So you’ve found a great rental property, but the high property taxes are making you pause? Let’s talk about property taxes and why lower isn’t always better. On this episode of Investing in Real Estate, I’m making the case for investing in states with high property taxes.
When you’re evaluating a rental property, don’t get stuck on one number. Overall ROI is important. But in many cases, you can still get a great return with high property taxes. On today’s show, you’re going to learn about the role of property taxes, and how to evaluate your overall investment.
On this episode you’ll learn:
- Why stability of a market is so important.
- What higher property taxes can mean.
- What your number one expense is as an investor.
- And more!
Why Stability of a Market Is So Important
My advice is that you focus on the stability of the ROI, not the ROI itself. Hopefully you intend to own this property long-term. So while any turnkey company might be able to get you a low ROI, consider the stability of that market. If the market isn’t stable, you’ll have a future of tenant turnovers—which ultimately eats into that ROI.
What Higher Property Taxes Can Mean
Higher property taxes equates to better schools, more stable tenants and overall better markets. This is why my company spends years analyzing markets and accounts for all scenarios and all numbers that are factored into an ROI.
What Your Number One Expense Is As an Investor
Tenant turnovers are the number one expense. If you can mitigate this and find longer-term tenants, this is a win! Often times, tenants want to put down roots in places that have higher taxes because there are better schools and better amenities.
Episode Resources
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DISCLAIMER: I am not a financial adviser. I only express my opinion based on my experience. Your experience may be different. These videos are for educational and inspirational purposes only. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. It is imperative that you conduct your own research. There is no guarantee of gains or losses on investments.
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