Do you know if your property is valued fairly and what do you do if it isn’t?
When you become a landlord, whether you have one house, five houses or hundreds of houses, you need to figure out if your property is valued fairly.
Property Value Assessment
Every year, the local town or city assessor will review property values in the area and current market conditions for homes in your area that are similar. There are a variety of factors that can and do affect the assessed values of homes every single year. Then the value of your home will stay the same, will be lowered or will increase. If your assessment stayed the same, you won’t get any notice.
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Do you know if your property is valued fairly?
It is important to have your property value assessment be fair because you will pay taxes on the amount that is assessed. I am always surprised by the number of landlords and even homeowners who never bother to appeal the value of their homes! It is always worth trying to get it lowered even if you fail. In most cases it will only cost you your time.
Bombshell In The Mail
All of the revised assessments are then dropped in the mail and sent to the homeowners. When ours came in the mail this year, there were five that decreased in value which is great for the landlord paying taxes.
If you are lucky, your property value decreased but unfortunately, it usually only increases. You may be able to hear the shrieks of surprise and shock from your neighbors echoing your own cries of dismay.
Do Your Homework
After you recover from your shock, you need to sit down and study the assessment. Just because the value of your home has been changed does not mean your property is valued fairly. It is not at all uncommon to find that your 3 bedroom, 1 bathroom house with no garage has been morphed and assessed as a 4 bedroom, 2 bathroom house with a 2 car garage. You may find that your house has been moved to a nicer zip code, may have more square footage than it really does or any other number of mistakes.
Be aware that even if your property has not been reassessed, you can still appeal the value of your property.
You Can Appeal Your Assessment
Never fear if you are worried about whether your property is valued fairly or not. You can appeal your assessment, especially if mistakes have been made by the local assessment office. You also need to see if you qualify for any exemptions, especially if you are a senior citizen or a veteran. Your local tax assessor’s office can help you with that.
How Are Homes Assessed?
Your local tax assessor used to drive around and actually look at the house and the neighborhoods to get an accurate idea of the property values. However, more and more areas are switching to computer assessments. These are obviously prone to making a lot more mistakes.
In the past, you would go down the tax assessor’s office, get the paperwork in person, fill it out and either hand it over right then and there or mail it in. As times changed, you then could download the forms, fill them out and get them back to the office.
In my area, you now MUST fill everything out online. They ideally want you to attach all of the documentation to your online form and submit it. Although, if you don’t have a scanner, they will give you 24 hours to get any documentation to the office in hard copy form.
Do I Need An Attorney?
Appealing your property assessment is usually pretty straight forward. I appeal them every single year online with no issues. Plan on making a list of the properties you are appealing, scan all documentation into a folder and then log onto the site. Then I enter every property individually, upload any documentation and print a hard copy of the appeal. As long as you have the documentation already scanned in, it goes really fast.
You do not need an attorney to appeal your property assessment. Most property owners just appeal their own tax assessments so don’t think you need to hire a lawyer. The first round of appeals will be done by either filling out a form online or sending in to the tax assessor’s office.
What If Your First Appeal Is Denied?
If you are unhappy with the result of your appeal, there will be a second appeal. In our area, they schedule a hearing and you go before a board and argue your case.
I have actually had to show up at one of the second appeals and I was a nervous wreck. They were all very nice. It was a small room with three other people, all of them had computers and had stacks of papers. We went through each property, I stated my case, they said they would get back with me and I left. All very painless!
In my area, there is a three step appeal process but the third step involves filing a law suit. Sometimes you win and sometimes you lose.
Follow The Rules For Appealing
When you are pulling comparisons, you must follow the rules laid out by the local assessor’s office. Those rules (in most cases they are laws) will be listed either on the form you have to fill out or on the website you go to in order to file the appeal.
You can’t just fill out the form and say “I don’t agree with your assessment.” That doesn’t work!
One of the easiest things to provide is a list of comparison properties. In my area, everyone has access to the PVA (Public Valuation Administration) website during the appeals process. Anyone can access the system, pull up their property and then look at homes that have sold in the area during the last two years.
The requirement here is that the homes you use for comparisons must have SOLD in the last two years. These homes will usually be located within half a mile to a mile of the home I am appealing.
What Happens If Comparisons Are Not Favorable
One of the most aggravating problems is that you may think your house is assessed to high, but when you go online to get comparisons, they are all the same or more than the assessed value of your home. These comparisons will do you no good as your goal is to lower the value of your home.
Most areas will allow you to submit photos of the property, an income/expense report, an appraisal, leases, etc. I will include a list below. See what is allowed in your area and use any and all tools at your disposal to attempt to get your property value lowered.
When your assessment comes in the mail, be sure and take a good hard look at it. I know of several instances where upgrades to a home, like an added garage, a finished basement, etc., were not added which is great for the home owner. But, I know many people who appeal their assessments every year and win most of the time. Go for it! You really have nothing to lose.