Raleigh, Durham, Chapel Hill, CaryThe Triangle Area
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Miamiblue,
I think there is a middle ground, and that in many circumstances the actual tax burden is split between the landlord's revenue and the landlord's pocket.
Bobbis,
Are you saying that if an investment property is cash-flow negative, that the tenant then pays the property taxes?
Those taxes have got to be paid, so if I was the owner of the property, I'd be sure to charge the tenants whatever it takes to cover my final expenses....taxes, upkeep, etc. I'd try my best to have positive cash flow in the end.
Those taxes have got to be paid, so if I was the owner of the property, I'd be sure to charge the tenants whatever it takes to cover my final expenses....taxes, upkeep, etc. I'd try my best to have positive cash flow in the end.
Those taxes have got to be paid, so if I was the owner of the property, I'd be sure to charge the tenants whatever it takes to cover my final expenses....taxes, upkeep, etc. I'd try my best to have positive cash flow in the end.
That's the goal, but it's not always possible. I was a landlord for ~7 years, and I'd say I lost money (real cash, out of pocket) for 4 out of 7 of those years. Sometimes the market rental rate just doesn't cover your costs - especially if you didn't set out to be a landlord in the first place.
Those taxes have got to be paid, so if I was the owner of the property, I'd be sure to charge the tenants whatever it takes to cover my final expenses....taxes, upkeep, etc. I'd try my best to have positive cash flow in the end.
No businesses pay taxes. Any tax levied on a business is passed on to the consumer. That is true of the relationship between a landlord and a tenant. If the property tax goes up $5, the tenant's rent will increase by $5. The same could be said for a gallon of gas. If the tax for a gallon of gas were to increase by $0.05, you can bet that we'd all be paying $0.05 more per gallon. I think that is what saturnfan is getting at.
Supposedly, when you buy a loaf of bread from a grocery store, you're paying for a part of 150 different taxes: From the wheat farmer's gas and property tax to the food processor to the license for the truck driver who delivers it to the grocery store and everyone else in between.
For the 1,000,000th time if people are that bitter over thinking they pay and owners property taxes then go buy a place and REALLY Pay them. These are the facts:
If my mortgage payment is 900.00 but the RENTAL MARKET VALUE is only 800.00 then guess what .... you aren't paying property taxes you are paying FAIR MARKET VALUE.
If my mortgage payment is 500.00 and RENTAL MARKET VALUE is 800.00 then guess what ..... you STILL aren't paying property taxes you are paying FAIR MARKET VALUE.
If you get notice your rent is getting raised then evaluate the MARKET VALUE of the property and decide weather you want to move some place else or take the new rate. Please don't blame it on property taxes that aren't in your name and that you are not responsible for any way. Bottom line is no one can charge you what you aren't willing to pay to live in a place!!! (Fair Market Value)
For the 1,000,000th time if people are that bitter over thinking they pay and owners property taxes then go buy a place and REALLY Pay them. These are the facts:
If my mortgage payment is 900.00 but the RENTAL MARKET VALUE is only 800.00 then guess what .... you aren't paying property taxes you are paying FAIR MARKET VALUE.
If my mortgage payment is 500.00 and RENTAL MARKET VALUE is 800.00 then guess what ..... you STILL aren't paying property taxes you are paying FAIR MARKET VALUE.
If you get notice your rent is getting raised then evaluate the MARKET VALUE of the property and decide weather you want to move some place else or take the new rate. Please don't blame it on property taxes that aren't in your name and that you are not responsible for any way. Bottom line is no one can charge you what you aren't willing to pay to live in a place!!! (Fair Market Value)
In those cases, a landlord may protest their assessment.
In those cases, a landlord may protest their assessment.
Read what put in there again ... the assessment doesn't matter. The point is no matter what the the tax value or the property tax bill if fair market value is 800 a month for the neighborhood Im not going to get much more or less than 800 ..... The property tax isnt in the equation at all. Thats like saying the car companies are going down hill and need money so the next 4 ford rangers will have to be sold for 10 billion each to make up for the loss of others..... if its not worth that much its not going to go for that much period.
Here's what my landlord paid this year. Bet it's in our rent.
Current Due: $186,706.38
Due Date: 09/01/2008
Interest Begins: 01/06/2009
Saturnfan,
Aside from my personal interest in how you obtained the information in your original post, I am wondering what prompted you to start this thread? Are issues taken with your present landlord? Were there matters of public policy that ignored a renter's perspective simply because that policy is supported by taxes derived from property, thus giving more credence to the holder of title? Or was the original post simply rhetorical?
Being a renter and a property owner myself, I do believe I understand the facts regarding this issue. When an acquired 'bundle of rights' (property) is used for rental purposes, it essentially becomes a going concern, a 'business' for lack of a better word. That business must consider numerous factors in order to stay afloat just like any other business. Some of those factors include maintenance costs, debt service, various other expenses, fees, permits, depreciation, appreciation, rental values, insurance, litigation, capital gains, losses and many other components including property tax and other taxes. A huge responsibility not attempted by just anyone (though a lot of anyone's have attempted).
So, when you say that a renter is paying the taxes, it might be true to a degree in that a rent a potential renter is will to pay in exchange for use of a dwelling reflects part of the cost of running such a rental property business. It also holds true that your rent reflects part of the other elements I mentioned in the previous paragraph and more.
However, the rent paid is also, and heavily, based on what the market will bear. What the market will bear does not necessarily result in a profit for the person holding the bundle of rights (the property). The person holding those rights could be supporting a negative cash flow, or a monthly loss. But that's an investment risk the title holder has obviously chosen to bear in hopes of recouping that loss later down the road (for whatever hopeful or planned reason).
The renter exchanges cash for dwelling. A barter, if you will, trading one thing for another on a month to month basis (or per various contract options). Mind you, a renter has their own set of rights too. But not the same bundle of rights as the holder of title nor must a renter maintain those rights. The rights are legally separate, though similar in many instances.
Having truly glossed over the whole scheme of owning/renting since it gets quite detailed, the reality is that the person a renter pays for a dwelling must maintain those bundle of rights, or else. The title holder is, indeed, the one paying the taxes. Not the renter. The renter only pays a rent based on the upkeep of property in conjunction with what the title holder can get on the market. Hopefully, they make a profit.
Yes, costs may be passed down to the renter but the renter does not actually pay the property taxes nor carries the burden of anything associated with maintaining that responsibility. No offense intended, but renters are simply customers that come and go based on needs, desires and contract limitations. Title holders to property simply (or with great complexity) maintain the business that renters hopefully enjoy, for better or worse.
It's really not a big deal, is it? Or is it? And why?
Aside from my personal interest in how you obtained the information in your original post,
Property taxes are public records and searchable on the wake county website. There are a number of search options (owner, address) and for vehicle tax bills you can search by license plate #
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