White Plains tax assessment on rental property (for sale, real estate)

[JohnnyG2015]

Hey -

Just purchased a small multifamily home in white plains and 2 months in - i got a letter from white plains stating they are re-evaulating taxes on it. (which of course means they want to increase it)

I am not living in the multifamily - its 4 units and i pay about $12,500 for city, state, school now. Purchased it for just under 600k and it was just assested for under 600k.

They asked for rent income, expenses, etc.

Hoping you guys know how this all works and how they would increase my taxes based on if i had a positive cash flow(it doesnt currently due to maintenance, repairs, etc)

So they going to reduce my taxes because it probably will be a loss for next few years? (ha - i know they wouldnt do that)

Thanks in advance for the help and info.

[sezzam]

The property appraisal has nothing to do with your cash flow (positive or negative, occupied or vacant). It is completely about what the city thinks the property is worth.

[aclappine]

I owned a 6-unit rent stabilized building in White Plains for 21 years. I bought it in 1989 and initially the buildings net income (rents - expenses) was only slightly positive, but the taxes kept increasing. In the late 1990's, a lawyer negotiated a 13% reduction in my taxes based on my documented net income. During the real estate boom years (2000 - 2008), the city steadily increased my fair market value up to $720,000. My peak total taxes reached slightly over $13,000. After the collapse of the housing market in 2008, the city lowered my fair market value to $705,000.

By 2009, I needed money for my kids college expenses. I decided to put the building up for sale at $699,000, roughly the city's fair market value. The best offer I received was about $500,000. I rejected the offer and went to see the White Plains Assessor with my story, seeking a reduction in taxes. He requested I put all my documentation including expenses, rental income, for-sale ads, best offer, etc. together and submit a request for a reduced assessment. Without receiving any return correspondence from the city, the fair market value listed on my next property tax bill was $540,000, though they raised the tax rate for everyone so it only resulted in a $1,000 tax reduction. About 6 months later, using a good realator, I sold the building for $625,000.

If you just paid $600,000 for your building, the City can't really claim its worth more. Nor can you claim its worth less. The value of a rental property is tied to the net income (rents - expenses). Keep an eye on their fair market value numbers with time to make sure they don't just continuously increase it while your net income is not increasing. If the net income is bad, don't hesitate to fight it yourself or with a lawyer. Don't hesitate to fight them. I won twice.

[JohnnyG2015]

Thanks for the info - if i was in the market 5 years ago i would have loved to pickup a 6 family for 625k.

I have the feeling everything in white plains is now private sales and never show on the mls so its really hard to pickup anything nowadays.

[aclappine]

I noticed a big change in the attitude of tenants between 1989 and 2009. I always kept the property in good shape. Until about 2000, everyone had their rent in by the 1st of the month. Maybe one of 6 tenants would be a week late. By 2009, half my tenants were paying me up to 3 weeks late, and I would always have one tenant who I would have to get my lawyer to chase after to get my rent a couple of times a year.
I gradually got fed up with having to remind people to pay their bills. I had kids of my own and it started to feel like some of my tenants expected me to be flexible with them as if they were my kids.
I think owning rentals is great if you have a couple of them so you make enough to make it worthwhile and maybe have a regular handyman to take care of any issues.