Surviving a Recession in the Real Estate Business (Part 1)
Posted By admin on October 29, 2009
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To survive a recession, you have to do as many businesses do reduce your expenses. When you have a portfolio of properties you may be wondering what expenses you can reduce. There ae a least two major expenses tha you can reduce with a little work and research. One of those expenses is the property taxes. The other expense is insurance premium. You may be thinking that is only two expenses that is not going to do much. Well, hold on. Let’s examine the business. The business has accounting, legal, and maintenance. Those are other areas where expenses can be reduced, and we will explore ways to reduce of those areas over the next couple of days.
To reduce your property taxes, you must determine what the assessed value is for each of your properties. In most states, the assessor may be using some variation of market value. With the recent depreciation in market value, it is apparent that the assessed value does not match the current market value or for that matter the amount that you may have paid for the property when you purchased it. The reason the assessed value does not match the current value is that most states re-assess value every four years. Still yet, some states use a trending or error equalizer to correct the assessed value. This method does an annual adjustment of the assessed value due to changes in the market value. The error equalizer may or may not fairly account for the impact that the recent increase in foreclosed and short sale homes has on market value. The foreclosed and short sale homes have had an negative impact on the value of all properties that are for sale. Therefore, it is doubtful that the error equalizer can account for the influx of these types of homes or the negative impact on property value. That is why a property tax appeal may be recommended. Please review the videos below for details on filing procedures in Indiana:
Once you determine that the assessed value is higher than the current market value. You will need to file an appeal. For the appeal process, you will need the legal description of the property, the parcel number, the current assessed value for both the improvement (ie house, apartment, condominium, etc) and the land. This information is available on the assessor’s website. If the town that the property is located in does not have a website call the assessor’ office to ascertain the information.
To read more on the assessed value, read What is Assessed Value and How Does it Influence My Property Tax.
You will also need to get an appraisal of the property. When hiring the appraiser, explain to the appraiser that you are filing an appeal and may need his or her to testify to explain the appellate committee the finding or evaluation of the appraisal.
Tomorrow and several days to follow, we will evaluating other ways to make money, reduce expenses, and increase income with properties that you currently own, so keep reading.
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I just wanted to drop you a line and let you know that I really have enjoyed your well-written articles. I have bookmarked this site and will definitely be checking back for new posts.
Thank you for sharing all this. I really hope that they do something about this.