All Forum Posts by: Benjamin C.

@Louise Alexander

Thanks! That makes sense 

Thanks all for the information. That helps me understand how taxes work in this market. 

Let me put my question another way.

Do you feel there is a risk to long term investors that the investor owned rate of 2% could increase sometime in the future. Does anyone understand how this would happen(necessary for saying it can't happen). 

I know all investments have risk and its hard to answer what could happen "sometime in the future". In the long run we are all dead right??? But I think it's good to thoroughly think though some of the lower probability but high impact risks. As a long term investor I do not want to be in a situation 5 years from  now where I have say 5 properties in this market and I find out some county board have voted to double taxes on investor owned properties. You'd then be in a situation where you've faved with two bad decisions, 1. Hang onto properties that no longer cash flow or 2. Sell these properties and incur all the closing costs of selling plus also be selling in a week market(others will be running from the market as well, it would certainly be bearish property values) 

Hi All,

I've run the numbers on a few investment ideas in Indianapolis, the numbers look good on paper, but the cash flow seems to be to be helped by the low property tax rates. I'm curious people's thoughts on the risks of property taxes rising over the long term. 

How is it sustainable for a 3 bedroom house to have $1300 a year in property taxes? How much would it cost the town to send 2 kids in that house through school? Plus all the public services that need to be provided? I'm no expert on municipal budgets, but it seems hard to get my head around how they make it work. With the increasing debt levels of municipalities in markets like these, isn't it reasonable to think there has to be some tipping point in the next decade where these town are insolvent and even right leaning towns have to raise property taxes?

And taking that thought a step further, what happens to the small investor with maybe a half dozen rentals in Indy when property taxes double and their properties are negative cash flow now????

I'm very curious for thoughts from those who understand property taxes better then I do. I also think this can apply to many markets besides Indianapolis, but it was just the one I was looking at today and thinking about this.

Thanks all

Ben

Hi Phillip,

I'm curious your basis for 50 to 100% increase in condo prices. From my experience the condo prices have been stubbornly slow to recover from the lows. I own in downtown Stamford and my property is still about 20% below where I bought in 2008. Just curious what I'm missing. 

Thanks

Ben

I've been using 7%. I just have one condo rental and it's been about 3 years, but so far it's been adequate. I'm actually looking at a few new condo opportunities so hopefully I'll soon have some more knowledge(for better or worse) on that estimate. 

Hello all,

I was wondering what cost assumptions people use for Maintenance and Cap Ex when calculating CAP and COC returns expectations for condos. For a SFR I typically use 15% of rent to cover both items.

However I've been thinking this is probably aggressive for a condo with a HOA. Of course it will be case by case, but if the HOA is covering the routine maintenance to the exterior, which should significantly reduce those costs. There always is the risk of the dreaded special assessment. But, if the HOA is well run, they should be building a reserve fund to cover cap ex items outside of your condo as well.   And if the HOA isn't well run, that's a whole other problem. 

Curious folks thoughts on this. 

Thanks

Ben

Thank you everyone for the warm welcome. 

Hello All,

I live in Weston CT and currently own 1 rental property in Stamford. I'm looking to expand my portfolio. To be honest, that's about all I have figured out. :) 

I've been considering picking up another property locally, investing via crowdfunding sites, and finding better cash flow market through a turnkey provider.

I have already learned a ton from the forums and this website. I'd like to start off by saying thank you to all who post here for your help. I will do my best to contribute as you have.

Ben