Tax person is the devil

[Alan Pederson]

Last year the taxes went up on one of our properties and took a big bite out of our earnings. We had a $1,000 house payment and were renting it out to my step-daughter for $1,400 a month. The county increased our taxes and the new payment went up to $1,200 a month. So our profit went from $400 a month to $200 a month. We were renting to my step-daughter (no lease) at a discount and I told her she probably needed to move because I needed to rent the house out for $1,600 a month (market rate for this house). She moved a couple of months later into an apartment for $1,000 a month and we found new tenants to pay the $1,600 rent.

We just received our new information from the mortgage company on the rentals we have. One house is going up $8 a month, another house is going up $56 a month, and the third house is going up $300 a month. This third house we pay $800 a month and rent it for $1,250 ($450 profit). Now that house is only going to make us only $150 a month. I was planning to raise the rent $50 a month on this house but there is no way I can raise it $300 a month. Market rent for this house is probably $1,400 but I have really good long term tenants that I want to keep.

The tax man is killing me... Rant over