Calculating Future Property Taxes?

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I am looking out of state for my first rental property. I live in California, which is very renter friendly. It is also high tax and high cost. However, property taxes do not go up more than 1% per year.

How do you factor in rental rates for states where property taxes may go up substantially every year?

Hi @Kai Ponte and welcome to BiggerPockets!

Predicting future property tax rates is a crapshoot at best.

Counties and municipalities typically set property tax millage rates, so you could dig into the meeting minutes of the relevant governing body looking for clues to an impending increase.

But honestly, your best bet is to just look at 4-5 years of historical data and make a simple mathematical extrapolation. So, if property taxes have been going up 2.65% for the past 4 years, maybe assume 3%/year in your pro forma and move on!