Are you a commercial property owner? Have you ever been asked to provide rent rolls and operating statements? These rent rolls are an all-inclusive document utilized by individuals such as buyers, investors, sellers, property managers, landlords, lenders, appraisal districts and property tax consultants to estimate the market value of a property. As many appraisal district rent models differ from actual rents, these documents can be key to getting a fair appraised value on your property.
Rent rolls provide proof of the rental income earned from the specified commercial real estate asset. These documents are essential for proving the value of a rental property and all the information, including the length of each lease, list of tenants, etc., and helps estimate the determines the earning potential of a rental property.
The earning capability of a commercial property is so important because it, after the application of an appropriate capitalization rate, derives the valuation from the county tax assessor. Thus, keeping up-to-date rent rolls are the key to performing your due diligence for determining the financial security as well as profit and loss risk. Making sure the value conclusion you’ll be paying tax on is no more than appropriate.
Market Growth and Market Value
The booming growth of major cities in Texas has directly contributed to the rise in residential real estate prices, and the same can be said for commercial property. We all know, as property values rise, property taxes also go up. History demonstrates that a thriving real estate market encourages appraisers to be much more aggressive with assessed values than they might have been in a cooler market.
Having current rent rolls and operating statements will benefit you in the long run because they can be used as evidence to protest your high values. Don’t let this overwhelm you because there is an easy solution. Contact us today to learn how we can help you appeal your property tax valuation and reduce your tax obligation for 2023.