Posts By: William Ryan

How Does The Property Tax System Work?

Property Tax Basics

Each year, multifamily properties receive a valuation notice and later, a property tax bill.  Property taxes are used to fund local schools, city and county governments, and other local projects.  Since Texas does not allow income tax, property taxes become extremely important for funding the local government.  

Every county has a Central Appraisal District and its responsibility is to determine the market value of each property in its respective county.  To accomplish this goal, they must use methods of mass appraisal and make many assumptions about properties as a group.   

The Central Appraisal District does not determine or tax your property.  They don’t even set the tax rates.  The local taxing units set the rates and collect the taxes.      

Inaccurate Valuations

As you can imagine, a process that makes assumptions for large groups of properties leaves a lot of room for mistakes.  For your Texas multifamily property, you should never assume that your property has been valued correctly.  The valuation should be reviewed within the 30-day deadline, giving you time to appeal it.  For established multifamily properties, they are most often valued on an income approach.  The income approach looks at the net income and a return rate in deciding what a potential investor would pay for the property.  Using market rents and market expenses produces a market valuation, known as Fee Simple.  Using contracted rents and actual expenses produces a valuation known as Leased Fee.  The goal in Texas is to determine the Fee Simple valuation of your property.   

Controlling Your Property Taxes

When you consider all the annual expenses at a multifamily property, property taxes are the largest, typically making up 33% of total expenses per unit in garden apartments and 39% of total expenses per unit in mid & high-rise apartments according to the National Apartment Association 2020 Survey of Operating Income and Expenses.  

Cost cutting measures can easily be swallowed up by increasing property taxes.  Fortunately, you do have options to combat property tax increases.  If you feel your property is overvalued for tax purposes, you can file a protest with the Appraisal Review Board in the county where your property is located.  During the process, you will need to provide evidence showing why your valuation is excessive.  Remember: this is an argument about the valuation being too high, not the property taxes.  Stating that your taxes are too high will not secure a reduction to the noticed value.  If the protest is determined in your favor and your valuation is reduced, this will have a direct impact on your property tax expense.  Paying close attention to property taxes can have a significant impact to your bottom line.

Don’t Ignore Your Valuation

It is so easy to get caught up in other responsibilities and forget the importance of the one little piece of paper stating your property value and appeal deadline.  Yet, that paper can potentially be one of the most significant ways to reduce your expenses and increase your profitability.  In the rush of everything else, don’t forget to look at your property taxes.  If you are overwhelmed by all you have to do, property tax appeals can be taken off your plate by giving it to a multifamily property tax specialist.  Done right, tax agents should expand your capacity while eliminating your stress. 

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Aren’t All Property Tax Agents the Same?

A GENERALIST CAN’T DO WHAT A SPECIALIST CAN

It is common understanding that not all physicians are created equally.  Primary care physicians are wonderful at general care and can help with many problems, but a patient would be ill-advised to ask them to perform the specialized care of heart surgery.  In medicine, it has long been expected that doctors specialize in order to learn the complexities of a specific area of the body so they can give the best care. Currently, there are over 159 specialties and subspecialties listed by the American Board of Medical Specialties.   

ALL PROPERTY TAX AGENTS ARE CREATED EQUALLY

That is a common misunderstanding.  For too long in the property tax world, companies have been told that property tax agents are all the same and can handle any property type in any market.  This is not true.  Properties and markets are very different.  The belief that all are the same has resulted in many property owners receiving poor representation and care.  Specialization has become more necessary with the advanced technologies and information available in the world.  Tax agents who specialize in markets and property types are much better prepared to reduce property tax burdens than tax generalists.  Just as the trained eye of the heart surgeon sees issues, conditions, and solutions specific to the heart, the specialized multifamily property tax agent understands issues unique to your property type. Wayfinder Tax Relief is the only firm specializing in multifamily property tax in the state of Texas.

