Property tax values have risen dramatically across Central Texas. The tax assessor’s office has said that almost every single home value has gone up 50%. A lot of real estate agents and people in the community are talking about this, but did you know that there’s a way for you to capitalize on this? There’s a way for you to add value and I’ve got three points here which I want to go over with you.
This is a huge jump for homebuyers and homeowners. They’re in shock at this. So how can you add value? This is how can you make an opportunity to become valuable to homeowners you’ve sold properties including investors and potential tenants. Here’s how to keep in touch with real estate clients.
1. Homeowner Outreach
Reach out to everyone you sold a home to in the past four or five years. There are several different ways, you can call them might be the best way, send a text, or you can do a batch email that says Property Values On The Rise: What You Need to Know.
In there, you tell them that the assessed value has gone up and you are available to do a quick CMA for them. You can do a Zoom call for 15 to 20 minutes where you can go over what their actual value is compared to what the tax assessor says.
You’ll set up this meeting and you will have everything ready upon meeting them. Talk about what they’ve done to the home, you’ll look at the comps and you’ll kind of agree on a value. Go a step further and use Homebot which is an Automated Valuation Tool that can be adjusted.
What you’re going to do with this while they’re on the Zoom call with you, you log into your Homebot account, type in their address, what their interest rates are, know what they paid for their home, what their balance of the mortgage is, and what their interest rate is. Every month or however long you want that frequency, it could be every two weeks or every month, they will get an automated value based on the value put in there.
An Automation Value Tool, this is not going to be accurate from the start, because we log any values, but if you go in and adjust it, it should try to keep up. Now, let the homeowner know that this is going to need to be adjusted every six months to a year to reflect the current value.
What you’ve done here is you have added value, you can let them know if they should fight their taxes, and you set up a drip campaign at the end of that meeting. Ask them or tell them that if they have anyone that would benefit from this, they should know. You’ve essentially asked for a referral without having to ask for a referral.
I can tell you that these Homebot reports get opened very regularly, they’re very popular, and you’ll get a notification when someone opens it or request the updated value.
2. Renters
If you’ve done any leases, I know a lot of people don’t do regular leases or apartment leases, but sometimes you have people that move here and they’ve rented a home for $3,000 to $5,000 a month. Reach out to those people and let them know that rental prices across the city are going to go up. We’re going to see the biggest increase in rents that we’ve seen in years.
The reason being is that rental properties are taxed on current value homeowner properties have the advantage of having a Homestead Exemption which only goes up 10%. Investors and rental properties are gonna get hard and they’re gonna pass on that deficit or that adjustment in their return investment to the tenant and ask them if they want to look at what their options are.
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Taxes just came out recently. It’s better to do this right now before the expiration of the rent comes up and rental owners are starting to adjust for the increased cost.
I can tell you, I have not known that tax values have gone up. I have not even looked at my values. The first thing I looked at was when my lease is going to expire because we’re going to adjust them accordingly. Get ahead of the game and contact any past renters that you’ve helped and see if they can afford to buy a home because in some cases even if they’re at a house paying $4,000 to $5,000 a month, they may be able to find a condo a little bit further out.
3. Investor-Owned Properties
Investor-owned properties are going to hit the market. A lot of investors in the past three to five to seven to 10 years are buying properties in Austin and don’t do anything with it.
What I mean by that is they’re not diligent at either keeping up the property or increasing the rents. If someone bought a duplex 10 years ago, and they put someone in for $1200 a month, then they’re probably increasing the rents very little. Even if they’re keeping up to the market value, and the tenant stays there, they’re going to have to increase the rents by so much that the tenant would probably move out.
They are going to have to spend $60,000 to $70,000 in getting the place up to aesthetically what someone would pay for market rent and they’re not going to want to do that. But that’s okay because they have equity in these properties, they don’t need to. A lot of people are gonna say, instead of going through the hassle of getting rid of the tenant or pretending to move out and spending so much money out of pocket, which they may or may not have, they probably have $200,000 or $300,000 with equity. These are going to be value-add properties for your investors.
A lot of people these days are updating duplexes with courts and nice counters and famous appliances. A lot of people that are selling these types of properties aren’t going to have that. A typical example is if a duplex has been renovated or flipped to $700,000, these guys may be looking at selling it for $500,000, they probably bought it for 250, they got $250,000 worth of equity, this is a chance for you to get your investor in a property like this. They can spend $50,000 to $60,000 and make money when they buy now as someone that has sold a lot of investment properties.
The delivery of this to your clients, potential clients, or potential investors has to be done correctly. They need to know that this is not a cash flow play, you’re gonna put 30% or even 40% down on that property, but it’s an appreciation play because when they put, let’s say $30,000 on a $500,000 duplex, put $50,000 in it, they instantly make $150,000 or whatever that spread.
My point about this is that there are going to be more opportunities for investment properties over the next 12 months than what we’ve seen in a long time.
As you’re reading this blog, I would like to know…
- What is the impact you’re already seeing from property values?
- Are property tax values going up?
- Are you getting calls from clients?
- What are your predictions on the market?
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