Do you ever feel like you're paying more than your fair share of property taxes? You're not the only one. Many people believe that their homes are over-assessed, and guess what? According to the National Taxpayers Union, a good amount of homes are over-assessed between 30 percent to 60 percent. This applies to commercial property as well.

The sad news is that only about 2-3 percent of homeowners make an appeal for it. This statistic is quite surprising because the process of appeal is quite simple and has a 20-40 percent success rate.

Below are some steps that any homeowner may take to appeal his/her property tax assessment - provided by AOL Real Estate

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• Get your property card. First, get the information in the assessor's file about your home from the property card, which will include the method and data used to determine its value, its lot size, square footage, any known upgrades, and of course the number of bedrooms and baths. Do not take no for an answer. Some assessors may try to tell you that you can't see this information, but it is a public record and you have a legal right to see it.
• Check the accuracy of information. If you turned a closet into another bathroom, or converted an attic into a fourth bedroom, or knocked down a wall to change two small bedrooms into one large master suite, these improvements should be reflected on the property card. If the card is inaccurate, a new property assessment could bring it's value up rather than down. The same is true if the assessor thought you had an aluminum siding and brick exterior like your neighbors, when in reality you have vinyl and stucco, and that bathroom addition was done by the previous owners 10 years ago.
• Understand the math. Property tax assessors' offices vary in how they determine a home's value. Some base it on recent sales data from similar homes, others may estimate the cost to rebuild or use a combination of methods. Some incorporate tax breaks for homesteaders or farmers. The assessor may use the full determined value, or a percentage, such as 90 percent of the actual assessed value. (This is why sometimes assessed values of your home can be less than what they sell for -- if this happened in your case, don't worry, you can still qualify for a reduction.)
• Get comps. You can get sales data from Zillow.com and ListingBook, or a Realtor. Just be careful not to use estimates based on current listings. Instead use actual "sold prices" for the time period you're evaluating. The assessor's office also might have this data available. You will need a minimum of 3 to 5 homes, but there should be no need for more than 10 homes in your comparison.
• Use the correct assessment date. Make sure your property tax assessment is for the same date the assessor used. If the county assessment was for, say, January but you used data from April, your estimate may be considered inaccurate and your case could be dismissed.
• Consider using a professional report. Now, granted, the cost of any savings you make would be offset by what you pay to a professional, but depending upon how much you're looking to save, this could be worth it. Appraisers can charge anywhere from $200 to $500, and property tax consultants typically work on a contingency for 25 percent of the savings. If you recently refinanced your mortgage or had a home equity loan, you might already have access to a professional appraisal.
• Prepare your document. After reviewing the data you gathered, determine if you can prove that your property was assessed at a higher level than the legal standard or at a higher value than the level of nearby comparables. If so, prepare your argument on paper. When you can do so honestly, agree with much of what the assessor did and stress that you do not question the assessor's sincerity. Just point out the differences in valuations you found. Avoid calling for the assessor's head on a stake, or pointing out that your taxes pay the assessor's salary, or just calling the assessor incompetent.
• File the appeal on time. Make sure you appeal during the right time-frame. Typically you will have 60 days from the time your annual tax assessment was mailed to you, which is usually during the first three or four months of the year. Hand deliver the packet so you can get a stamped receipt, or use certified mail. Both will give you an office date of delivery. You don't want to lose your case because you didn't file on time.
• Wait for a response. Property tax appeals can take place through hearings in which the homeowner personally makes a case before a local board of officials. Your officials will notify you by mail of a hearing date. However, some governments handle the entire appeal by mail, and you simply receive a decision on your appeal in the mail a few weeks later.
• Attend hearings. If your area handles such appeals with public hearings, attend a handful of hearings from other property owners before your date arrives. This gives you a chance to see if the board members raise any issues that you may not otherwise have been prepared to answer. Should your first appeal fail, or should another appeal become necessary, most states allow three levels of appeal in property tax cases. Typically, a state agency is the second level, with the courts reserved for the third level of appeal. Very few homeowners find it necessary to go to court for relief.

If you need more information, the NTU has a consumer brochure, "How to Fight Property Taxes," which is available for download from its site for a small fee. It covers everything, including what to say at a hearing.

To view the original article, click here: http://realestate.aol.com/blog/2010/06/25/how-to-lower-your-property-taxes/

Labels: Appeal, Lower Property Taxes, Property Taxes

CNN Money recently published an article that talks about why property investment is hot right now. Read the article below:

THE CASE FOR BUYING NOW

Many factors make this a great time to invest. Mortgage rates are at a 40-year low, and homes in many areas are ultra-cheap. Meanwhile, demand for rentals has risen in more than 500 cities, according to recent Census data. That, in turn, has enabled landlords to charge more. Hotpads.com, a real estate research firm, reports that rents nationwide jumped 11.6% in 2010, to $1,320 a month.

You’ll need that rental income to tide you over until home prices bounce back; in fact, the typical investor today plans to hold for 10 years, according to a survey by the National Association of Realtors.

If you can hang on that long, you’ve got a good shot at solid gains, especially if you’re financing the home purchase. “Whereas leverage is dangerous when buying stocks, it can be a good long-term strategy with real estate,” notes real estate investor and Columbia University adjunct finance professor Marshall Sonenshine.

