Estimating property tax increase before buying rental property

[Shankar Sridhar]

Hi folks,

I am under contract for a single family in Indianapolis. Its a 4 bed 1.5 bath 1248 sqft house with detached garage.

I am trying to run numbers to know my cash on cash return etc. 

I got the county assessor's record. It shows this property assessed at 69,700 64,600 for years 2021 and 2020 respectively. I am trying to know if this value would further jump if I buy the property and make some improvements like paint, flooring, water heater, adding GFCI outlets etc.

I already see this value jumped between 2020 and 2021. Will this further increase? If so, its going to affect my cash on cash returns further.

Also, on the same street, there is a similar property with 4beds and 1 bath, 1200 sqft. I checked the tax records for that one as well. That has higher assessed value as well as higher change in assessed value. 103k vs 92.9K in 2021 and 2020 respectively. 

Given both properties are on the same location, and very similar in and out,  will my value go up from 64k to 100k or so like the other property ? or maybe not that much, but still due to cosmetic improvements, will I still see a bump ?

Also, note that, my property under contract looks like has had only single owner so far, compared to the other property which has seen transfers 2-3 times. Wondering if that's the reason for higher assessed value ?

Let me know your insights. Thanks!