decorative illustration of man walking in shackle with tax inscription

Is your tax bill growing faster than your NOI?

We have had some unprecedented things happen in the real estate market between 2020 and 2022. In January 2020 we hosted the CIASF annual Industrial Market Report and presented data on the state of the industrial sales and leases in 2019. The consensus was purely positive. But then… March rolled around and COVID-19 shutdown the world. A black swan like event that no one would’ve factored in. With the world supply chains grinding to a halt and cities around the globe instituting isolation protocols, no one knew what would become of offices, retail shops and industrial buildings and really the entire range of the economy.

decorative illustration of man walking in shackle with tax inscription
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The Fed swooped in to keep the monetary system moving and added nearly 4.5 trillion dollars to their balance sheet between 2020 and 2022. Pretty much any asset priced in dollars bounced back within a few months. But they kept the printing machine going, and only just this spring began to cut back on the Quantitative Easing, that really began in 2009 but when full force in 2020.

As things opened back up, instead of everything returning to where we were, we had a rapid increase in demand for industrial and housing.

All this easy money and new demand created rapid growth in the stock market between 2020 and 2022. And along with it, so did sales prices of all types of real estate in South Florida.

Now guess what happens when sales prices go up in Florida? The Property Appraiser office hears all about it, and they start taking this all into account when feeding data into their Computer Assisted Mass Appraisal (CAMA) system.

They can put off raises to taxable values only so long, but with the record-breaking headlines hitting The Real Deal and The Miami Business Journal each week and especially so in 2022 (even as the stock market began to falter and drop into bear market territory) it was hard to keep back the raises.

Here we are at tax time, with CPI readings from hitting highs not seen since The 80s and the costs for repairs and materials, insurance, and other unavoidable expenses rising 10-20% per year the last two years.

Expenses outpacing the ability to raise rental rates?

If you found out that on top of these rising costs your real estate bill, typically the single largest expense for a landlord in Florida (we have no income tax to help fund the government) is also going up 20% what would that do to your returns?

Despite the headlines blaming landlords for predatory rents increases across the county, real estate is a balancing act of a business, either the rents increase to cover the increase in costs or cash flows decline so much that the value someone is willing to pay for an asset drops, possibly dragging a much larger chunk of the economy with it.

But not everyone is willing or able to raise rates to keep pace with their in increasing expenses.

Some landlords are locked into long term leases or situations where their ability or desire to continually chase higher rental rates can’t keep up with costs. If you’re in this predicament and your tax bill is out pacing your NOI growth, contact us before September 15th to help.

Dixon Commercial Real Estate has, for over 20 years, provided real estate tax appeal services in Miami-Dade County and knows all the best angles to at least keep your taxable values in line with your property’s ability to provide cash flows. We have saved owners thousands of dollars each year and can do the same for you. We handle all types of property, commercial, residential and vacant land, sign up now before the deadline passes.

You check your current assessed values at the Miami-Dade Property Appraiser website now, and the estimated taxes by clicking the TRIM Notice in the Online Tools section.

Unfortunately, there’s nothing we can to do to lower the cost of your landscaper, repairman, insurance premium or rising borrowing costs.

We are currently reaching out by email to all of last years clients to renew their appeal petitions for 2022.  If you have not received an email from us or want to discuss the appeal process.  Please call or email us today.

As a courtesy to our clients if we represented you last year (2021 Tax Year) and your assessed value has been raised we may decide to preemptively file a petition on your property to make sure you don’t miss your chance.

However, if you have bought or sold any property, please try to let us know by either entering the information in our online form or contacting us directly at 305.443.4966

If you have never worked with us before please fill out our online form and we will have everything we need to get the petitions in on time and we will follow up with you soon after the filing deadline if we need more detailed information.

As companies and institutions acquire real estate assets, either though purchase or defaults, the cost to hold these assets have a dramatic impact on net profits.  These costs include maintenance, insurance, management, utilities and real estate taxes.

Most of these costs can be deferred or controlled.  For example, if a property is vacant the required maintenance is nominal, insurance can be based on revised asset values, management costs are a function of rental income and utilities are based upon occupancy.  The only cost that must be paid but can be reduced is for real estate taxes.

Real estate taxes are a function of the assessed value multiplied by the millage rate.  The assessed value is established by the local government property appraiser, and the millage or tax rate is set by the taxing agency or government.  The millage rate changes each year with government needs.  As an individual, it is extremely difficult to influence the millage rate.  However, the assessed value of real estate can be reduced, resulting in a lower tax bill or a refund.

The Miami-Dade County property appraiser is responsible for the valuation of a very large number of properties.  For example, in Miami-Dade County alone there are more than 880,000 parcels.  This requires that properties are appraised on a mass-appraisal basis.  However, because each property is unique, the application of mass-appraisal techniques can create errors.

Some of these errors or issues can include the condition of the property on January 1st of the tax year, the actual size of the improvements and/or site area, the depreciated cost of the improvements, the assessment for the land, the net operating income and the tax assessment compared to comparable sales.

