Pro Forma Property Taxes

[Justin Robinson-Howe]

I've only purchased my investment properties around the tax assessed value, so wanted to hear more from the community on how they adjust for pro-forma taxes. I guess the main question is say the tax assessed value on a property I'm looking at is significantly below my purchase price, do I assume the new assessed value will rise to the purchase price? Would be interested to hear how property taxes have adjusted for the community. Thanks for the help!

[AJ Leman]

Hey @Justin Robinson-Howe,

I have not found this to be the case, although I imagine it depends on your state, city, etc.

In Iowa, taxes do come up some, but not all the way to the purchase price, at least not at first. Here is an example: We bought an 18 unit for 1.25M. Tax assessment was $888k. New taxes are around 915k. So, there was a bump, but not up to the purchase price.  I have found this to be fairly consistent in all properties purchased. 

Good luck!

AJ