SPECIALISTS GIVE BETTER CARE

Medical specialists spend nearly all their time within their specific field of practice and come to know the details of their expertise at a much deeper level.  Understanding the details allows for better care and more accurate work.  Tax agents who try to be a “jack-of-all-trades, masters of none” are usually overburdened with too many properties, too many different industries, and a lack of time necessary to give quality attention to each appeal. That is the opposite of what you want when it comes to getting reductions and filing protests.  

Tax agents who specialize give more time to each appeal, have first-hand knowledge of the property, and even do additional research into surrounding properties to ensure they present the best, most substantiated case for their client.  The end result of this specialization is the best possible outcome for the client.

GETTING THE BEST RESULTS

Specialization in markets and property types separates great tax agents from the rest of the tax agent pool.  If you need heart surgery, go to a heart surgeon;  if you want the best representation for your multifamily property, go to Wayfinder. The results will speak for themselves.

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Texas Multifamily Property Owners Need a New Tactic in 2021

With slashed revenues and the perception that property values are getting higher, local governments are looking to squeeze whatever they can out of every property in their jurisdiction. For local governments that rely on property taxes for much of their revenue, appraisals aren’t reflecting the high unemployment and unstable economy we are living in (Texas Tribune).

But, 2020 wasn’t just tough on local government; it was also extremely difficult for multifamily property owners. These owners were tasked with keeping communities afloat while rental revenues were cut, stalled, or severely slowed. Further, they had to do it with less income. According to a CNBC article, about 18% of American renters were behind in their payments at the end of January 2021. 

Government relief is not enough; multi-family property owners are going to have to find another way to make it in this environment.

Facing Excess Valuations in 2021?

During this year, multifamily property owners helped carry many of the families who rely on your properties for quality housing. The Fort Worth Star-Telegram reports that “landlord’s issues have been overlooked” as they continue to lose income while still being expected to pay their bills.

Further, multifamily property owners cannot also be expected to carry the county governments. They need someone to stand beside them and hold firm against excess valuations. Just because single family home property values have jumped does not mean that the renters can pay higher rates. Rental revenues remain limited while the tax assessments are demanding payments that are far more than feasible or fair.

The Wayfinder Way

The laws of the great state of Texas are pro-taxpayer. Property owners have rights, and if they align with the right team that has Texas-specific experience and expertise, county assessments can be significantly reduced and remove unnecessary tax burden. Owners don’t have the time or the energy to fight this on their own, and there is a pretty good chance that their current tax agent does not have the bandwidth or specific expertise to get the reductions needed.

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Helping Struggling West Texans

Storm Uri put a stop to food deliveries to West Texas. Roads were slick with ice and rolling blackouts made keeping warm difficult. Wayfinder reached out to Weidner Apartment Homes in Midland, TX on Thursday to find out how to help. The immediate need was food to help residents get through the weekend. With no time to spare, Wayfinder went to work securing a refrigerated truck in Phoenix, AZ, and filling it with the much-needed food supplies. At 9:45 PM on Thursday, the truck was loaded and ready to go. William and Brendan drove straight through the night and arrived at Weidner’s office in Midland at 1 pm Friday.

A large and wonderful group of the Weidner team were there to meet them and help unload the groceries. Together they packed nearly 300 food boxes and the local Weidner team went to work delivering food to those in need in Midland, Odessa, and Abilene, TX.

We are all so thankful to be part of organizations that truly care about the communities they serve. What a blessing to be able to help our friends in West Texas in this time of need. Thank you to all who have helped in this process by donating funds, time, and encouragement to make this happen so quickly.

For more on the story you can visit the CBS 7 news story: https://www.cbs7.com/2021/02/20/arizona-company-donates-food-to-300-west-texas-families/

Helping Homeless Youth

We are dedicated to sharing our success with causes that are meaningful to our clients. This year we were able to help support Covenant House Alaska on behalf of one of our valued clients. Through the fundraiser, over $1.2 million was raised to help homeless youth.

Covenant House Alaska is a non-profit organization that houses approximately 135 youth every night through their various programs. They believe that no young person should have to sleep outside. We are grateful for their wonderful work and that we had the opportunity to support them in this cause.