The big catch: “Can you afford to hold the property that long and not need the equity for your kid’s college fund?” says Sonenshine. Or whatever other pressing need might crop up.

You’ll also face some tough financing rules. Most banks now require a down payment of at least 20% to 25% and evidence you have enough cash to cover six months’ worth of mortgage, tax, and insurance payments.

HOW TO FIND A GOOD DEAL

Investment real estate is like produce: It’s best bought locally. “Buy something you can get to in 10 minutes,” says Seattle real estate investor Bill Snyder.

Familiarity with the neighborhood also limits nasty surprises like a noisy bar or a nearby development competing for renters.

Work with a local realtor who has experience with rentals and can help you assess how attractive a given home will be to tenants.

And while prices on multifamily dwellings haven’t dropped as much as they have on single-family homes, don’t ignore plexes: Intake from a few rents instead of just one will boost your cash flow; a single vacancy won’t hurt as much; and you could benefit from economies of scale for things like appliances and painting. But stick to buildings with four units or fewer to avoid stricter financing requirements, such as a bigger down payment and higher mortgage rates.

Once you’ve identified candidates, crunch the numbers. The goal: to make sure your rental income will at least cover your loan payments, plus a 20% cushion to handle repairs, vacancies, and property management.

To figure out what you’ll garner in rent, ask sellers for recent leases, says Snyder, and double-check their numbers by perusing sites like Rentometer and Craigslist for similar rentals in the neighborhood.

Assume your mortgage rate will be at least a half-point higher than rates on owner-occupied properties. Factor in insurance and property taxes, and bank on a 5% vacancy rate. Otherwise, “one empty month can kill you,” says Ellie Berlin, a broker with Houlihan Lawrence in Larchmont, N.Y.

KNOW WHAT YOU’RE IN FOR

Brush up on your people skills: Owning rentals also means responding to tenant complaints, like the 2 a.m. phone call about a broken toilet. Want to palm off the grunt work? You can hire a handyman (around $45 an hour) or a management company (8% to 10% of monthly income plus a half-month’s rent for filling vacancies), but the luxury will eat into cash flow.

To find your own tenants, creative ads on Craigslist are your best bet. Run credit and reference checks (National Tenant Network, at ntnonline.com, can help). And invest in small touches to make your place stand out, such as cool lighting fixtures or antique door hardware. Those will pay off when it’s time to sell too.

View the original article here:

http://money.cnn.com/2011/08/30/real_estate/rental_property_investing.moneymag/index.htm?iid=SF_M_Lead

Labels: Real Estate Investment

With economic times like these, it's important to think about what actions will give you more bang for your buck. We're featuring an article provided by the California Association of Realtors to help you determine what's worthwhile for you.

This year, California real estate market conditions make a strong and compelling case for homeownership. With prices still well below the historic highs of just a few years ago and attractive mortgage rates, qualified buyers have a unique opportunity to own their own home. As seen below, a rigorous analysis of renting versus buying hears this conclusion out. As shown in the following chart, the monthly housing costs (principle, interest, taxes, and insurance or PITI) associated with buying a median-priced home of $301,430 is $1,590 (Fourth Quarter 2010 median priced home in California).  This assumes the buyer is making a 20 percent downpayment and financing with a 30-year fixed rate mortgage at 4.62 percent. In comparison, the median rent on a three-bedroom two-bath apartment with renter’s insurance in California is $1,810. That means buying a home would save the homeowner $220 per month when compared to renting and the homeowner would save over $2,600 a year.



In addition, existing tax laws allow homeowners to itemize and deduct the mortgage interest and property taxes from their taxable income. For example, compare the tax implications for two households both earning $63,430 a year, the minimum income required to purchase the statewide median-priced home of $301,430.* The household that purchases the home with a 20 percent downpayment and finances the mortgage at the current rate of 4.62 percent will receive a tax deduction of over $14,000 in the first year of ownership. The renter household will most likely utilize the IRS Standard deduction of $11,400, $2,600 less than their homeowner counterparts. The homebuyer reduces their total tax liability by $400 compared to the renter in the first year of ownership. Accounting for the out-of-pocket savings as well as the tax savings, the homebuyer saves over $3,000 in their first year of ownership.



The mortgage rate is a significant factor in determining just how much a homebuyer can afford. Today’s low mortgage rate environment tips the scale—for some—in favor of buying versus renting. For a home priced at $400,000, with a 20 percent downpayment and a 4 percent mortgage rate, the monthly PITI will be $1,990 for the homebuyer. The monthly PITI jumps to $2,180 at 5 percent and to $2,380 at 6 percent. For each one percentage point increase in the mortgage rate, the payment goes up by almost $200 under these assumptions. Even for a lower priced home at $200,000, the difference in the monthly payment is significant as each percentage point rise in the mortgage rate tacks on $100 to the monthly PITI.



Of course, there are many other socioeconomic benefits that homeownership brings to communities. And there are other costs associated with homeownership above and beyond the downpayment and monthly PITI. So as long as one has considered all of the costs and benefits of owning a home and is in the financial position to do so, there are some pretty compelling reasons to strive for the “American Dream.”

Labels: Buyer, Buying, California Association of Realtors, Mortgage, Rent, Renter, Renting