Illinois Property Taxes

[Marc Allen]

Hi All,

I'm curious how people are continuing to justify buy-and-hold investments in Illinois suburbs with the current state of property taxes. I've got my eye one pretty inexpensive property which is listed at $80K, with rents at $1,200 a month, which is a decent ratio, but the property taxes are $3K a year - a whopping 3.8% of the appraised value. I see similar ratios all over Illinois, where the current property tax as a % of the property value is hovering between 3%-4%.  $200K properties paying $6K a year in taxes. That is just crazy vs. the 1%-1.5% I see in many other states I have looked.

The other 2 scary factors are 1) with the pension obligations, I don't see IL property tax doing anything but increasing, all while the state continues to lose residents which diminishes the tax basis  2) Property taxes are a low/no value add expense. As I see it, I would rather that percentage of the expense be going towards improvements or mortgage paydown, not a set of state/city services that are not any better than neighboring states.

Curious how others are continuing to invest. Yes, "list prices" to rent looks good on paper, but the taxes . . . .