With the onslaught of extreme’s in the World of Real Estate Valuations over the past 5 years, it is little surprise that real estate property taxes has been a sore subject for residents, investors, and even city officials. Whether your a real estate investor or not, everyone has at least over heard a discussion on the outrageous extremes one may incur between the tax value and the actual marketable value a home or real estate investment is accessed.
Welcome to my World! As a landlord of many rental properties in Charlotte, North Carolina, I have spent the better part of seven months this year appealing many of the property tax reassessments I received.
You could of called it a job.
The thought of innocent until proven guilty is almost laughable at least with this round versus the 2003 Tax Revaluation Process. The onerous burden of proof for appeal is/was definitely on the owner of said real estate. I will tell you that Garrett Alexander (Director of Charlotte Mecklenburg Property Assessments & Land Records) and the rotating Board where more then amenable and did their best in providing a warm receptive atmosphere for residents and investors (alike) in presenting their case(s). We certainly knew one another by first name by the time I finished presenting some 30+ cases. Unfortunately, the system of review was just overburdened with the case load.
First off the process of getting a proper valuation is/was very difficult. Let’s just be honest -in my initial appeals which was the first step and is a mail in process. I was lucky to get more than $2k off on properties that were ridiculously overvalued from $40 to $150k in the first place. This is the stage of the process that the Tax Appeals Board needs to look at seriously in making realistic adjustments to streamline the whole process. My honest thoughts is that Mecklenburg County set the hurdles high with the anticipation that many Mecklenburg Property Tax payers would not do what it takes for a fair hearing. Sorry guys -but it’s true as that’s how it felt on this side of the table.
We all know you’ve got a Budget to maintain and the Mecklenburg and City of Charlotte governments have certainly not tightened it’s belts like its residents have had to do. No need to get defensive -it’s true. On the other hand I can understand why valuations based on computer models may have been off; however, any truly experienced board member doesn’t need to make a tax payer go through two series of appeals (1st via mail & 2nd in person at appeals court) to see what the true value of a property is. Sure there are exceptions; however, in my experience with some 30+ properties, there certainly was a trend -and it doesn’t fair well for those whom serve us -the Taxpayers. Again, Focus on revamping the mail in appeal stage (the 1st stage) -remember all those figures provided (of a re-evaluation figure with the yellow post-it note) when we were processed in during the beginning of the 2nd stage tax appeal court hearings? Those numbers should of been taken care of in the 1st stage. Figure that system/process out and the next assessment year will be a breeze.
Now with that said, let’s look at what the Mecklenburg County Tax Assessors Office Defines as:
What is “fair market value”?
Fair market value is the price, in terms of money, that a property will bring if exposed on the open market, between a willing seller and buyer, both of whom are fully informed of all the uses, advantages and disadvantages of the property, and assuming each party acts in a prudent manner.
So now that we have that defined. Tell me how 3009 Hudson Place has a tax value of $114k? Sure it’s in Noda; however it faces the back of a pretty bleak Food Lion on The Plaza. and yes, that exact house 3 doors down to the right of fully rehabbed home with floors, granite, tile, and hardwoods was listed (in the time zone of this viewpoint) and sold for $81k. I know the house well and the rehabbers whom did the work. Now we are off by some 40% -not to mention that my documented (with pictures) $630/mo rental is nowhere comparable! Heck, it was initially valued at $169k. Guess I should feel lucky -huh.
Over-all -what were the results? I will tell you that overall I was happy as the summation of all the valuation drops created a significant lowering of monthly property tax obligations. Yes -I’m saying overall the revaluations were fair. Actually what surprised me the most was how many fellow real estate investors I know whom did not fight for a proper valuation -just like homeowners.
Folks Real Estate Investing is a business or an investment right? Sure -some say my time isn’t worth it. My initial thoughts too; however, calculate the monthly savings a proper valuation on one property (let alone many) can create. Now multiply that over the next 4-6 years. It adds up. Don’t you find yourself complaining about this $100 bill for that repair or item every month already? Take the time to appeal your Tax Valuation(s) and once it’s done it’s a monthly annuity (of savings) till the next re-evaluation.
One must be willing to go to any length if you truly want to get ahead. Let me pop the bubble. It’s more than just checks in the mail -creating wealth is work and with rentals, it is a slow, steady, long term way to financial Independence. It won’t happen if you don’t watch the bottom line.
**if your interested in more of my thoughts on the Mecklenburg County Tax Appeal or just Tax Appeals in general, leave a reply below and/or email me. I can certainly create articles based on specific scenarios and detail.
** I certainly think I should take one example of an appeal and walk through the process. Thoughts?