Negotiating Tax and Insurance Rates Can Significantly Impact NOI

MultiFamily Executive has an easily digestible post about negotiating with tax assessors and insurance companies and how it can positively impact your NOI:

The county assessor tends to measure property valuations at higher levels, while the owner, obviously, wants the opposite. It’s a timeless dance. But through diligent preparation, and the ability to come to a fair compromise, owners can save hundreds of thousands of dollars on a typical 100-unit property…

Typically, the assessor will need to be educated about what the property actually looks like, and its condition, or else the owner will get a very general valuation that doesn’t speak to the property’s individual strengths and weaknesses. By maintaining a thorough inventory on the property and documenting the cost necessary to put it in appropriate shape as valued by the assessor, an owner stands a good chance of lowering their property taxes…

The same negotiation skills need to be applied to insurance, as well. Owners can easily become over-insured, resulting in higher premiums, if they don’t pay attention to the coverage.

By providing solid evidence that these insurance standards are flawed, generally by speaking with architects and contractors, you can get your evaluation down, thus dropping the insurance premium, which can add more than $35,000 in overall value to a typical 100-unit community.