Property Taxes can be one of the largest fixed costs in apartment building investing. Properly accounting for them when running the numbers on a potential purchase (called the ‘underwriting’ process) can make the difference between a nicely cash flowing property and an expensive headache. Multi-Housing News has a good article with the five key questions investors should have answered before making an apartment building investment:
- How often are values reassessed? Is there an automatic reassessment triggered by a transaction?
- What is the exact millage rate? How are they set? How often do they change?
- Are there limitations to the increases in assessed values during the hold period (a la Prop 13 in California)?
- What is the timing of the assessments and when exactly are bills due?
- What is the appeal process and how long does it typically last?
Don’t let this happen to your deal: Continue reading The 5 Most Important Property Tax Questions for Apartment Building Investing