Estimating Property Taxes on Rehabbed Properties in Cook County

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Estimating Property Taxes on Rehabbed Properties in Cook County

Faraz Tariq
Real Estate Agent · Chicago, IL · Member since 2016 · 29 posts · 12 votes

Hi all –

Looking for some recommendations on how you are estimating future property taxes on rehabbed properties. I have a client I am working with who is interested solely in purchasing recently rehabbed SFH as a primary.

For example, one home we are reviewing is in Elmwood Park and slated for reassessment in 2022. It was purchased in May of 2020 for $175K and it is now listed for $490K.

The 2nd installment of 2019 indicates the Property Value at $248,460.

After reviewing the detail that goes into the AV calculation, it explicitly states that property condition and interior features (i.e. amenities) are excluded. 

What safe assumptions (if any) can I make for what the 2022 FMV and AV will be? This particular renovation did not alter sq footage and was just a gut rehab.

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John Warren
Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
5y

@Faraz Tariq good to see your name pop back up! I can forward you an article I wrote on this topic that explains it step by step. 

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  • Will Fraser
    Real Estate Broker · Salt Lake City & Oklahoma City · Member since 2018 · 3k+ posts · 2k+ votes
    5y

    Hi @Faraz Tariq, you'll want to determine the prevailing property tax rate for Cook County and then apply that to the real market value of the property (based on comparable sales).  Counties are getting better and better at readjusting taxable values more frequently, so in my experience you MAY have a year or two where they don't tax at the real value, but eventually they will adjust it up to that level.

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  • John Warren
    Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
    5y

    @Faraz Tariq good to see your name pop back up! I can forward you an article I wrote on this topic that explains it step by step. 

    3Reply
  • Brie SchmidtBusiness Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
    5y

    I always assume the current ax rate x the purchase price as a worst case scenario

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  • Faraz Tariq
    OP
    Real Estate Agent · Chicago, IL · Member since 2016 · 29 posts · 12 votes
    5y

    @Will Fraser Thanks, Will.  As I understand, it's actually a bit unique in Cook as it's not a straight line of comparable sales, or I should say, what's considered a comparable sale is not what I consider a comparable sale from a purchase price perspective.  

    @John Warren Yes, that article would be great!  I was debating on text you but thought I've contacted you plenty in the last year for help!

    @Brie Schmidt Thanks, Brie.  I completely agree with you as personally, I would want someone to give me the worst possible case and let me decide from there.  The challenge I see with a newer homebuyer is that because they don't understand the process, they immediately think the worst will occur.  I was hoping to provide them with a worst case and a likely case, theoretically, emphasizing that we won't have an exact figure until a later time.  

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  • Andrew Holmes
    Rental Property Investor · Chicago, IL · Member since 2015 · 275 posts · 271 votes
    5y

    @Faraz Tariq - There is a company called Kensington Research & Recovery. If you are concerned about taxes call them. I think it's against BP policy to post a number here. You can DM me and I can have somone in my office send it to you. We have about 230+ plus properties and all of the tax appeals are handled by them. I believe they change 1/3 of the savings. Each year they monitor the files, Proposed increases and assessed values. They only appeal if you need it. It's easy to miss the deadline in all the Townships to it's easier to just have the entire portfolio with them because their is no cost unless you save. They do thousands of these so they will be your best bet to chat. Hope that helps. 

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  • Faraz Tariq
    OP
    Real Estate Agent · Chicago, IL · Member since 2016 · 29 posts · 12 votes
    5y

    Thanks @Andrew Holmes, I appreciate the contact and will keep them in mind.

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