I’m updating this article.
Below is the original posted 3 yrs ago. This has long been a problem. Why? While I can appreciated ‘work load’ as a reason, it eventually becomes and excuse if its not dealt with on the assessor/ local /state government end. Assessors by-pass state law &/or take advantage of their position to frustrate property owners into being unfairly over taxed. Via interviewing property owners and walking thru the process for clients, I witness first hand the ugly side of the process. I’ll not speculate to far on the gov’t employees side of this – you can figure it out for yourself – but what is the results of over taxation and undue burdens associated with ‘tax protests’ ?
Instability. Show me one neighborhood that prospers from having homeowners uprooted. Getting these properties properly and fairly assessed brings a long term increase in the value of an area. At that point, values and assessments can rightly follow. Why is this so a hard message for the local assessor and his boards of review to understand ?
Original article from 2004 –
According the Detroit News, there is a large inequity from property to property. This is true in most large cities in MI. Further, the local board of review personnel often doesn’t know how to or refuses to assist you, the taxpayer they work for, in the process. The article leaves out important details of interpretation. Don’t assume the house you buy will change property taxes for the better – DO assume they will change with ownership change. We can chat further.
Detroit— Detroit is over-assessing homes by an average of 65 percent, leading to higher tax bills, according to a Detroit News analysis of more than 4,000 appeal decisions over the past three years by a state board.
So much talk of lead in the drinking water in Flint MI these days. Well, I’ve owned 2 homes in Flint. I have the same wisdom for those folks as anyone who buys a home built pre-1986.
I recall when I built a home, coincidentally in 1986, that I had to switch from a lead solder to a tin solder. It doesn’t flow the same. But, the point is, per “The Safe Drinking Water Act Amendments of 1986”, homes built before `86 tend to have lead joints so it makes sense to drink & cook with filtered or bottled water. I do.
The law prohibited use of lead solders, pipes, and flux in drinking water systems. Plumbing solder lead content was set at 0.20% maximum. ( previously 50/50 mix w/ tin). It also included wording to require states to enforce the provision.
Jumping into investment real estate this year ? Good info with a quick easy read, my basic criteria for useful information:
Here’s a huge oversimplification of the article links shown below:
ROI – your rent should be at least 1% of the purchase & set-up cost of your rental. e.g: You paid $85k to buy and rehab, it better rent for $850. Further, expect around 50% of the rent to be expenses (less if you have a mortgage).
My add to the thoughts: Annually evaluate your properties against each other AND against what else you could swap the lesser performing houses for. i.e: You can sell it for $200k/ it rents for $1250/mo., find another that will rent for the same that 1.costs less OR 2.costs the same but will rent for far more.
Renovations – Think practicality and ROI. Don’t go cheap for cheap sake and don’t over pay because its so snazzy. This is a business, not a glossy magazine.
My add to the thoughts: MANY. We’d need to sit down for this as each person, area, and property has different types of strengths and weaknesses. These need to be evaluated up-front BEFORE buying. I still believe that ‘the profit is made at the time of purchase’.
Every year I give feedback to people AFTER there has been a life changing event in their family. I strongly recommend that everyone who buys/ sells/ marries/ has children, etc, seek a consultation asap with (at a minimum):
- Legal counselor
- Insurance agent
- Real estate/ tax consultant
- Estate planner
‘Dower rights’ have changed in MI. A widows automatic 1/3 interest in her husbands real estate will be altered in April of 2017.
You’ve been warned.