Wayfinder is a property tax consulting firm specialized and focused on multifamily properties. If you would like additional information about our services or how to help support great causes please contact us at william@wayfindertaxrelief.com or 480-616-1025.

Multifamily Property Taxes in the Covid-19 World

3 Points to Keep in Mind When Appealing

Right now, the safety of your team members, residents, and the uncertainty resulting from this pandemic have likely pushed property taxes to the far regions of your mind. Not to worry, we exist to handle your property taxes so you can rest assured they are being addressed while you handle the critical issues facing your company.

Rising unemployment and government-mandated stay-at-home orders have a real impact on your residents and their ability to pay rent, directly impacting your gross income. Government restrictions have limited the ability to address non-payment and much about this year remains uncertain. One certainty, PROPERTY TAXES will come due regardless of how your property performs.

Whether you engage a tax consultant or appeal your own properties, here are three important points to keep in mind when protesting your valuation this year:

1. How are the current conditions impacting your rent collections?

2. Have your expenses increased due to higher usage or restrictions?

3. Last year property sales may not correctly reflect the market valuations today.

It is more important than ever that you engage multifamily property tax specialists to represent your properties and combat the rising property valuations. Reductions to your property valuation will directly impact your taxes and affect your bottom line, helping your cash flow when you need it most.

Wayfinder Tax Relief, LLC is the #1 multifamily property tax specialist in the industry. They focus solely on multifamily properties and are at the cutting edge of the industry change. They are involved in many local apartment associations and are members of the Texas Apartment Association and the National Apartment Association.

Is Your Tax Agent a Multifamily Specialist?

The greatest in the world in any field, be it surgeons, athletes, musicians, etc, are those who are dedicated to their craft and repeatedly focus their efforts on excellence. Others may practice, but the greatest consistently perform, and then ask, “what was the result and how can it improve?” They then do it again. They do not stop when others stop. They do not give up when it is difficult or seems impossible. They persevere, never letting obstacles stop them from their goal of excellence.

Our society values and rewards specialization. Just look at the salaries of specialized surgeons, athletes, or musicians. If I needed heart surgery, I would seek out the best heart surgeon, not my primary care physician. I know that my primary care physician, while a capable doctor, is not the best for what I need: heart surgery. A professional baseball team needing a pitcher, would not search out an outfielder to fill their need. While both players are skilled, their specific expertise does not translate to excellent performance.

Why should hiring a tax agent be any different? Most property tax firms are like primary care physicians. They are capable of general care and are helpful for common issues, but unfortunately, that does not mean excellence for any specific property types or issues. On the other hand, multifamily specialists, like heart surgeons, focus only on multifamily properties. They are dedicated to excellence, consistently perform, and then ask, “what was the result and how can it improve?” They then do it again. Right now, it is more important than ever that you have the best multifamily property tax expert on your team helping your company weather the economic storm of Covid-19. Hiring a multifamily specialist can save you time, reduce your property tax expenses, and be the game-changer you need right now.

Wayfinder Tax Relief, LLC is the #1 multifamily property tax specialist in the industry. They focus solely on multifamily properties and are at the cutting edge of the industry change. They are involved in many local apartment associations and are members of the Texas Apartment Association and the National Apartment Association.

Buying Multifamily Property? Please Pass the SALT.

There are many factors to review and consider when buying a multifamily property. Property taxes are just one of those factors. The lagging effect of property taxes can be deceitful when evaluating their impact on a sale. Unfortunately, many times property taxes seem to be glanced at, but not thoroughly evaluated. Using last year’s tax bill is a start, but depending on the jurisdiction and their rules, you may be setting yourself up for a nightmare.

In Arizona, properties can have their taxable value changed when parcels are combined, split, or when significant changes are made to the structure. Deals that were financially viable on first review, can become complete financial losses if a revaluation is triggered. Since property taxes are a lagging factor, buyers may not see any effects until the following tax year. In one case, where a taxpayer consulted us after the deal, they were shocked to learn that the taxable value increased over 44% because of a parcel consolidation. Had they known the law they would have killed the deal.

