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.
Homes are selling at prices lower than their assessed values in 66 out of 100 NC counties, including every county in the Triad besides Guilford County, which just went through a reassessment last year. What that means is that any county going through a revaluation will likely have to raise tax rates to stay revenue neutral. From a Triad Business Journal story on the issue:
In “normal” times following revaluations, with tax bases growing by 20 percent or more, counties are able to cut the tax rates they impose, in so-called “revenue neutral” actions.
Some 13 N.C. counties revalued last year. In nine of those cases, the new “revenue neutral” tax rate was higher than the previous rate due to eroding property values. Counties in which that happened included Cabarrus, Guilford and Pitt.
“Counties and towns that experience shrinking tax bases will need to dramatically reduce their expenses or raise tax rates to account for the lost revenue,” McLaughlin said. “Case in point: Carteret County raised its property tax rate by 30 percent last year in recognition of its new, smaller tax base.”
Heads up to all property owners in Forsyth County, preparation is already under way for a 2013 revaluation:
The county last went through revaluation in 2009. It was an arduous process: Coming as it did during a real estate meltdown that gripped many parts of the country, some argued that the entire process that year be scrapped. A 4-3 vote on the Forsyth County Board of Commissioners kept the 2009 revaluation in place.
This time, tax officials have a different challenge: a decline in the volume of sales makes it harder to track what is going on in Forsyth County neighborhoods. But Tax Assessor John Burgiss is confident that between his team of trained assessors and the technical tools they have to help them, the job will get done right.
“We don’t make the market — we follow it,” Burgiss said.
The assessor’s office has divided the county into nine sections, with an appraiser over each sector for residential property. The county is divided into four sections for commercial real estate.
By the time revaluation is finished, appraisers will have examined all 160,000 parcels in the county.