Commercial Real Estate Appraisal: How to Reduce Commercial Property Taxes
As a commercial property owner, you may be used to setting aside a large portion of your budget for property taxes each year. You may not even be shocked to see such a large number each year on the “property taxes due” portion of your tax statements.
Property owners may view this as a set cost. Most just pay the bill and move on.
However, when considering your own budget and finances, it’s important to intentionally look for ways to increase your ROI (return of investment). If you want to have a large impact, searching for ways to reduce your property tax expenses can make a significant change.
The cost should not always remain the same. View your taxes the same way you view an electricity bill: it’s always changing.
Commercial Real Estate Appraisal: What You Can Do as a Commercial Property Owner to Reduce Your Commercial Property Taxes
1. Know What You’re Paying
If you’re responsible for multiple properties, it may be difficult to pay attention to how much you are paying in commercial property taxes. It is very important to pay attention to these costs and to intentionally search for ways to lower the cost by way of appeals.
2.
Market Value Vs. Assessed Value
Texas property taxes continue to increase despite the fact that revenue has decreased while operating expenses increase. Appraisal districts typically value a multitude of properties. Therefore, they are usually unaware of a “softness” in submarket.
Appraisal districts are also slower to see when their insurance expenses have increased. Reviewing assessments annually is becoming increasingly important to investors. In an effort to reduce these commercial property taxes, some investors may decide to appeal yearly. Take advantage of this appeals process in an effort to save money.
3. The Importance of Property Taxes
In an effort to decrease property taxes, most property owners are unaware of their rights. Property taxes are one of the largest item of expense by property owners.
Did you know that the Texas Property Tax Code actually allows property owners to search for an equity adjustment based upon other properties that are comparable and appropriately adjusted?
4. Discounts for Early Payment
In some jurisdictions, there are incentives when early payments are made. Research taxing jurisdictions on your own property and look for these incentives that could possibly give you a discount on commercial property taxes.
5. Knowledge
Educate yourself. Knowing the details of your property, how much they are worth, the locations, the square footage. Compare it to other properties that are similar in the jurisdiction of your own property.
Meet with your own local property tax assessor. Bring this knowledge of your own property to them. You could also hire someone to evaluate the status of your property.
Hiring someone could save you the time as these experts have the knowledge to search for an excellent tax return for your own investments.
Properties may not be assessed equally. This could be caused by several things: data errors, a focus on recent sales, inconsistencies, etc. The owner should know the market value of their property and compare it to the total assessed value.
If you discover that the assessed value to be higher than market value of your property, your next step should be to protest this with your local appraisal district. You could either do this yourself as the property owner or designate an agent to do this for you.
Commercial Real Estate Appraisal: Every Bit of Saving Helps
Every bit of savings helps. You could save thousands in property taxes if you search for ways to reduce these costs. Do your research. Hire someone to help you if necessary. Increase your ROI by making a significant change.
Your property taxes are perhaps the most expensive cost in your commercial real estate. Lowering this cost could be extremely beneficial to you. It is well worth the time and effort to search for ways to decrease this cost.
We would appreciate the opportunity to add you to our very long list of pleased clients. You can give us a call or click here to fill out our Free Quote Appraisal Form.
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