taxes after rinsing and repeating

[Elvin Torres]

Hi everyone. how do you deal with property taxes after you rinse and repeat several times? meaning you buy a single family home, live in it for one year and then rent it out, and do that same thing several times, since if you move, that residense will no longer be your primary residence, and you can no longer claim property exemption/homestead exemptio? depending on your location, that could be a few hundred dollars a month in extra expenses.  

[Stephen Morales]

Quote from @Elvin Torres:

Hi everyone. how do you deal with property taxes after you rinse and repeat several times? meaning you buy a single family home, live in it for one year and then rent it out, and do that same thing several times, since if you move, that residense will no longer be your primary residence, and you can no longer claim property exemption/homestead exemptio? depending on your location, that could be a few hundred dollars a month in extra expenses.  

 Hey Elvin, 

Nice to see someone from the 904. Luckily, in the state of FL you have homestead portability. You can "port" your differential to your new primary residence. 

For example: Your original home had a market value of 300k but was assessed at 200k under homestead, you carried a 100k differential, and when you file for homestead on your next house you can cap its assessment by the same 100k differential. 

Now since you no longer have the exemption the rental you need to leverage rental property tax deductions to offset the new out of pocket costs. You deduct your property taxes every year along with all the regular expenses you can expect (insurance, management, mortgage interest, other fees etc.) 

The best way to deal with the increase is to underwrite your deal with the anticipation of the increase in property taxes. 

It's like they say, in real estate you make your money when you BUY.