Question on Property Taxes and Insurance
BiggerPockets! Hope everyone is doing well.
I have been analyzing properties using Zillow, and follow Brandon Turner's advice to look for the "home run" number on each property (whatever purchasing price would make it a great deal). I'm noticing that when I lower the purchasing price on Zillow's calculator, the estimated monthly cost, which includes principal & interest, property taxes, and home insurance, lowers, which makes sense. The thing that's confusing me is that property taxes and home insurance estimates decrease, and I am not sure if this is accurate. So for example:
Purchase price: $120,000
Estimated principal & interest: $432/month
Estimated property taxes: $118/month
Estimated home insurance: $42/month
If I change the purchase price to $120,000, the estimates become:
Purchase price: $100,000
Estimated principal & interest: $360/month
Estimated property taxes: $98/month
Estimated home insurance: $35/month
If I am running the numbers and comparing the cash flow for purchasing for $120,000 vs. $100,000, is it a better/more accurate approach to adjust all three of these numbers, or would it make sense that only the mortgage payment would decrease? If anyone has some insight, I'd appreciate it a lot!