How Property Taxes Affect Home Affordability

[Bette Hochberger]

Prospective homeowners, consider property taxes when budgeting for your home. They can vary widely and significantly impact the overall cost of homeownership. When calculating what you can afford, factor in these taxes to avoid surprises. Sometimes, a more expensive home with lower property taxes can be more affordable than a cheaper home in a high-tax area.

[V.G Jason]

Quote from @Bette Hochberger:

Prospective homeowners, consider property taxes when budgeting for your home. They can vary widely and significantly impact the overall cost of homeownership. When calculating what you can afford, factor in these taxes to avoid surprises. Sometimes, a more expensive home with lower property taxes can be more affordable than a cheaper home in a high-tax area.

You're preaching to the wrong choir here. They just look at cash flow, so day 0 metrics. They don't think that far ahead.

Property tax usually gets re-assessed. They can't think that far out.  So yes, more expensive homes with lower rates can be different than cheaper homes in higher areas but then actual principal, interest, and insurance will likely do the off-setting.  It won't be that wide. A city like Houston  isn't $1MM+ in above average areas, like a city like Denver is simply cause of prop tax but you then got higher PI&I. 

[Luis Maqueira]

VG Jason

"You're preaching to the wrong choir here. They just look at cash flow, so day 0 metrics. They don't think that far ahead."

We are in Miami Insurance is the concern. 

Luis M

[Spencer Abeyta]

Insurance is important to factor into the rental equation as well. The past year we have had insurance prices increase up to 40% for some owners. This can mean an increase of $100 per month in costs. In many cases, the market has not supported a $100 increase on the tenants to cover the cost. This causes owners to take a cashflow loss of $25 to $50 per month.

[Bette Hochberger]

Quote from @V.G Jason: T

Quote from @Bette Hochberger:

Prospective homeowners, consider property taxes when budgeting for your home. They can vary widely and significantly impact the overall cost of homeownership. When calculating what you can afford, factor in these taxes to avoid surprises. Sometimes, a more expensive home with lower property taxes can be more affordable than a cheaper home in a high-tax area.

You're preaching to the wrong choir here. They just look at cash flow, so day 0 metrics. They don't think that far ahead.

Property tax usually gets re-assessed. They can't think that far out.  So yes, more expensive homes with lower rates can be different than cheaper homes in higher areas but then actual principal, interest, and insurance will likely do the off-setting.  It won't be that wide. A city like Houston  isn't $1MM+ in above average areas, like a city like Denver is simply cause of prop tax but you then got higher PI&I. 

This was just a simple post towards homeowners. I get many clients mentioning property taxes while coming to me, so just thought I would share.Totally agree! (:

[Bette Hochberger]

Quote from @Spencer Abeyta:

Insurance is important to factor into the rental equation as well. The past year we have had insurance prices increase up to 40% for some owners. This can mean an increase of $100 per month in costs. In many cases, the market has not supported a $100 increase on the tenants to cover the cost. This causes owners to take a cashflow loss of $25 to $50 per month.

Yes! 

[Bette Hochberger]

Quote from @Luis Maqueira:

VG Jason

"You're preaching to the wrong choir here. They just look at cash flow, so day 0 metrics. They don't think that far ahead."

We are in Miami Insurance is the concern. 

Luis M

 Definitely! I'll make another post about that. Florida is a real concern on insurance.

[Bruce Woodruff]

Texas is a great example.......low prices, high taxes.....it certainly does make a difference.