Quote from @Travis Biziorek:
Quote from @Justin Carter:
Quote from @Travis Biziorek:
I've heard a lot of complaints about it this year. For a baseline, I own 12-doors in Detroit but I also have a couple hundred clients I've helped buy rentals there over the last couple years.
Everyone seems to be complaining about higher property taxes. The reality is, you should be pulling the current SEV for any new acquisition and doing your property tax calculations based on that figure before buying. I do this for every single client.
But even that is not bulletproof and I've seen new adjustments going 5-10% higher than that.
You can appeal property tax assessments, and I've done so with a lot of success in the past. But it's best if you have done some significant rehab to the property (at least that's my experience.
All that said, you shouldn't be seeing anything close to a 2x in expected property taxes unless you completely fumbled the ball on pulling the current SEV before purchase.
A lot of people do their numbers based on what the current owner is paying or what Zillow shows. This is a huge mistake, and it's where most people get into trouble.
Thank you for your response Travis. I had anticipated the taxable value increasing based on my math, I just didn't think it would increase by 45%!
When you say, "based on my math"... what was your math based on?
If you weren't pulling the current SEV and using the online property tax estimation calculator then it's just pulling numbers out of thin air.
Based on the 45% figure it sounds like you were making the common mistake most people make and not doing it that way.
I'm not faulting you, just trying to clear things up for others. Property taxes in Detroit don't just jump 45% out of nowhere. They can move like that when they become uncapped, but it's pretty easy to get within about 5% of what that uncapped value will be before purchasing.
No worries at all..I appreciate the dialogue!
So the assessed value and SEV value for this one was $38,400 while the tax value was only $31,500. When I ran my tax calculation, I took the SEV value ($38,400) and assumed a 5% increase to that which came out to $40,320 (28% higher than the the taxable value). The new assessed and taxable value for 2025 actually came out to $45,700 which was 13% higher than my assumption ($40,320) and 45% higher than the current table value ($31,500). I just wasn't expecting such a steep increase but maybe it makes sense considering I paid $105K for the house which was significantly higher than what the investor bought it for (he paid $46k before renovations, etc).
Do you suggest that I try to appeal the taxes? Not sure how much luck I will have, though. It's probably worth a try.
