Hi, my name is Frank and I'm new to BP, looking to start investing out of state in Indianapolis. I've identified a few properties I have been interested in and have done some analysis using the BP calculators but I'm struggling to calculate the taxes.  When I look up properties on the tax assessor's website the tax assessed value is really low ($10k to 20k) which results in a very low tax amount. From the research I've found, the tax for rental properties in the district I'm mostly interested in (District 101) the tax rate is capped at 2% of the assessed value. My question is for any investors in Indianapolis or other out of state investors who are investing in Indianapolis, what is assessed value of a property? How is it calculated? I'm assuming that the assessed values I'm seeing were the values based on when the houses were distressed and pre-rehab? Is it safe to assume when I purchase a property that the taxes will be re-assessed based on a combination of the sale price and the neighboring market?  I see all these pro-formas on the marketplace with monthly taxes of $30/month.  But this appears to be based on an assessed value of  $17,500 with a 2% cap tax rate.  Is it a good assumption when performing my rental analysis to use a "new" tax amount based on 2% of the purchase price? Or is that being too conservative? Using this "new" tax amount, I haven't been able to get any perspective properties to cash flow more than $50 to $100 per month and the cash on cash return on investment has been around 5-7%. I'm trying to get a minimum of $100/month cash flow per unit and a minimum cash on cash return on investment of 10%. So where am I going wrong? Or do I simply have to keep analyzing more properties and I just simply haven't found the right one. Thanks

@Frank Sousa Indianapolis is not like CA where they reassess the property based on the sales price at transfer of title. They reassess every 2 years based on what market values in the area are at the time. Unless you've increased the footprint of the house or increased the number of rooms, a renovation is not generally going to increase you assessed value. The tax assessor doesn't look at whether the property got a new roof, HVAC, kitchen cabinets etc which is what most rehabs consist of. They are going to base it on what overall values are at the time of re assessment. 

I'm also interested to learn more about this.  Thanks for your answer @Mike D'Arrigo .

@Frank Sousa This is a question I love getting from out-of-state folks. Indiana property tax is assessed as 100% of the amount you see on the property record card you can find here. 

Primary Residences = 1% tax rate

Other Residential Properties (rentals, apartments, vacation homes) = 2% tax rate

All Commercial Properties (retail, industrial, office) =3% tax rate

Therefore, the amount you see on the property record card, multiply that number by 2% and you should have a very good estimate on what the tax is (or will be once corrected). Indiana IS NOT ASSESSED BY TRUE MARKET VALUE, but rather "market value-in-use" which essentially means "what would another similar user pay for the same utility of the property?"

Therefore, while a property may be worth $100,000 on the open market, a similar investor may only pay $80,000 to achieve the same gross rent multiplier, therefore the property is assessed at $80,000. @Mike D'Arrigo had it somewhat correct in that Indiana does not reassess every year, but rather every four (4) years. One of Indiana's four (4) assessment districts receives a "trending" factor each year, pushing it in the general direction of the market, paired with a formal reassessment and full-blown adjustment of its value every four.

I formally negotiated commercial property assessment appeals for large student housing facilities and industrial projects. Indiana is its own monster!

Happy to chat more should you have any questions.

thank you @Mike D'Arrigo @Evan Manship I have used the property cards you referenced and the property I have targeted and put an offer on has a very low assessed value $17,500. Being from California, and being accustomed to having the taxes re-assessed at the time of purchase at the amount of the sales price, I got sticker shock at what this investment property would be re-assessed at. 

The target property in question appears to have been fully renovated in 2014, so perhaps it will be re-assessed soon? Could be the seller's reason for selling now? I'm just worried that my analysis using the current tax rate makes it look like a "no brainer" acquisition. But if the taxes go up 10x I can't make it work and that is what makes me nervous, especially with this being my first out of state purchase.