Rental Property Investor · Las Vegas, NV · Member since 2016 · 83 posts · 98 votes
Hi All,
I am offering on my first San Antonio property, which is an SFR. I've had a hard time finding deals that cash flow positively because the property taxes in Texas are comparatively high.
The reason that this one works is because the assessed taxable value is low compared to many other properties I have evaluated, and even compared to comparable houses in the same neighborhood. For example, the yearly tax is $2000 less than a nearby comp with slightly higher square footage, and $1000 less than a close comp of equivalent square footage. That makes a big difference!
Can anyone tell me why this is, and how often the taxable value of property is reassessed in San Antonio?
I'm concerned that the taxable value will be reassessed (especially when I make improvements to the property), which would make the cash flow negative.
Has this happened to anyone, or do you have experience with this sort of situation?
Investor · San Antonio, TX · Member since 2012 · 77 posts · 35 votes
7y
Hey @Heather H. I would first double check and make sure that there are not any exemptions being claimed for the property. Go to http://www.bcad.org/clientdb/?cid=1 -- Search for your property, scroll down, click on taxing jurisdiction. At the bottom of that section it will show the annual taxes w/ current exemptions and taxes w/o current exemptions. You will probably not qualify for whatever exemption is currently with the property so you will need to factor the higher price in to your numbers.
The other thing I would keep an eye out for is there are several areas in San Antonio where if you move 1 or 2 streets over the values change dramatically, i.e. into a historic district. It can be really hard to tell unless you are familiar with the area. Something like this could cause the difference between your comps.
Property taxes are assessed annually in San Antonio.
Investor · San Antonio, TX · Member since 2012 · 77 posts · 35 votes
7y
Hey @Heather H. I would first double check and make sure that there are not any exemptions being claimed for the property. Go to http://www.bcad.org/clientdb/?cid=1 -- Search for your property, scroll down, click on taxing jurisdiction. At the bottom of that section it will show the annual taxes w/ current exemptions and taxes w/o current exemptions. You will probably not qualify for whatever exemption is currently with the property so you will need to factor the higher price in to your numbers.
The other thing I would keep an eye out for is there are several areas in San Antonio where if you move 1 or 2 streets over the values change dramatically, i.e. into a historic district. It can be really hard to tell unless you are familiar with the area. Something like this could cause the difference between your comps.
Property taxes are assessed annually in San Antonio.
Investor · San Antonio, TX · Member since 2017 · 344 posts · 268 votes
7y
Hey Heather,
I definitely agree with Nick on the exemptions, if the property has been a homestead for many years it will likely have lower taxes do the limitations on increase. Also, a thing that could compound over time and make a difference is disputing the property tax assessments annually. In the neighborhood association I'm active in there is always a lot of emphasis when BCAD releases the annual taxes on disputing or hiring someone to dispute the increase.
San Antonio, TX · Member since 2016 · 240 posts · 163 votes
7y
@Heather H. hi Heather, I agree with @Nick Disneytaxes are reassessed every year and yes you can count on them going up after a sale that is higher than the Bexar County Tax Assessor appraisal. The amount of taxes is a percentage of property value minus any exemptions. If it’s an investment property you won’t have exemptions as @Nick Disney mentioned.
Thanks for your input! There are no exemptions and it's not in a historic area or any other part of town where property values change dramatically street to street - it's a fairly cookie-cutter, 1980's-built neighborhood on the northwest side of town.
That's interesting about contesting the assessed property taxes annually, thanks.
Do you know if they take the state of repair of the house into consideration when assessing taxes?
From what you are saying, it sounds like there is a pretty significant risk of the taxes being adjusted to be more in line with the surrounding neighborhood.
I re-ran my numbers and used tax amounts based on the tax rate multiplied by the price I'm offering, and the projected ARV after I do some renovations. Of course the yield is thinner, but the numbers still work. I feel better about it now :)
I am offering on my first San Antonio property, which is an SFR. I've had a hard time finding deals that cash flow positively because the property taxes in Texas are comparatively high.
The reason that this one works is because the assessed taxable value is low compared to many other properties I have evaluated, and even compared to comparable houses in the same neighborhood. For example, the yearly tax is $2000 less than a nearby comp with slightly higher square footage, and $1000 less than a close comp of equivalent square footage. That makes a big difference!
Can anyone tell me why this is, and how often the taxable value of property is reassessed in San Antonio?
I'm concerned that the taxable value will be reassessed (especially when I make improvements to the property), which would make the cash flow negative.
Has this happened to anyone, or do you have experience with this sort of situation?
I would really appreciate your thoughts! Thanks!
Not sure where did you get the info of property tax paid. These are public records and you can look-it up. Do a Google search: Bexar County Tax Assessor, then type-in the property address, then you get the report. There are exemptions such as homestead, etc., but the % for each category doesn't change. Do the math for the selling price. Also in some areas, where School District is on another county, it will not be in the report, be sure to take this in consideration if you don't see the school district tax.
San Antonio is very active assessing the property value each year, basically each year you will pay more and more taxes. Be sure to protest these, they are a little bit forgiving if you go with a good attitude. If you protest and they re-assessed the value, they can't go higher than that on the next year. So do it every other year and your taxes will be lower than just paying what they assessed.
Thanks for your input! There are no exemptions and it's not in a historic area or any other part of town where property values change dramatically street to street - it's a fairly cookie-cutter, 1980's-built neighborhood on the northwest side of town.
That's interesting about contesting the assessed property taxes annually, thanks.
Do you know if they take the state of repair of the house into consideration when assessing taxes?
From what you are saying, it sounds like there is a pretty significant risk of the taxes being adjusted to be more in line with the surrounding neighborhood.
Yes they will if you show pictures that your house needs 50K in reno vs the comp at a way better state. All depends on the assessor doing the interview with you. You are correct, taxes will be adjusted with the comps and recent sales. If you go and protest, make sure you have a good list of properties within the same subdivision if possible. When I went to protest one time, I couldn't find good comps, ended up with a nice assessor guy meeting me in the middle of the previous year taxes and current assessment, it was a WIN for me. They will show you 10 comps in details on each property, down to the 0.01% value difference.