Texas Property Tax Rates - A Tale of Two Cities

[Cary O.]

Everything is bigger in Texas, including the high property tax rates. While those of you considering real estate investing in Texas are aware of this fact, some of you may be less aware of the wide variance in property tax rates from city to city, let alone across the state. Texas property tax rates are generally comprised of the following: 1) County tax, 2) City Tax, 3) School District tax (ISD), 4) County hospital, if applicable,  5) community college, if applicable, 6) Special districts/MUD, if applicable. The School district (ISD) tax typically contributes to 50% or more of the overall property tax rate. Generally, the larger the city (Dallas, Fort Worth, Houston, Austin, etc), the higher the overall effective property tax rate.  Here is a comparison of the property taxes on a $200k property for 2 cities in the Dallas - Fort Worth area below.  Can you purchase cash flowing investment properties in both cities?

City A		City B
$4,080		$5,700
2.04%		2.85%

[Aaron F.]

I wonder about this with BRRRR too because when I use the BRRRR calculator, for the taxes I put in the tax rate for the ARV (so if the house is 200k to purchase and has $5500 in taxes but after rehab it would be assessed at ~300k for the refi, I would use 8250 as the annual taxes instead of 5500). Doing that makes deals super thin at a 70% cash-out refi. Maybe I'm doing analysis wrong but I figure it would be stressful to calculate $200/mo cash flow only to have a tax reassessment and have the taxes go up $230.