Lowering the tax liability on your Troy rental property is definitely worth the effort if you have the chance. Regardless if you are new to rental property investment or a seasoned pro, studying your Troy property value assessment to determine whether it’s precise is time well spent.
At Real Property Management Metro Detroit, we recommend all of our landlords to take the time to do this because one might discover that the assessment is too high, which once re-evaluated can spur on lower property taxes. There are many ways to verify whether your current property assessment is correct.
How a Property Should be Assessed
Properties are typically assessed annually by an assessor from the city or town. In most cases, the assessor reviews the current status of your property and any improvements made and the current market conditions for similar homes in your area, then they multiply that by the area’s level of assessment as determined by the municipality. If you own a multi-family building, the assessor will factor in into the valuation the income earned from the property over the past year minus maintenance costs. The cost of replacing the home is also taken into consideration in determining its assessment.
If you open your annual property tax bill and nearly collapse from shock at the numbers, take some deep breaths and then carefully think of the options you have to lower the tax bill. One thing to consider, however, is that you’ll have a deadline to dispute the assessment. Most municipalities will give you 30 to 60 days after receiving the assessment to challenge it.
How to Understand an Assessment
Observe what the assessment says about your property. You may discover that you’ve suddenly become the owner of Troy property that is nothing like the one you actually own. For example, the assessment could mistakenly give your house four bedrooms when it only has three or places your address in an upscale neighborhood near your real location. In one case, a homeowner’s one-story home with vaulted ceilings was wrongly listed as a two-story house and charged double the actual square footage because the assessor viewed it from outside rather than doing a more detailed inspection.
The rate of similar properties in your neighborhood can tell you a lot about your own property’s assessment. If you are friends with your neighbors, you might be able to learn from their assessment. Otherwise, it’s a practical idea to compare your property with four or five in your general vicinity that have the same amount of square footage and the same property size.
Look into Exemptions
While taking the time to ensure the valuation of the property is correct, also look into whether you’re receiving any exemptions to which you’re qualified. Some states and many municipalities offer breaks to homes located in certain areas, owners who are senior citizens or veterans, and a number of other exemptions. Your local tax assessor can help you find any tax breaks to which you qualify.
If the first tax bill after purchasing your property shows that its tax assessment value increased by nearly 50 percent in one year, as what happened to an owner in Georgia, you’ll want to ask for a review to help you understand any changes. Most tax assessors are willing to unofficially explain your assessment. If you’re not content with the informal explanation, you can make a formal appeal. Property owners who have followed this route say they’ve been able to lower their assessments considerably.
When you work with Real Property Management Metro Detroit, we help you get the most out of your property and lead it to success. To learn more about the services we offer, contact us online or call us at 248-808-6550 today.