What Tax Amount Are You Using In Your Calculations?
Hi BP,
I have a question regarding property taxes. When calculating a BRRRR deal, I usually use the current year's property tax information as the annual tax amount. However, I'm wondering if the annual tax amount should actually be based on the projected ARV since that is what the county/city will be assessing when determining future property taxes.
I recently purchased a property (non-brrrr) where I used the previous year's tax amounts while analyzing, and then the the county reassessed the property taxes based on the new purchase price. This resulted in the annual taxes increasing dramatically and the deal not making sense anymore. Trying to avoid this type of surprise going forward so just want to know how everyone else is doing their analysis. Thanks in advance :)