Property tax increases are coming and are impacting the rental housing industry across the Sun Belt.
A recent article from Bloomberg reviews several companies in the industry and what they expect to see regarding the increases. American Homes 4 Rent and Invitation Homes both said property taxes will increase—more than 20% at American Homes 4 Rent properties in Texas this year.
“[O]ur expected property taxes have been impacted more quickly than we had anticipated due to rising home price appreciation…” said Dallas Tanner, President & Chief Executive Officer with Invitation Homes, in a release about the company’s third quarter earnings summary. Property taxes are expected to increase 7%-8% for Invitation Homes, according to Bloomberg.
“Taxes are going up because values are going up, meaning the value of the assets they own are going up,” said Bloomberg Intelligence Analyst Jeffrey Langbaum in the article.
Smaller companies and independent rental owners are feelings just as squeezed. Matthew Haines, the National Apartment Association’s Independent Rental Owners Committee Chair, said in the article his taxes have doubled; he is selling a community because of these increased costs. “We can’t make money with it anymore. It is not possible,” Haines said. “Seven days a week, my wife and I are trying to keep our heads above water.”
Learn how property taxes impact rental housing and the breakdown of one dollar of rent.