Strategies to Avoid Major property Tax Increases.

[Spencer Marshall]

I am curious to see if anyone else has any suggestions for how to avoid major property tax hikes after acquiring a rental property?

One of the biggest hurdles that my clients and I have had to deal with is major increases in property taxes after they make a purchase. (Reassessment years). I personally have had a few of my own deals underperform due to major increases in taxes. I have also had several clients experience major tax hikes after buying "turn-key" rentals. 

My current strategy is to do heavier BRRRR projects that allow for a significantly lower up front purchase price. My 2 most recent BRRRRs had purchase prices that were less than half of the ARV. One of those was completed prior to a reassessment year. I have found that these lower recorded sales prices significantly decrease the taxes after completion.

I am curious if anyone else out there has any creative strategies that might work for non BRRRR properties. Even if you are not trying to avoid the reassessment hike, I would still be interested as to what indicators you are looking for to ensure the taxes are as accurate as they can be. Thanks in advance!