Tax Assessment after purchase
Hi all,
I'm looking to put in an offer on a multi-family property soon. When running numbers on properties which seem to meet the metrics I'm looking for, I usually try to refine the numbers by getting the actual prior year tax assessment from the local assessor website.
I'm curious if after a purchase, the assessment usually changes to normalize to the sale price of the property. I seem to see a lot of tax assessments which are lower than the sales price (I don't think the sales price is inaccurate, as it's similar to other comparable homes sold in the area). Is the tax assessment usually lower than the property sales price (I'd expect the assessment doesn't include appliances, however in a duplex I'd only expect this to equate to maybe 10K), or am I thinking about it wrong overall.
Should I update my analysis to be the average property tax rate times the purchase price (this is what I'd do to be conservative, but obviously makes the numbers harder to work in this instance).
Thanks for the help
-Sam