Worried about ever rising stupid property taxes.

[Reya Ripet]

Hi all.

I'm in Alachua county FL, but that's not available in the location options.

So , off course the proposed property taxes bills have arrived. And each has gone up the full 10%.

IMO property taxes are a criminal organization's plan to rob people 'legally' of their property when they can no longer afford to pay .

Look at the world economic forum's slogan 'you will own nothing and be happy'.  And tell me what else they could mean ?

My concern is that I can't just keep raising the rent ?  Do mortgages keep going up as well ?

Or is it not a problem to keep raising rents to cover higher costs ?

I only have two properties and they are my income, so I'm concerned.  

I can't afford to buy a third property atm.  

Thanks

[Chris Seveney]

@Reya Ripet

When have you ever seen governments do anything efficient? Yes property taxes will raise and continue to rise especially from covid and the loss of tax revenue some places have had.

Can you continue to increase rent - only if market demands it but answer is most likely no. This is a factor to consider when buying real estate - which is in many instances your costs / expenses grow at a faster rate than rents.

[Albert Hasson]

So you don’t believe in property taxes?

Did you believe in them when you bought the two properties?

Don’t really know what to say other than taxes are a fact of life and it’s likely your property appreciated far more than 10% in the past year.

If you have a 30 yr fixed mortgage then no, your mortgage will not go up.  

How much you can raise rent depends on your market.  Good luck to you!

[Theresa Harris]

I'd call and ask why the taxes have gone up 10%.  In some areas, the taxes seem to be a % of the house value and others it is tied to the value of the house, but just because house prices go up, doesn't mean taxes do.  I think the latter is a better way of doing it.  If the market increases, it does not mean that the city needs more money to operate-their costs are dependent on the services they provide NOT how much houses are worth.  

I have homes in two different provinces, and one uses one system, the other another.  I like the one where it depends on the services and city budget.  I don't see how cities can operate on the other model-what is house prices go down-you can bet your taxes won't.

[Brad S.]

Quote from @Reya Ripet:

Hi all.

I'm in Alachua county FL, but that's not available in the location options.

So , off course the proposed property taxes bills have arrived. And each has gone up the full 10%.
IMO property taxes are a criminal organization's plan to rob people 'legally' of their property when they can no longer afford to pay .
Look at the world economic forum's slogan 'you will own nothing and be happy'.  And tell me what else they could mean ?
My concern is that I can't just keep raising the rent ?  Do mortgages keep going up as well ?
Or is it not a problem to keep raising rents to cover higher costs ?
I only have two properties and they are my income, so I'm concerned.  
I can't afford to buy a third property atm.  

Thanks

 ******************************

If you want to feel better about your FL property taxes, buy a rental in TX. Then your FL taxes may start to feel pretty low.

.................your welcome  :P

[Bill B.]

Property taxes shouldn’t impact you too much. Assume property taxes are 10% of rent max. So if they go up 10% you only need to raise rent 1% to cover it. That shouldn’t be an issue either. If taxes get too high or rent fails to keep up with inflation that’s a reason to look to a new market.

Rents SHOULD increase, since property taxes are an expense that every landlord had to deal with.  So all had their expenses go up. They also make buying more expensive. You’d advantage in Florida is no income tax, your disadvantage is weather events, insurance and property taxes. It’s usually a good trade off but sometimes the government decides to kill the golden goose. 

[Mike Dymski]

Property values increasing is a good thing...beats the heck out of the alternative.  Follow the appeal process if their valuation is wrong.

And forget about the WEF and the government.  You can't hate your way to happiness or success.

[Greg M.]

Quote from @Reya Ripet:

So , off course the proposed property taxes bills have arrived. And each has gone up the full 10%.

I don't know anything about your properties, but it appears that the average property tax is 1.05% in Alachua County. The average priced home there is $291,900. That makes your tax bill $3,065. If it went up the full 10%, that's an additional $306.50 or $25/month.

If you're concerned about such a small increase in costs, you're in the wrong business. 

