Why pay taxes on Abandoned homes

12 Replies

Am looking at the abandon homes in my area that I have been watching. These homes have been vacant for almost 12-18 months . If you look at the homes on the county website the taxes are current . Why pay taxes on a home that is vacant or unkept ? What is the benefits to the person paying the taxes ?

@Kimani Kironji Greetings,

In my jurisdiction if you do not pay taxes on a property you risk the chance of losing the property to tax foreclosure.

If there is an escrow account that has funds in it they would be paid in that manner. That’s pretty likely to be the case for properties that haven’t been vacant for more than a year.

Well, home values are increasing so fast in our area that you'd have made far more in appreciation last year than you would have paid in property tax! Maybe the owners are holding out to sell the place and they want to do zero work haha 

Also, sometimes lenders pay off taxes so the counties can't take the properties, even if the mortgage isn't being paid. 

Brandon
I would understand escrow for maybe 6 months in a Class A or B neighborhood .. am talking about class C neighborhood .
The sides or the garage roof is almost falling that’s from months and months of Mother Nature....

What’s the benefit to the property tax payer.

Ryan
I think you would relate to this areas better .. like Portland Ave and Pine st these are not really good but if you looking to pick up a buy and hold with less money this is where to pick them up .

So Ian trying to see how I can even get correspondence with the owners or title holders .. any ideas would help .

@Kimani Kironji Lenders often pay taxes on properties they intend to foreclose on. Thiis prevents loss of their entire interest in tax sale.

Tom
To understand your answer from my perspective.. it’s cheaper to pay property taxes once or twice a year than to get paid the current market value of place?

If that is the answer then please help me understand it better ... how does a lender make money then ..

Market value assumes there's a market for it.... if these are that rough maybe no one wants to buy them. Paying taxes could be cheaper than not paying them and racking up fines/penalties/interest etc; maybe it has to do with their overall tax strategy; maybe it's on auto pay; maybe someone else is paying and doesn't realize the actual condition of the property; maybe the person has a strong moral compass and feels it's the right thing to do...

But if you trying to find contact info... the tax bill gets sent somewhere to someone and it's obviously a good address if they keep paying it. 

Originally posted by @Kimani Kironji :

Tom
To understand your answer from my perspective.. it’s cheaper to pay property taxes once or twice a year than to get paid the current market value of place?

If that is the answer then please help me understand it better ... how does a lender make money then ..

This is more about limiting loss than making money.

Let's say a lender is owed $100k. The borrower/owner stops paying the mortgage because house is underwater.  They of course stop paying property taxes as well. In order to prevent the property from going to tax sale (during which process the lender's security interest could be extinguished entirely), the lender pays the $1k RE tax bill when it becomes due. When it eventually forecloses (sometimes title issues, etc. prevent a lender from foreclosing immediately) and the property sells for $40k, the lender's loss is $61k rather than $100k. 

Thank you Tom

I think am trying to find away to get in touch or communicate with the owners of this houses ... and am getting a dead end every way ...
but I will keep trying to get there information.

@Kimani Kironji Tom is probably right. However there could be other reasons. The side of the bank that pays the taxes (usually a service company) may not know what the other side of the bank is doing.  It could be an estate and the estate is paying the taxes. Sometimes bills just get automatically paid, without thought of whether it is needed any longer or not.

Presuming you know who the owner is do a "Skip Trace" Google that or something like people finder. It will cost you some money.  Sometimes it is worth paying a private investigator. That could be in the hundreds of dollars but if it gets a deal it is worth it.

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