Cleveland Cash Flow 3 - Property Taxes and Your Net Returns

In this world nothing can be said to be certain, except death and taxes. - Benjamin Franklin

If you own real estate, you know the local property tax authority is coming to you every six months asking for a paycheck. Property tax expense is a given. It’s one of the first expense items to underwrite on a deal, and far too often catches new investors off guard.

For starters, taxes are not fixed to a specific amount, nor are they going to be the same amount as last year’s tax bill. The amounts you see on the MLS / online listings are often times useless. In the Cleveland area, taxes run in arrears, and payments made in 2020 are based on 2019 tax rates. Each local community has its own set property tax rate, which when multiplied by the market value (purchase price if you’re buying a property) will give you the tax amount due in the upcoming year, before any assessments. The real formula is based on assessed values and mill rates, but the foregoing is a more simple approach to calculating taxes.

Below are the list of commercial & residential property tax rates per municipality, to use in your underwriting.

Bay Village:                                       Residential 2.73%           Commercial 3.14%

Beachwood:                                     Residential 2.17%           Commercial 2.46%

Beachwood/Warrensville:             Residential 2.95%           Commercial 3.26%

Bedford:                                           Residential 2.68%           Commercial 3.07%

Bedford Hts.:                                   Residential 2.69%           Commercial 3.07%

Bedford Hts./Orange:                     Residential 2.73%          Commercial 2.97%

Bentleyville:                                     Residential 2.79%           Commercial 3.08%

Berea:                                               Residential 2.56%           Commercial 2.92%

Berea/Olmsted Falls:                  Residential 2.67%          Commercial 2.82%

Bratenahl:                                        Residential 2.83%           Commercial 3.10%

Brecksville:                                       Residential 2.31%           Commercial 2.59%

Broadview Hts.:                               Residential 2.38%           Commercial 2.67%

Broadview Hts./North Royalton:  Residential 2.38%           Commercial 2.42%

Brooklyn:                                          Residential 2.67%           Commercial 2.69%

Brooklyn Hts.:                                  Residential 1.76%           Commercial 1.91%

Brook Park:                                      Residential 2.32%           Commercial 2.65%

Brook Park/Cleveland:                   Residential 2.55%           Commercial 2.80%

Chagrin Falls Township:                Residential 2.60%            Commercial 2.84%

Chagrin Falls Village:                      Residential 2.80%           Commercial 3.16%

Cleveland:                                        Residential 2.79%           Commercial 3.05%

Cleveland/Berea:                            Residential 2.56%           Commercial 2.90%

Cleveland/Shaker Hts.:                  Residential 4.04%           Commercial 4.79%

Cleveland Hts.:                                Residential 3.80%           Commercial 4.45%

Cleveland Hts./East Cleveland:     Residential 3.25%          Commercial 3.70%

Cuyahoga Hts.:                                Residential 1.76%          Commercial 1.91%

East Cleveland:                                Residential 3.25%          Commercial 3.70%

Euclid:                                               Residential 3.07%           Commercial 3.52%

Fairview Park:                                  Residential 2.74%           Commercial 3.09%

Fairview Park/Berea:                      Residential 2.53%           Commercial 2.87%

Fairview Park/Rocky River:            Residential 2.41%           Commercial 3.21%

Garfield Hts.:                                   Residential 3.93%           Commercial 3.77%

Garfield Hts./Cleveland:                Residential 3.28%           Commercial 3.53%

Gates Mills:                                      Residential 2.65%           Commercial 2.93%

Glenwillow:                                      Residential 2.44%           Commercial 2.88%

Highland Hts.:                                 Residential 2.39%           Commercial 2.63%

Hunting Valley:                                Residential 2.59%      Commercial 2.83%

Independence:                                Residential 1.86%           Commercial 1.92%

Lakewood:                                        Residential 2.93%          Commercial 3.58%

Linndale:                                           Residential 2.49%          Commercial 2.74%

Lyndhurst:                                        Residential 2.95%          Commercial 3.15%

Maple Hts.:                                       Residential 3.71%          Commercial 3.65%

Mayfield Village:                              Residential 2.40%          Commercial 2.65%

Mayfield Hts.:                                   Residential 2.58%          Commercial 2.81%

Middleburg Hts.:                             Residential 2.32%           Commercial 2.66%

Moreland Hills/Chagrin Falls:        Residential 2.89%          Commercial 3.23%

Moreland Hills/Orange:                 Residential 2.39%           Commercial 2.63%

Newburgh Hts.:                               Residential 3.38%          Commercial 3.60%

North Olmsted:                               Residential 2.83%           Commercial 3.17%

North Olmsted/Olmsted Falls:      Residential 2.69%          Commercial 2.82%

North Randall:                                 Residential 2.96%          Commercial 3.28%

North Royalton:                               Residential 2.27%          Commercial 2.31%

North Royalton/Brecksville:          Residential 2.27%           Commercial 2.55%

Oakwood:                                         Residential 2.14%          Commercial 2.52%

Olmsted Falls:                                  Residential 2.60%          Commercial 2.74%

Olmsted Falls/Berea:                      Residential 2.46%          Commercial 2.80%

Olmsted Township:                          Residential 2.97%           Commercial 3.19%

Orange:                                             Residential 2.28%          Commercial 2.51%

Orange/Warrensville:                     Residential 3.04%          Commercial 3.35%

Parma:                                              Residential 2.50%           Commercial 2.67%

Parma Hts.:                                      Residential 2.59%           Commercial 2.75%

Pepper Pike/Beachwood:                Residential 2.33%           Commercial 2.61%

Pepper Pike:                                     Residential 2.35%          Commercial 2.57%

Richmond Hts.:                                Residential 3.10%          Commercial 3.28%

Richmond Hts./South Euclid:          Residential 3.08%           Commercial 3.30%

Rocky River:                                     Residential 2.39%           Commercial 3.17%

Seven Hills:                                      Residential 2.69%           Commercial 2.81%

Shaker Hts.:                                     Residential 3.95%           Commercial 4.71%

Solon:                                               Residential 2.45%           Commercial 2.89%

Solon/Orange:                                Residential 2.17%           Commercial 2.42%

South Euclid:                                   Residential 3.17%           Commercial 3.40%

South Euclid/Cleveland Hts.:           Residential 3.99%           Commercial 4.67%

Strongsville:                                     Residential 2.37%           Commercial 2.57%

University Hts.:                                Residential 3.82%          Commercial 4.48%

Valley View:                                      Residential 1.83%          Commercial 1.98%

Walton Hills:                                     Residential 2.12%          Commercial 2.50%

Highland Hills Village:                     Residential 3.38%          Commercial 3.49%

Warrensville Hts.:                            Residential 3.01%          Commercial 3.34%

Warrensville/Orange:                      Residential 2.25%          Commercial 2.50%

Westlake:                                        Residential 2.02%          Commercial 2.19%

Woodmere:                                      Residential 2.19%          Commercial 2.43%

Disclaimer: B2B Realty does not doubt the information presented, however makes no guarantee of the accuracy of the data presented. All information provided is deemed reliable, but is not guaranteed and should be independently verified.

About the Author

Jad Boudiab is the CEO at B2B Realty, a Cleveland based real estate & property management company servicing local and out of town investors. Jad is an Ohio licensed real estate broker, a sales coach, and small to mid-sized apartment investor. He has consulted with hundreds of private clients on their investing strategies in Cleveland, and helped many new realtors and investors find their way in real estate.