Appealing Property Taxes: Why You Should Delegate This Task

All of us are busy and could probably list a handful of items that we should delegate in our real estate businesses.

If you haven’t appealed your property taxes before, you need to do it (at least once so you know and understand the process), and if you’re still appealing your taxes, you should consider delegating this task.

In appealing taxes, there tends to be 3 main steps: filing the appeal with the tax assessor’s office, collecting comps, and meeting with an appraiser.

The Property Tax Appeal Process

Filing the Appeal

In my area, I can email one of the appraisers at the tax assessor’s office with some brief information about my appeal and if the property is within his district, he will file the appeal. If the property isn’t in his district, he’ll help me get in contact with the appraiser I need to talk to. So with one or two emails, my appeal is filed.

In other areas, a paper version of the appeal needs to be mailed or faxed in. Typically it’s just basic property information as well as a brief space as to why you think the property is overvalued.

Once the appeal has been filed, you should receive a time and date where you can meet face-to-face with the appraiser.

Collecting Comps

If you have access to the MLS, this makes it pretty easy to collect comparable sales to justify the value that you think your property should be at. If you don’t, you can use real estate websites like Zillow and Trulia (not as thorough as the MLS) or your local county’s online search (more time-consuming).

Meeting With the Appraiser

This is normally a quick meeting that involves simply handing over the comps that you’ve collected and answering a few questions about the property, specifically its condition. I don’t recommend lying, but it seems to work best if you can emphasize the weak points of the property, such as how long the property sat on the market before you bought it due to deferred maintenance or how the neighbors next door haven’t taken care of their home.

The appraiser will then take your comps and verbal evidence into consideration and mail you a letter a few weeks later with an updated value of the home.

I’ve found that just by showing up and being prepared, the appraiser will lower the property’s value the majority of the time.

Delegating

I still handle the filing of the appeal, but delegate the collecting of the comps, as well as meeting with the appraiser to the real estate agent I work with. He’s had many years of experience in appealing property taxes. Also, his office is a short walk to the tax assessor’s office so in less than an hour, he can collect comps and meet with the appraiser.

I try to arrange as many property appeals as I can at one time so that he can appeal a bunch of a properties in one trip.

Our agreement is that we will split the tax savings for the first year 50:50. So if he’s able to convince the appraiser to lower one property’s tax by $400, I would pay the real estate agent $200 and have a cash flow gain of $200 for that year as well as a tax savings for future years. So any decrease in property tax is a large cash flow gain for the investor.

When I was working full time, I would have had difficulty leaving work to appeal property taxes. I no longer work full time, but it still doesn’t seem worth it for me to do this task, as my real estate agent can do a much better job than I can, and I have more time to find more properties to buy as well as to find money to fund those purchases.

If you don’t have anybody in mind to help you appeal taxes, start calling local real estate agents and independent real estate appraisers and see if you can find somebody who has experience and who would be willing to work with you. You can also try CPAs and attorneys who will handle these services as well.

I didn’t go into a lot of detail of the actual how-to process of appealing property taxes so be sure to check out other great articles on BP like this one from Kevin Perk.

Do you delegate your property tax appeals?

Don’t forget to leave a comment below!

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.