.  However, I would like to invest in another property since the real estate market is improving.

My tenants in Delaware county pay their rent on time and keep the property in decent condition. I have no issues finding quality tenants in Delaware county.  The main problem I have with this area is the property taxes.  They are increasing over 4% each year.  My property taxes are 45% of my total monthly mortgage.  I am looking to purchase another property, but I am concerned with having majority of my rental in one township.  I think it's best to diversify my book of rentals.  I mean, what if Delaware county decides to significantly increase their property taxes? This would drastically affect my finances. 

Am I thinking too deep or should I just purchase the property and stop worrying about things outside of my control? I would appreciate any input!

Thanks,

 Delaware county actually does have a countywide tax reassessment planned for 2020. Its been said that it will create "winners and losers", so if your taxes are high right now, there's a good chance that they will decrease.

"A reassessment will distribute the tax burden more fairly, but it will create winners and losers. Local governments may not use reassessments to raise more money through taxes. An analysis of the most recently available state tax data showed that roughly 37 percent of Delaware County properties are overassessed. The county council also approved a contract for a company to take aerial photographs to use in the reassessment. The photographs will be compared to building permits and other existing information about the properties. In some cases, assessors will go door-to-door. Delaware County property owners are slated to receive notice of their new assessments in 2020, and they will be able to file appeals before they are taxed on the new assessment in 2021."

More info: http://www.philly.com/philly/news/pennsylvania/del...