Buying a Bellevue Rental Property: How to Consider Property Taxes

By Real Property Associates

Looking for a new investment? Property taxes are one of the most important factors to consider when buying Bellevue rental properties. Bellevue real estate management companies will help you find new homes for rent by evaluating the rental market—including property taxes and how they can affect your returns. 

How do taxes impact the decision-making process for investors? Our property management experts weigh in!

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Where Can You Find Property Tax Information?

Assuming the taxes for a potential investment are the same as where you live (even in the Seattle or Bellevue, WA, area) can be a costly mistake. Property taxes can vary depending on a home's location. It's critical to use accurate tax rates when evaluating the potential expenses and rental income before purchasing a new rental.  

The best way to get an idea of how much your Bellevue rental property tax bill might be is by looking at similar properties in the area and calculating the average tax rate per year. Investors can also connect with the local tax assessment office to get current and past tax rate information. Municipality officials might also be able to tell you about any recently passed bonds or rate increases that could affect your property long-term. 

Working with a property management expert is also an excellent way to learn about specific tax rates that apply to an investment and how those rates can affect your returns. When evaluating a property, the monthly rent amount must cover all expenses, including annual property taxes. The right property management experts can also estimate ideal rental rates to predict a rental's potential income accurately. 

Should You Avoid High Rental Property Taxes?

High property taxes might be a red flag that a rental's ongoing expenses are too high to generate enough revenue to offset those costs. However, property management experts will tell you that's not always the case.

Rental property owners shouldn't always avoid a property with high taxes simply because the taxes are high. A property manager knows that with higher tax rates come better city services, nearby amenities, schools, parks, and more. Depending on your target renters, property tax rates can help you deliver a better all-around rental home experience for families that prefer excellent schools and plenty of high-quality city services. 

It's important to make sure high taxes aren't "too" high to justify the answer to "how much can I rent my house for?" Property management experts can verify that if you need to set the rent higher than what the market indicates is a competitive rate, you'll struggle to find good tenants willing to pay that much for your rental home. 

Are Low Tax Rates Ideal?

You'll reduce ongoing costs for your investment property with properties in areas with lower tax rates, but you might also sacrifice quality for the home and local amenities. Lower tax rates make a property more affordable to operate. However, a property management team can tell you that these areas might not have good schools, excellent city services, parks, or resources. 

Neighborhoods with low tax rates can also be high crime areas and consist of homes needing significant repairs. Even if you invest in renovations to improve the quality of a property, neighboring homes, and businesses might not mirror what you've improved about your property. 

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Find the Right Balance With Property Manager Insights

When choosing a new real estate investment, a property manager will tell you that there's no cut-and-dry answer to the "ideal" tax rate that makes the most financial sense for your goals. Property owners must find the right balance of tax rates that deliver quality homes in in-demand communities with excellent municipal resourceswithout making a home too expensive due to high property taxes. 

The best Bellevue property management experts understand how to find the right balance of tax rates, potential income, and other expenses to guide investors to the best rental properties. Long-term success is critical when investing in real estate. A property manager can help you learn about historical tax increases, current rates, and potential increases to get a complete picture of a property before making your next investment. 

After finding the best new rentals, a rental manager also delivers expert property management services to maximize income, keep ongoing costs low, and boost ROIs! Before risking a bad investment, make sure you have the latest rental market data and the experience of property managers to help you avoid bad properties!

A Property Management Company Guides Investors to Better Properties and ROIs!

When choosing a new investment, rental owners must consider property taxes. Local tax rates can affect your returns, even if the home is precisely what Bellevue and Seattle renters are looking for! This might seem like an unnecessary expense to think about when shopping around, but it’s not just mortgage and monthly costs that impact your bottom line. Local tax rates may also significantly affect whether or not this deal makes sense for you in terms of ROI. 

To help you get all these crucial details sorted out before getting too far into negotiations with a seller, we recommend talking with a full-service property management company first! Real Property Associates is here to help you analyze rental market data, tax rates, and more when choosing your next investment. 

Learn about excellent rental properties with a free copy of the "Biography of the Perfect Investment Property."

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