Hi, I'm trying to get started doing buy and hold / BRRRR investing in the DFW area, but when I use the calculators on BP there's one thing I can't wrap my head around, which is tax projections. With good appreciation comes increased taxes, and it seems like Dallas has been pretty aggressive about property valuations for tax appraisal purposes. If rent prices are going up somewhere around 1% per year but property values go up 5% (or whatever) it seems like cash flow can be completely negated by a reappraisal. When I research properties and look at DCAD, it's not unusual to see houses double their tax burden over the past 5 years. How do rental property owners in Dallas deal with that if they plan to hold on to a property long-term rather than cash in on appreciation?
@Aaron F. The most important point about property taxes in Texas is when you receive your annual bill, there is an option to contest it - do so! Whether you do it yourself or hire someone, it's a valuable exercise to contest it every year. You'll start to see that not all properties get increases each year. But with the amount of activity we've had in 2020 I imagine the counties will do their best to target most neighborhoods. Don't forget, Texas is a non-disclosure state so when the county asked what you paid for your property, it's because they don't know. They do their best to get that information from multiple sources, but ultimately it's the property owner that divulges first.