Property taxes in an inflationary environment tend to increase. However, this is not always the case. In states like California, property taxes are capped on an annual basis. Or, for instance, North Carolina, where properties are only revalued every four years. Whereas, in states, such as, Texas, property valuations occur on an annual basis and there are no caps on property tax increases.
If an investor is acquiring property, regarding property taxes, there are a couple safety measures to consider. Understanding that real estate is commonly viewed as a hedge against inflation, investors could consider jurisdictions that have property tax caps in place. On the flip side, if an investor is looking into volatile jurisdictions, you might determine you receive better pricing on your acquisition. Largely, however, it boils down to asset management throughput the deal cycle to achieve the intended returns.
Property tax projections are incredibly important to the ultimate success of an investment. Each taxing entity and jurisdiction have their own nuances. Some lean aggressive in their increases, while others are flat in their approach to property taxes on a YOY basis. Therefore, it is imperative to ally with RETC, seasoned professionals who understand these nuances. Our ability to provide you with the best information possible can have a lasting, positive impact on the preservation and improvement of cashflows.
To learn more about how property tax issues can affect your investing strategies, please reach out to Tim Feagans directly at firstname.lastname@example.org.