It appears that Alachua County is a lower end market. If you can't raise rent there, maybe you need to look at other markets. 

[Sergey A. Petrov]

If you say you are worried about “ever rising stupid property taxes”, tenants say they are worried about “ever rising stupid rent”. Things go up, learn to navigate an operate your business adjusting for inflation and other things 

[Nathan Gesner]

Quote from @Reya Ripet:

Sergey nailed it. You are being completely unreasonable. You act like the government is a criminal organization, robbing you of your hard-earned money, but ignoring the fact those taxes pay for your roads and schools and other public accommodations that attract your renters. In fact, renters make the same nonsensical arguments against greedy Landlords that rob people "legally" of rent money each month.

Look, your taxes went up 10%. Average rent rates have probably increased 20% or more in the past two years. I'm willing to bet your property value has also increased at least 20% in the past two years. So you're making more money, but you're upset that you have to pay a little more?

If you can't handle the increasing cost of doing business, take advantage of the hot sales market, sell the property, and invest in something else. And then come back in ten years and let us know what those taxes cost you!

[Jeremy H.]

Quote from @Nathan Gesner:

Quote from @Reya Ripet:

Sergey nailed it. You are being completely unreasonable. You act like the government is a criminal organization, robbing you of your hard-earned money, but ignoring the fact those taxes pay for your roads and schools and other public accommodations that attract your renters. 

I agree with most of your post - but you completely lost me here. 

The government does in fact rob you every step of the way. Half the reason I started investing in real estate - to save on taxes...AH but they still find a way to get you...passive RE investor?! Lets put income limits on what you can deduct! Stimulus checks...nah we need income limits on that too! But lets send billions to Ukraine! 

I paid 45k in FICA taxes last year, and 8k state tax on top of that. Schools still suck. Roads still suck. City still floods. Didn't get a penny from the stimulus checks. Crimes still as bad as ever. In fact...if you don't get this shot we'll have you fired from your job! Let's actually fire the nurses first! 

We still have one of the best governments in the world relatively - but they completely f*ck the upper middle class every step of the way.

[Marcus Auerbach]

Just like your tenants are wondering how landlords are a criminal organization to legally rob them with ever rising rents... 

10% of how much? I like taxes as much as you do, but somehow we have to pay for what you might call civilization.

Milwaukee is known for high property taxes and there is always a lot of drama and people complain how hard they are hit. I took some time to research and found two things that the public does not understand (and the gov does a terrible job communicating).

We had a major post-covid re-assessment, but contrary popular belief, the total sum collected did NOT go up last year, taxation just got redistributed according to adjusted home values, both up and down. In other words, if everyone's property value exactly doubles, everyone's taxes stay exactly the same. Some areas doubled in value from a very low base, of course they pay more now (aka fair share) and of course they are the ones screaming bloody murder, everyone who pays a little less just goes on with their day.

Also, we have a perception issue. Milwaukee does NOT have a city sales tax, city income tax or any other form of additional taxation that most other metro areas use to fund their budget. Wisconsin law makes property taxes the only source of income. If I were the king, I'd cut property taxes in half and introduce an average US city sales tax for the same net. Perception problem solved. 

Nobody appreciates that currently their grande chai latte costs 5ct less because our sales tax is so low. But, if you see it wrapped up in one annual tax bill it stings of course.

[Bruce Woodruff]

Everyone in their right mind should strive to pay as little tax as is legally possible. Yes, the Govt wastes most of what they collect, and spends much of the rest on things we don't like.....But we have to pay for those things that are actually needed. like Police, Schools, Fire, Etc.....

It's one of the rules of the game you signed on to play when you became a Real Estate investor. Now your goal is to offset the taxes by being smart. Hire a CPA, learn how to play the game. 

Or move to a state that has lower taxes - but they all gotta get their money.....look at California, 1% property tax but look at the other ways they get their money (hint, FL is better :-)

[Jay Hinrichs]

Quote from @Brad S.:

Quote from @Reya Ripet:

Hi all.

