Help with options after a reassessment

[Mary Davidson]

Hello all,

I am wondering what to do.  I purchased 2 rental properties (my first) and didn’t realize how much a tax reassessment would affect my numbers.  I was told by someone in the auditor’s office that a sale wouldn’t trigger a reassessment.  Well, she was wrong.  I finally received the paperwork about a year later and submitted my appeal letter.  I just got the reply, saying it was denied and the assessment stands.  I don’t know that doing anything to appeal it at this point will accomplish anything.

We will just about breaking even on the one house.  The other one will still have some cash flow.  I thought about making a lump sum payment toward the principal, but that just shortens the length of the mortgage, not the monthly payment.  My question is about something I just read about, recasting your mortgage, where you pay a lump sum and they refigure your monthly payment, but the length of the mortgage stays the same.  Has anyone done this?  Is it worth it to be doing better than breaking even each month, or should we just keep our extra funds in the bank ready for emergencies?

Thanks for any advice!!

[Ned Carey]

@Mary Davidson youve given us no idea of whether the new tax amount is fair. If it is not fair then I would challenge the appeal results. I know in Maryland they don't really get serious until about the third round of apeal or when you are ready to go to court. They then seem to get more flexible.

I my aer ther are companies that appeal tases on a commision bassis. THe company I use chrges 1/2 of the tax salvings in the first year. Find a company like that and they can perhaps give you guidance if it is worth it to persue futher.

if the new taxes turned your deal to negative or break even cash flow it was probably not very good numbers to start with. 

If you decide to recast the mortgage consider what your cash on cas return is for the big paydown vs what you could get investing that money in something else.