In other states, such as Texas, the seller and buyer are not required to disclose the purchase price. When the purchase price is disclosed, the appraisal districts attempt to use it to value at sale price. Buyers and sellers from full disclosure states such as California sometimes volunteer the sale information not knowing that it is not required. In many cases, this not only causes their property to be reassessed at a much higher value, but the other multifamily properties in the community are increased based on the sales approach.

Seeking council from property tax experts can help you avoid some of these pitfalls and can help the community at large. When we work together, we can help keep the property taxes lower for all.

Wayfinder Tax Relief, LLC is the #1 multifamily property tax specialist in the industry. They focus solely on multifamily properties and are at the cutting edge of the industry change. They are involved in many local apartment associations and are members of the Texas Apartment Association and the National Apartment Association.

Travis Central Appraisal District is Slammed by the Judge

Travis Central Appraisal District (TCAD) has become quite unfriendly to taxpayers over the past several years. In 2019, they refused to give in-person informal meetings. Then they failed to meet their statutory deadline to produce evidence to protesting parties, which resulted in the Appraisal Review Board (ARB) attempting to dismiss an entire day’s worth of hearings. Ultimately, the ARB did not dismiss those hearing decisions.

In 2020, TCAD will be bringing back in-person informal hearings, but with the caveat that the appraiser meeting with you does not have the authority to make any changes based on your evidence in the meeting. They are simply receiving your evidence to then have it reviewed by a panel and a decision sent within about two weeks after your meeting. That effectively removes the taxpayer’s ability to have an open discussion and correct any misstatements made by TCAD among themselves.

TCAD has also chosen to file protest ARB decisions without specific written authorization of the board of directors. But finally, after all the anti-taxpayer rhetoric, District Judge Catherine Mauzy signed an order on February 11, 2020 to dismiss TCAD vs. Texas Disposal Systems Landfill Inc. This significant order requires that TCAD must have written approval of the board of directors to file a specific appeal of an ARB decision. Hopefully, this will slow down TCAD’s protest of ARB decisions.

For the original article: https://theaustinbulldog.org/judge-undercuts-chief-appraisers-authority/

Wayfinder Tax Relief, LLC is the #1 multifamily property tax specialist in the industry. They focus solely on multifamily properties and are at the cutting edge of the industry change. They are involved in many local apartment associations and are members of the Texas Apartment Association and the National Apartment Association.

First-Hand Knowledge: How to Secure the Best Multifamily Property Tax Reductions

You wouldn’t buy a property without doing the due diligence of an in-person visit, maybe even more than one. Google Earth or satellite views are nice tools, but they can’t replace being physically at the property and seeing the asset first-hand. Why should representing your property in a property tax protest be any different?

How can your tax agent know the issues your property is truly facing: location, demographics, shifts in the economy, storm damage, etc. without visiting your property? In short, they can’t truly know. They may make assumptions, or guesstimate about effects, but their testimony will lack the fullness necessary to achieve the best results at the board hearing your protest.

Tax agents who put their clients’ best interest first, will visit your property annually. It may be time to give your tax agent a grade. Ask your agent when they last visited each of your properties. Have them show you pictures and notes taken on their visit. Will they make their contingency fee conditional upon visiting your property? If not, why won’t they commit to giving you the representation you deserve to achieve the best tax savings?

We make the Wayfinder Guarantee part of our business. We guarantee to visit our client’s properties annually or we won’t charge a fee for our services. We know that we provide the best representation when we physically visit the properties, the communities and the jurisdictions where they are taxed. This process has allowed us to consistently secure bigger and better reductions than our competitors.

Wayfinder Tax Relief, LLC is the #1 multifamily property tax specialist in the industry. They focus solely on multifamily properties and are at the cutting edge of the industry change. They are involved in many local apartment associations and are members of the Texas Apartment Association and the National Apartment Association.

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