A property asset manager is responsible for producing the maximum net operating income for the property.  To achieve this, it is prudent, for the nominal cost of filing an appeal petition, to appeal the assessment each year.  The appeal presentation before the Special Magistrate can be prepared by the property manager, or an agent specializing in the tax assessment appeals can be retained. 

Typically, agents are compensated with on a percentage of the real estate tax savings.  This percentage ranges with 20% to 50% depending on the size and complexity of the assignment.  If there are no savings, then the cost is the nominal fee of $25 to file the appeal petition. If you would like more information, please feel free to give us a call.

-Thomas J. Dixon

Make sure you pay only your fair share. Appeal With Us.

The coronavirus pandemic has caused unprecedented and unexpected disruptions to almost every facet of our lives and this will surely flow through to the relationships between tenants and landlords and ultimately the valuation of real estate.

We hope that all our valued owners and managers will do everything they can to keep tenants in place and hopefully everyone gets back to work safely and soon.

If you are like us though, you probably had some difficulty with your tenants during 2020 that affected your property. For example, tenants not paying rent because they knew the eviction moratorium was in place or causing damage as they moved out.

Your real estate taxes for 2020 were likely unaffected by the disruptions and the governments mandated stay-at-home orders because the real estate values are based on January 1st of each year, and by all accounts real estate, especially industrial properties in South Florida, which were at phenomenal levels at the end of the 2019.

However, the 2021 appraised values for tax assessment purposes will need to take into account the lost cash flows, and loss of subsequent value that may occurred as a result of tenants businesses being shutdown, landlords proactively cutting rents or providing other incentives, or worse.

We expect to have a very active tax appeal season for the next two years because of this, and we urge all returning and new clients to attempt to keep notes on how the shutdowns have affected their properties and any deals they are making with tenants.  Most appeals will rely on factual numbers to analyze property, but personal stories are helpful as well.

The window to file an appeal open in August and runs through September 15th of each year. You will receive the TRIM (Truth In Millage) notice in August, but you will be able to check the proposed the new values online earlier. If you would like to have your property assessment reviewed for 2021, please use our online form or contact us today.

Please email us if you have any questions or concerns.

Apartments architectural design architecture balcony

Dear Clients and Friends

The coronavirus pandemic has caused unprecedented and unexpected disruptions to almost every facet of our lives and this will surely flow through to the relationships between tenants and landlords and ultimately the valuation of real estate.

We hope that all our valued owners and managers will do everything they can to keep tenants in place and hopefully everyone gets back to work safely and soon.

Your real estate taxes for 2020 will likely be unaffected by the disruptions and the governments’ mandated stay-at-home orders because the real estate values are based on January 1st of each year, and by all accounts real estate, especially industrial properties in South Florida, were at phenomenal levels at the end of the 2019.

However, the 2021 appraised values for tax assessment purposes will need to take into account the lost cash flows, and loss of subsequent value that may occur as a result of tenants being shutdown or landlords proactively cutting rents or providing other incentives.

We expect to have a very active tax appeal season for the next two years because of this, and we urge all returning and new clients to attempt to keep notes on how the shutdowns have affected their properties and any deals they are making with tenants.  Most appeals will rely on factual numbers to analyze property but personal stories are helpful as well.

We hope everyone is able to stay safe and healthy.

Please email us if you have any questions or concerns.

Hurricane Dorian, Thurday 11am Update

Once again it seems that a hurricane is threatening South Florida right as owners are receiving their TRIM Notice from the County that details their upcoming real estate taxes.

Because of this, we expect some disruption in our office hours between now and Sept 17th.

As a courtesy to our clients if we represented you last year (2018 Tax Year) and your assessed value has been raised we may decide to preemptively file a petition on your property to make sure you don’t miss your chance.

However, if you have bought or sold any property, please try to let us know by either entering the information in our online form or contacting us directly at 305.443.4966

If you have never worked with us before please fill out our online form and we will have everything we need to get the petitions in on time and we will follow up with you soon after the filing deadline if we need more detailed information.

Stay safe and prepared, South Florida.

Track Hurricane Dorian on the Official NOAA Website

 

 

We just finished creating an updated version of our “world famous” Township, Range & Section Map for Miami-Dade County using free GIS Data from Miami-Dade County and QGIS.

Download it here for a printable copy [DCRE 2018 TRS Map] Or invite us out for lunch and we’ll bring you an 11 x17 poster-sized version once they arrive.

 

At this time it does not appear that the County will be extending the Sept 19th, 2017 deadline for filing tax assessment petitions.

Because Hurricane Irma has disrupted our normal business hours, we will be preemptively filing on approximately 500 cases for clients that we worked with last year.

We will try to include any and all new clients that wish to appeal their tax values for 2017.  However, we may have to file later than usual, but we should have good cause to get the hearings granted as long as they are filed in the next week or two.

Please continue to use our online form to fill out information on new properties not in our database, or email us directly.

You can also call our offices at 305.443.4966, but we may not be available until Monday the 18th due to lack of power and internet.

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