Investor · Indianapolis, IN · Member since 2016 · 232 posts · 133 votes
Guys, I was sifting through public records on a condo unit in a decent - up & coming, safe neighborhood. I noticed that the "Land value" on record has dropped from almost 10k to 1.5k but the interior upgrades that were done to the condo steadied the ship a little bit.
Cash flow is pretty steady and I'll make 2%. but the land value drop is baffling me and I can't think of any plausible cause. While i'm still in talks with my agent to dig up more info on this, I was wondering if anyone of you ran into this? Is this a red flag and if it is, how?
From the IRS standpoint, land does not get depreciated ;)
Sounds like the tax assessor re-evaluated the property value, and made adjustments. A condo really doesn't come with any land of its own; the land is owned in common with all other units. Since you don't depreciate land portion of the property for IRS tax returns, does not seem like that big of a deal unless land all around that neighborhood has gone down.