Buy and Hold Investors Watch Out for This SCAM!

[George Gammon]

If you're a buy and hold investor you may be getting scammed...

The federal reserve has kept interest rates at near zero for the past 7 years.  This has created an artificial increase in purchasing power and therefore higher RE prices.

What's the problem with that?  

Nothing as far as you're equity, but these higher prices may increase your expenses faster than you can raise rents.  The main expense I'm referring to is property taxes.  And that's the scam.  The value of your rental property doubles and so do the property taxes.  A higher portion of your gross rent will go to the government...they just picked your pocket! 

I know we all love equity gains but my point with this post is don't forget your property taxes.  If you bought a foreclosure at far below market value don't forget to call the county and get the property reassessed.  

I did that with several of my properties when I bought them because the county had them assessed based on the neighborhood not what I paid for them.  I wasn't able to get the assessed value down to what I paid, but I got it down, which lowered my overall property tax burden significantly.  

Remember the county will always tell you when you're not paying enough but the never tell you when you're paying too much.  You've got to stay on top of that.  Especially now when housing prices in your area may be rising faster than rents. 

I'd love to hear other people strategies...

George