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Updated about 9 years ago, 11/02/2015
Where are the most ridiculously high RE taxes?
I am in the process of looking for some smaller multi-family properties (4 to 12 plex) to buy. In one of my "farm" areas in Iowa, anything over 3 units is typically taxed as commercial. Here are 2 examples of the cashflow-killing RE taxes being assessed here:
Deal 1: 4 plex, $2200 gross income, $110K asking price, tax assessed value of $149,500. The taxes on this property are $6,432 per year. Almost 6% of the asking price!
Deal 2: 6 plex, $3800 gross income, $230K asking price, tax assessed value of $262,500. Taxes are $11,292 per year. 5% of the purchase price.
I know there are some other pretty highly taxed areas out there (Texas? New Jersey?)... What are the highest rates around? Makes it pretty tough to buy anything that will cashflow when your taxes run almost 25% of your gross rents!