Multi-Residential properties come under a number of categories. They include:
All of these property types are valued using an income approach to value except for the condominiums which are valued similar to a residential house.
The various different types of apartment buildings including the plex types are usually valued based on annual gross market rent. The assessor determines a factor, which is applied to the rent to obtain the value for the property. If the assessor completes the analysis properly, this is usually a very good indication of the value of the property. However, since the method is based on mass appraisal, it uses many other factors that may or may not apply to your property. This leaves room for many property specific inaccuracies that could end up increasing the value of your property and thus cause a significantly higher tax bill.
Multi-residential property owners should have their property assessment reviewed by a consultant on an annual basis. This is due to many changes in the policy of taxing your property on an annual basis along with any physical changes or changes in use that could occur annually on your property. I have had over 20 years experience in this type of property valuation area that would be beneficial to the property owner. Property management companies who manage a number of properties could take advantage of this service as an additional service provided to your clients. Having a professional consultant review the tax expense could save significant dollars which would lower your expense ratio and thus produce a more profitable property.
In order to complete an analysis for these property types, the consultant should be aware of what financial information was sent to the assessment office. Therefore, the property manager/owner should maintain a file with all the necessary tax and assessment information received from the assessment office and sent to the assessor's office upon their request.
If you require assistance with your multi-residential property taxes call 519 351-5405.