I'm in Alachua county FL, but that's not available in the location options.

So , off course the proposed property taxes bills have arrived. And each has gone up the full 10%.
IMO property taxes are a criminal organization's plan to rob people 'legally' of their property when they can no longer afford to pay .
Look at the world economic forum's slogan 'you will own nothing and be happy'.  And tell me what else they could mean ?
My concern is that I can't just keep raising the rent ?  Do mortgages keep going up as well ?
Or is it not a problem to keep raising rents to cover higher costs ?
I only have two properties and they are my income, so I'm concerned.  
I can't afford to buy a third property atm.  

Thanks

 ******************************

If you want to feel better about your FL property taxes, buy a rental in TX. Then your FL taxes may start to feel pretty low.

.................your welcome  :P

 Texas Prop tax's  = Eye watering event..  especially for landlords who based thier purchase on current tax's and then the following years new assessment just wiped out their cash flow.

[Nathan Gesner]

Quote from @Jay Hinrichs:

It is happening around the country. Wyoming (it doesn't actually exist) is very tax-friendly. However, I saw property taxes increase almost 20% this year. I could whine about it, but was I complaining when my properties gained 20% value in one year? Or rents increased 20% in the last three years. We should take the good with the bad. 

I hired a good CPA last year and am getting a $45,000 refund. It just takes time to find a specialist that can help navigate the nonsensical laws that allow me to make hundreds of thousands and pay little or no taxes. 

[Jerry W.]

In all the states I invest in the property taxes are tied to the value of the property unless it is a special assessment.  The fact that your property taxes went up 10% means your property was assessed about 10% higher by your assessor this last year.  The good thing is that rents have gone up a lot also.  By the way property taxes are a local government tax, not a federal tax.  The federal tax is based upon income, not value of your property except for inheritance taxes.

[Reya Ripet]

Quote from @Jeremy H.:

Quote from @Nathan Gesner:

Quote from @Reya Ripet:

Sergey nailed it. You are being completely unreasonable. You act like the government is a criminal organization, robbing you of your hard-earned money, but ignoring the fact those taxes pay for your roads and schools and other public accommodations that attract your renters. 

I agree with most of your post - but you completely lost me here. 

The government does in fact rob you every step of the way. Half the reason I started investing in real estate - to save on taxes...AH but they still find a way to get you...passive RE investor?! Lets put income limits on what you can deduct! Stimulus checks...nah we need income limits on that too! But lets send billions to Ukraine! 

I paid 45k in FICA taxes last year, and 8k state tax on top of that. Schools still suck. Roads still suck. City still floods. Didn't get a penny from the stimulus checks. Crimes still as bad as ever. In fact...if you don't get this shot we'll have you fired from your job! Let's actually fire the nurses first! 

We still have one of the best governments in the world relatively - but they completely f*ck the upper middle class every step of the way.

 This. They will tax me either way. If I sell I'm taxed on that as well . I will have to further invest to keep up. Let's hope things stay relatively stable for now.

[Ray Hage]

While I agree that government will rob you every step of the way. When I say, I don't mean they will tax you...I mean they will tax you AND not use the money properly. Ton of waste. That being said, get used it because it's not going to change any time soon. All my properties are in south FL and you can bet every expense went up about 10% here too.

I would advise you raise the rent to achieve specific goals...What does that mean? For example, if your property tax bill went up $600, you'd want to raise the monthly rent at least $50 if the market can bear it. I think most tenants wouldn't move out over such a small increase anyhow. If you can raise more than $50, then I'd go for it because other expenses go up too and don't forget our old friend, inflation. 

I am not an expert in the Ocala market, but I do know the market is relatively hot up there as well so count your blessings that you already own property and raise the rent at least enough to cover increases in expenses. 

[Wale Lawal]

@Reya Ripet

Property taxes will go up with the inflation, so does the rents and income of people.

We can estimate the taxes and other property expenses to check if they meet our investment goals.

All the Best!