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Updated about 10 years ago,

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2
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Bill Kennedy
  • South Burlington, VT
0
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Which states have the lowest tax burden for rental property owners?

Bill Kennedy
  • South Burlington, VT
Posted

I'm curious as to what states have the lowest tax burden for rental property owners - primarily once income tax and property taxes are factored in. At first I was looking at properties in Texas but was off-put once I discovered that the average property tax rate was over 1.5% of the home value, meaning that if you had a Class A building with only a 7% cap rate, that's 21% of your income out the window While there are no income taxes in Texas, if you're looking for relatively safe (ie low-mid range cap rate) properties it would seem that choosing a property in a state with lower property taxes and potentially higher income taxes would be more profitable in the long run.

Anyway, if anyone could help me figure out the states with lowest average tax burden assuming a 10% cap rate I would be greatly appreciative. Also, are there any states that are best for non-resident rental property owners?

Thanks!

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