Meleneal Cameron
Contractor · Chicago, IL · Member since 2016 · 35 posts · 20 votes
9y
I have walked away, properties in certain areas in Illinois are like that... Where prices are extremely attractive but taxes too high. I've seen gorgeous dream homes in the low $100,000s with taxes between $8,000-$18,000 annually. I am open to possible solutions as to how buying something with taxes that high would work. But I don't see the opportunity in it.
3 Reply
Emily Powell
Investor · Houston, TX · Member since 2014 · 208 posts · 135 votes
9y
That's crazy! I have most definitely walked away from a property if the taxes were too high (although I've never seen a spread that wide). I actually stay away from certain counties because I know the taxes are higher than I prefer. If the numbers don't work, I don't see the point of making the purchase. Depending on what rents are in your area, if they're not going to cover your monthly...what's the point? It's not like a $50K house is going to appreciate to $500K and make the purchase worth your while. Just my two cents.
2 Reply
James Wise
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes
9y
& I thought Cleveland taxes were high.
4 Reply
Matthew Paul
Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
9y
Ouch , the only one making money is the government
1 Reply
Frank Schwarz
OP
Gila Bend, AZ · Member since 2017 · 38 posts · 14 votes
9y
Originally posted by @James Wise:

& I thought Cleveland taxes were high.
That was a Cleveland Property. LOL.
1 Reply
Lana G.
Escrow Officer · Ewing, NJ · Member since 2017 · 35 posts · 16 votes
9y
Sounds like parts of Jersey lol
5 Reply
Jason D.
Rental Property Investor · St. Petersburg, FL · Member since 2017 · 3k+ posts · 4k+ votes
9y
I frequently walk away from rental properties because of taxes. High taxes dont bother me as much if it's a flip
2 Reply
Michael Plante
Deland, FL · Member since 2017 · 2k+ posts · 1k+ votes
9y
Originally posted by @Frank Schwarz:

I was just looking at a property and was amazed that the property taxes are so high!
The house is on the MLS for $56,000 and the taxes are $6460 annually.
Checking past tax amounts showed that in 2011 they were $14,498 for a tax assessment of $41,100.
I can't believe this! I guess I've just lived in low-tax areas for too long.
I'm just running numbers but wanted to know if you have walked away from properties because the property taxes were so high.
If you saw that on the MLS, realtor dot com or Zillow you may want to check the county website to make sure
I found out the taxes for our house were listed much higher in the MLS, Zillow and realtor dot com than they really are
2 Reply
Frank Schwarz
OP
Gila Bend, AZ · Member since 2017 · 38 posts · 14 votes
9y
I'll check that out. I was just running number and really thought it would be a decent deal.
0 Reply
Steve Foster
Investor · Beaumont, TX · Member since 2015 · 11 posts · 4 votes
9y
Heading to my wife's Midwest hometown for investment properties because its property tax rate is ~1/3rd of where we live in Texas and property insurance is much cheaper, too.
0 Reply
Trevor Lohman
Investor · Redlands, CA · Member since 2013 · 177 posts · 76 votes
9y
Just ran into the situation Michael Plante is describing. Funny enough while purchasing through James Wise who also is on this thread While still high, taxes were less than half what was listed on the mls
1 Reply
David Da Silva
Real Estate Agent · Jersey City, NJ · Member since 2017 · 69 posts · 56 votes
9y
I'm in NJ, taxes are extremely high here. We're usually paying a minimum of $9k+ in taxes on a single family. It's unbelievable. I suggest looking into multifamily if the taxes are hindering deals. More units will split the burden and lessen the risk of going under during a vacancy.
4 Reply
Frank Schwarz
OP
Gila Bend, AZ · Member since 2017 · 38 posts · 14 votes
9y
Originally posted by @David Da Silva:

I'm in NJ, taxes are extremely high here. We're usually paying a minimum of $9k+ in taxes on a single family. It's unbelievable. I suggest looking into multifamily if the taxes are hindering deals. More units will split the burden and lessen the risk of going under during a vacancy.
Excellent idea. Thank you.
0 Reply
Fred Heller
Real Estate Agent/Property Management · Houston, TX · Member since 2014 · 1k+ posts · 827 votes
9y
I thought we had high property taxes. I pay about $3000 a year on a house appraised at $250,000.
2 Reply
Michael Plante
Deland, FL · Member since 2017 · 2k+ posts · 1k+ votes
9y
Originally posted by @David Da Silva:

