As investors we have to watch numerous indicators to insure we make a profit when we buy. Knowing the value of a property is extremely important. Today the adjustment in property tax values is for once a viable market indicator.
Knowing the true value of real estate is critical, try to do a deal without it and see. The guidance and data within REIAComps has consistently shown investors how to determine both solid acquisition value and after repair value to earn lasting profits.
Property values nationwide continue to rebound, according to numerous local and national reports. The taxable value of real and personal property nationally has increased 2.38 percent from 2014 to 2015.
Of the 10-20 reports I regularly review, they show the assessed value of real estate, which is 50 percent of market value, increased 2.75-3.0 percent. Translation, the real estate market is still up, although it is a gradual, slow increase.
This is the second consecutive year the country has experienced healthy gains in the taxable and assessed values of property in many market areas. The gains are welcome news to county and local officials after values were flat or declined during the long economic downturn that began in 2007.
We know taxable value is the basis for determining property taxes, which provide the largest source of revenue for the county and other taxing authorities. Many county equalization department's function is to review assessments conducted by local units to be sure they are fair and equitable. These increases will help insure the resources to maintain municipal infrastructures are sound. Good streets and schools, etc. make for healthy neighborhoods where we can profit from retail flips.
Now typically, we don’t use tax values to determine the best acquisition value and certainly not After Repair Value(ARV). However, the change in tax values, which are easy to track on your REIA Comps property reports, provide a clear indicator of what trends are taking place in your market area.
As you build and grow your business, make sure to keep an eye on property tax values. The use of REIAComps to determine the best acquisition and ARV for every deal you look at is the best real estate decision you will ever make. Don’t for one moment let someone tell you the value of a deal. Use the six musts and let REIAComps show you the value for yourself. Now go make some money!