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My parents own a 2 family investment property in Harrison and the town sent letters for reassessment. They want to come into the property and also want to know income and expenses for the property.
Why does a homeowner have to share this information with the town? Seems like government overreach.
The home is an older 2 family house with 2 bedroom 1 bath apartments and no parking They already pay $9,000/year.
They have owned this house since 1999, paid $80,000 for it and out about $100,000 of work into it. It’s probably worth $350,000 now with no mortgage. The rents aren’t great... $1500 per unit. My point is what business is it of the town to know how much they are making?
They probably don’t HAVE to give them access nor any information. But be prepared for the assessor to make a guesstimate which will probably err on the high side. Then your parents will have to fight to get the assessment lowered by providing all that information (and probably more). And they will likely lose (because the rules are rigged in favor of the government).
Or the assessor will ask a loose-lipped neighbor, just like the census bureau does.
Why not get it done on their terms by making it easy on the assessor?
I don’t have a problem with them checking the property, but why do they need to ask for income and expenses? What does that have to do with an assessment?
I don’t have a problem with them checking the property, but why do they need to ask for income and expenses? What does that have to do with an assessment?
This is just a guess, but logic tells me that knowing how much revenue something generates helps determine its value.
For income producing properties....Revenue - Expenses = Net Operating Income / Cap Rate = Value
Cap rate varies on property type, market and risk. But for a basic two family low rent, this equation barely comes into play for the true value. Given the replacement cost and land value would be substantiallly higher. But yes, the assessor will need it.
Ie a property with 33 units paying 2500/mo would have 1mm in revenue and a 30% expense ratio has a 700k NOI. For a multi family, someone may pay a 3.5% cap rate in NYC and a 6% cap rate in North NJ. So 20mm value NYC, 11.67mm in NJ
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