Comments (0)

When you buy a house or property, the mortgage company that holds your mortgage usually has an escrow account set up, which holds your monthly payment towards your homeowners insurance and property tax. The standard procedure is for the mortgage lender to send you the money in a form of a check in December to pay your property tax. If you do not receive this check by the end of December, you should consult with your mortgage lender. The idea of paying your property taxes before the end of the year, means you can claim it on your current years tax return that you will file in January or February.

People expect to pay their property tax before the end of the year so they can take the tax as a deduction on their taxes. If you do not receive the payment before the end of the year, you will have to wait until the next filing season to claim your property tax, which means this year’s property tax deduction is not available and therefore, you have one less deduction. This means a lot to people that rely on deductions to reduce their total tax liability. You can still claim your mortgage interest, but not the property tax.

Some people do not have an escrow account set up by the mortgage lender for one reason or another. If you happen to be one who does not, you have to save the money yourself. This is sometimes very hard for people to do, especially if you are on a tight budget. You could wait until you receive a refund for your yearly tax returns, but you might miss the first installment date, which in most states is January 31. The second installment is then needed by the end of July.

If you miss the first installment, you are not able to participate in the installment plan. You can still do it this way, but you will be charged a penalty and interest on the outstanding balance. Many people have found that the interest rate can accumulate quite rapidly if you do not have the funds available when needed. This can cause a strain with the county and the homeowner. The county wants their money. If you leave your property tax liability go to long, you might find yourself in quite a predicament. The county can and will come after your house for the money.

It is always better to have some form of escrow account set up by your mortgage lender or by you, therefore, the money will always be available to pay the taxes. If you fall behind, it is very important to get caught up as soon as possible in order to prevent a lien being put against your property and risk an auction of said property to recoup the delinquent property taxes. Property taxes owed on a property never go away unless they are paid. Property owners need to plan ahead, especially if the mortgage lender does not provide an escrow account to save the money for you.

Comments (0)

While a good many millionaires will agree that their fortunes were made in real estate, the honest ones will also tell you that they’ve probably lost a few fortunes in real estate along the way. This is a risky business and every property purchased doesn’t always pan out to become a successful investment. There are many risks involved in real estate investing and you would be going to battle unprepared if you didn’t take a moment to carefully study these risks and work to avoid them when planning your property investment strategy.

Unfortunately, there are very few one size fits all risks for real estate investing, as each type of investing is inherently different. This means that each type of real estate investment will involve a new set of risks. Below you will find a brief overview of different styles of investing and the common risks that are involved in each.

Rental Properties

This type of investing offers some risks that are unique and some that are also risks when investing in properties that are lease-to-own or rent-to-own as well. First and foremost is the risk of failing to make a profit. If the property in question cannot achieve an adequate monthly income to cover the expenses of operating the property then it is not a solid investment.

Other risks include the risk of getting bad tenants. This is particularly hard on first time investors. Bad tenants are costly and in some cases destructive (which leads to even greater expense). Vacancies are another risk for rental properties. These properties are only costing money as they sit empty rather than earning money as they were intended. Short turnovers are in your best interest as are long-term tenants.

“Flipped” Properties

This is one of the most enjoyable types of property investments for many ‘hands on’ investors. This allows the investor to roll up his or her sleeves and take an active role in creating the masterpiece that will eventually bring in serious revenue (at least that is the hope). This is also one of the riskier investments, particularly when trying to turn a profit in what is known as a buyer’s market.

The risks are simple but often overlooked and they can have a significant impact on the overall success or failure of the project. First of all, the biggest risk is in paying too much for the property. Other risks include underestimating the costs of repairs, over estimating the ability of the investor to do the work him or herself, taking too much time, experiencing a down turn in the housing market, making the wrong judgment call for the neighborhood, becoming overly ambitious, and getting greedy. Sometimes it is much better to walk away with a lesser profit than to end up loosing money by holding out.

Personal Residence

Keep in mind that your personal home is essentially an investment. The intention is that your home will gain in value over time and that equity in your home will build as you age. There are risks involved in this transaction as well. Buying a home that is in a ‘borderline’ area or one that is not showing obvious signs of growth is one of the biggest risks. This puts your home in the position to lose rather than gain value. This can make your home a burden rather than the investment it was intended to be. Other risks involve is becoming involved in a loan situation that is not at all beneficial (such as an adjustable rate mortgage or an unreasonable balloon payment).

Perhaps the biggest risk of all when purchasing a personal residence as an investment is failing to get a proper inspection that could rule out potentially costly and even dangerous problems within the home your purchase for you and your family. Toxic mold is one problem that comes easily to mind that most proper home inspections would almost immediately rule out. Others include structural problems that are costly to repair and dangerous to leave in disrepair. Each of these risks should be considered before an offer is made on any property.

For those seeking to turn impressive profits in short order, real estate is one way in which this can be accomplished. It is in your best interest however to be aware of the risks that are involved and take careful steps to minimize those risks. Taking these steps now may cost a little more on the front end but in many cases the pay off for doing so well outweigh the expenses.

Comments (0)

There are several steps for the property tax appeal process. The first step is to determine if you are receiving a higher assessment than what you believe the property could sell for in this period. If you feel the assessed value is high, you can then take the first step towards appealing the tax bill. If you do not succeed on the first level, you have two other levels to appeal to before taking the final step in a courtroom.

The first thing to do is appeal to the local board. The local board consists of the members who govern the community that you reside in and are the ones who approve the assessment. In writing, you will submit your claim to the county or city clerk stating that you are appealing your assessed value on your home. This has to be in a certain time and every community has a different ruling on the deadline for this process. You will need to provide proof that the assessment of your property is to high. You will also need to fill any forms that are deemed necessary. You will be notified in writing what the decision is about your claim.

If they denied your claim, you may take the second step, which means appealing to the county board. This is comprised of county commissioners. In writing, you must submit a letter of appeal for the property in question. Again, there is a deadline for doing this after the local board denies you. You will receive notification of the hearing. If this board denies you a lower assessment of your property, you can then take your case to the Office of Hearing Examiners. After they receive your letter of intent, they will set a hearing date.

If this level of the community denies your claim to lower the assessed value of your property, you can then take it to court and be heard by a judge. You will have a certain amount of time after being denied by the Office of Hearing Examiners to partition the court for a hearing. Once you are granted the court hearing, you need to get all your vital information together and plan your testimony as to your reasons and why you are requesting a lower assessment value for your property.

During this proceeding, the judge will hear both sides of the argument and after considering all sides, the judge will make a decision whether to lower the assessed value of your property or resolve that the amount of the assessment is justified. This of course, is going to be the final decision. If you have any questions, you should make sure to ask an attorney if you are not using one to represent you. It might just be that you are asking for a great deduction in the assessed value than what the courts and the other boards feel is to drastic. You might have to consider changing the amount you feel is justified, and settle with a higher amount, but one that is slightly lower than what the original was.