Property taxes and assessed values

2 Replies

Hey BP community. I can’t express enough how much I appreciate this resource. I have a question. I am in escrow on my 3rd rental. This will be the 2nd in Cleveland OH. I’m curious to know how and what I should expect regarding the assessed value of the home after it is purchased. For example. It is currently assessed at 40k and after rehab and paying off city violations I am purchasing at 81k. I already have the proposed 2018 tax amount and it fits well in my calculation for COC return however my question is if and at what point will the county reassess based on the higher purchase price and will the assessed value double essentially doubling the tax? I’d love some input from veteran experienced investors.

The simple answer is yes.

In more detail now; I am guessing that your are buying from a flipper / turnkey (i.e. post-rehab) and that 81K is what will show up on the HUD-1 form later this year when you close. So you should expect the school board to take note of the transfer / price and launch an appeal of the valuation to the purchase price.

Hope the even with the higher taxes, property still hit the returns you expect.

Oren

@Michael Lewis Supposedly values will be reassessed county wide this fall, so definitely count on your taxes rising.   However, it has been my experience that assessed values tend to lag behind retail value and I have overestimated my property taxes in Cleveland each time I have purchased, so it might not be too drastic a raise.

Just a heads up, I am organizing a meet up for LA investors interested and/or actively investing in the Cleveland, OH market.

Wednesday 9/5/18 at 7:30PM

EP/LP Rooftop Bar

603 N. La Cienega Blvd

West Hollywood, CA 90069

The event will just be a meet and greet of like minded folks. No Guru presentations, just an informal gathering. Conversations will not be only limited to Cleveland, so if you know another investor who might also be interested in networking, feel free to let them know about the event.

If you plan on going, please make sure to hit the "going" tab under the upcoming event listing on the main page.

Hope to see you there!

John

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