Property taxes on rentals

[Shaheen Ahmed]

Why are property taxes are double or triple on rentals than owner occupied? Mobile county is more than 1%. some counties in Ohio as high as 2%+. What gives? Prises are so attractive but as soon as add the taxes….there goes the positive cash flow. Frustrating. 

[Jimmy Lieu]

Quote from @Shaheen Ahmed:

Why are property taxes are double or triple on rentals than owner occupied? Mobile county is more than 1%. some counties in Ohio as high as 2%+. What gives? Prises are so attractive but as soon as add the taxes….there goes the positive cash flow. Frustrating. 

Hi Shaheen, rental properties often get hit with higher tax rates because local governments see them as commercial investments. If the taxes are killing your cash flow, you'll need to either negotiate a lower purchase price to offset the tax burden or budget for some property improvements that could increase rental income and help balance things out. If the numbers don't work after taxes, you've got to be prepared to walk away or get creative with your offer. Sometimes telling a seller "I can only make this work if we adjust the price" can open up negotiations. Happy to connect and answer any other questions you may have.