Is Rental property tax different from owner occupied?

[Jordan Roberts]

Hello,

So I was on Roofstock recently looking at rentals in their inventory and analyzing deals. I noticed that a lot of the property taxes listed on the homes were really high. For instance, I found a home in Illinois worth $112k requiring roughly $25k down that collected just over $1400/mo in rent and only cash-flowed $52/mo. I was puzzled why it cash-flowed so little until I noticed that they had property taxes listed at $5,800/year (just over 5%), which was higher than the mortgage every month. I went onto "smart-asset" and input the state/zipcode and it told me that property tax in that area should only be 2%. So I emailed them letting them know that something is wrong with their algorithm on the website. They replied with "I believe that property taxes for investment properties are treated differently than primary residences."

I'm new to REI and am getting close to pulling the trigger (still saving up a bit more), however I have done a lot of research into RE and have NEVER heard of rental property taxes getting treated differently. Is this true? Do these cash-flow numbers seem correct? Is this an Illinois only thing? (which I could see because they have high property taxes).

The reason $52/mo seems really low to me is because I found a turn-key property company I'm on an email list for who regularly emails me with new listings at much higher ROI's (18%+). On their spreadsheets they list the property taxes as being what is expected for those areas, surely they would mention much higher property taxes if that was true. To clarify, this turn-key property was interviewed by and given the stamp of approval by BiggerPockets (that's how I found them and why I trust them).

So something is not adding up here for me. Maybe I really am that dumb; but either Roofstock is displaying false numbers, this turn-key company is displaying false numbers or it's an Illinois state thing in which case I will not be investing there. What do you guys know about any of this? I really appreciate any responses.

[Steve Stuart]

In my area property taxes on non-owner occupied property is greater... It's a 6% ratio instead of 4%. The millage is .2415 (So if a property is $100,000 you'd multiply it by 6% for non-owner occupied then by .2415 to find the annual taxes will be $1,449. Owner occupied multiply by 4% first and the taxes will be $966)