I'm in NJ, taxes are extremely high here. We're usually paying a minimum of $9k+ in taxes on a single family. It's unbelievable. I suggest looking into multifamily if the taxes are hindering deals. More units will split the burden and lessen the risk of going under during a vacancy.
What is the actual market value?
0 Reply
Llewelyn A.
Investor / Broker · Brooklyn, NY · Member since 2016 · 665 posts · 1k+ votes
9y
Well, if people are really looking for cheap taxed properties, you really can't beat Brooklyn for that kind of advantage.
Here is a property that sold for $2,942,000 (YES..... that almost $3 Million!!) but only pays ANNUAL Taxes of $7,252 per YEAR.
The ratio of Annual Tax / Price = $7,252 / $2.942 Million = .0025 OR .25%!!
CRAZY, but that's again why I buy in Brooklyn. You really can't beat that kind of Tax ratio.
Here's the proof:
The Property as sold snapshot:
The Property Taxes on it via the County Tax Website:
It's funny how Taxes are so different in so many places.
So while Prices are extremely expensive here, Property Taxes can be extremely cheap!
4 Reply
Frank Schwarz
OP
Gila Bend, AZ · Member since 2017 · 38 posts · 14 votes
9y
@Michael Plante - The county numbers were lower than the MLS as you mentioned. This image is from last years numbers.
I love running the numbers to learn the effects they have on a deal.
Tax year: 2016 - Total Value: $86,300
Tax Exempt Abated
Land Use Code 5100
Land $16,100 $ $
Building $70,200 $ $
Total $86,300
1 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
9y
Originally posted by @Account Closed:

Some places like Maryland and Washington state have both *high taxes*, AND an *excise tax* on top of that when you sell the property. Fix & Flips are hard to make work in either state.
true on the excise tax in WA state but advalorum tax's are very low compared to other states.. not sure why you think they are high.. I own and have owned many many wa state properties and that's not the case.
high tax states in my mind are
Texas
IL
east coast generally
west coast modest tax's CA being one of the best with prop 13 .
also like Indiana tax's ..
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2 Reply
Brian Ploszay
Investor · Chicago, IL · Member since 2009 · 1k+ posts · 1k+ votes
9y
Two things you should do:
Check similar properties in the area and compare the taxes. Is this property out of line?
Next, take a pass. The suburbs of my city (Chicago) have numerous cheap properties that are burdened by high taxes. Rental houses can't support taxes that are $6K+ per year.
1 Reply
Will GastonPro Member
Rental Property Investor · Columbia, SC · Member since 2010 · 1k+ posts · 2k+ votes
9y
@Jay Hinrichs what do you think of South Carolina's tax, comparatively? I know you do a lot of investing in Charleston.
0 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
9y
@Will Gaston have no clue as I don't hold anything more than a year as we build new construction..
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1 Reply
Scott Price
Rental Property Investor · Coupeville, WA · Member since 2011 · 135 posts · 52 votes
9y
I just encountered this issue in Memphis, where taxes are very high. Buyers need to include a large tax line item in their due diligence process, and most proformas are unrealistically low as usual (especially if there is any likely post-purchase re-valuation by the Assessor). After purchase last year, my 40 unit got re-valued (to still less than actual purchase price, and after an informal appeal since they used some incorrect data). The local triple whammy combination of Memphis tax, Shelby County tax, and excise tax comes to about 3% of purchase price and over 16% of total gross income.
3 Reply
John Hickey
Rental Property Investor · Chappaqua, NY · Member since 2015 · 1k+ posts · 947 votes
9y
Frank Schwarz look into grieving the tax. Learn the ins and outs of your city/town/county. I grieved taxes on a house last years and got them lowered 7k. Keep in mind some buyers move on as soon as they see high taxes, water bills, low rents etc. I try to dig in and find hidden value(raise rents) or ways to lower expenses. I'm buying a two family now that lingered on the market. I speculate part of it was that the taxes are 8k a year. I'm buying at 75k so as soon as the grieving period starts next spring I'll grieve, most likely win bc they have it as assessed value of 150k. Not sure about your municipalities rules but where I am if you buy below assessed value off the MLS they usually give you the sale price....bank auctions or short sales, etc differ usually
1 Reply
Tracy Rea
Naperville, IL · Member since 2017 · 6 posts · 4 votes
9y
This is what makes living/investing in Illinois so tough. I'm looking out of state. It's not just what the taxes are today, it's what they will be in 5 years.
3 Reply
Frank Schwarz
OP
Gila Bend, AZ · Member since 2017 · 38 posts · 14 votes
9y
Originally posted by @John Hickey:

Frank Schwarz look into grieving the tax. Learn the ins and outs of your city/town/county. I grieved taxes on a house last years and got them lowered 7k.
... next spring I'll grieve...
LOL - Thanks. I will look into this process.
0 Reply

Tax	Exempt	Abated
Land Use Code	5100
Land	$16,100	$	$
Building	$70,200	$	$
Total	$86,300

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Property taxes are twice as much as the mortgage!

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Tax year: 2016 - Total Value: $86,300