How do you project Texas property tax increases?

[Leigh Ann Smith]

I'm looking at a property that would cost about $75K and needs about $30K of repairs for an ARV of $125K. The tax rate is about 2.9%. Most recent tax appraisal is $92K. Year 1, I should be able to appeal based on the purchase price and bump the appraisal down to $75K.

But, how should I look at the following years? Year 2, I'm not sure if they'll bump the appraisal up by 10% or if they will bump it on up at least to where it was, if not nearer to the ARV.

And how about after that?  I've heard that investment properties aren't capped at 10% increase per year like owner-occupied homes are.  When you are analyzing a deal, how much increase in property taxes do you calculate in for each year?

[Roy Oliphant]

@Leigh Ann Smith

What a great question, especially in Texas where property taxes are a major expense (I know, everyone thinks they are high and its all relative.

I would figure if you get the taxes lowered due to condition, they will be watching to raise them when you complete the rehab.  We have been told to expect that in several locales.  As to future, Texas A&M has some great resources for Texas investors at

http://recenter.tamu.edu/

They have lots of data that may help you guess at what will happen to property values and thus the taxes that are based on them.