A surge in property tax bills in states such as Texas, Florida and Georgia is stinging landlords.
Single-family rental company American Homes 4 Rent expects its Texas property taxes will jump more than 20% this year, according to an earnings release Thursday. Rival Invitation Homes Inc. said last week that its tax bill this year will climb 7% to 8% due to higher costs in areas such as Florida and Georgia. Smaller landlords are also feeling the elevated property tax burdens.
The high tax bills, a leftover effect from the pandemic housing boom, have caused some landlords to push back against the assessments. It's not all bad news, since the higher costs reflect the fact that the value of the companies' properties has increased.
"Taxes are going up because values are going up, meaning the value of the assets they own are going up," said Jeffrey Langbaum, an analyst at Bloomberg Intelligence.
Landlords can appeal their property tax assessments — as Invitation Homes is planning to do for a higher portion than in past years — but the process takes time between when they pay the full amount and when they may receive any rebate.
"Our expected property taxes have been impacted more quickly than we had anticipated due to rising home-price appreciation," Invitation Homes CEO Dallas Tanner said in a statement last week.
Sun Belt
Landlords in the Sun Belt have been particularly under pressure as home valuations skyrocketed in that region over the past few years, said John Pawlowski, a managing director at Green Street.
That's hit property owners including Matthew Haines, who has three apartment complexes in north Texas as well as some single-family rentals. He said his taxes have about doubled over the last four years. He's now in the process of selling a 60-unit building due to rising costs as well as issues with renters who haven't paid.
"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."
— With assistance from Patrick Clark and John Gittelsohn
