Menu
Chris S.:
Hi, my name is Chris and I live in Austin, Texas.
Interviewer:
Chris, tell me a little bit about where you live in Austin and a little bit about this rental property that you own.
Chris S.:
So I moved to Austin back in 2014 and I decided to purchase a rental property. It was a duplex and it was about 10 minutes from downtown and figured it would be a great investment because everyone was moving to Austin. And one of the things about Texas is we don’t have a state income tax. So they make a lot of their money from property taxes. So property taxes can get pretty high in Austin and as the price of the homes and the valuation of the homes goes up that starts to eat into cash flows. So after about six years of owning the property tax rates were actually going up faster than the rent. So it started to eat into the profitability of the rental property.
Interviewer:
So you were losing cash flow because of these tax rates?
Chris S.:
So as a landlord, it’s tough because you want to provide competitive rates to your tenants and you also want to provide fair rates to tenants and, if you charge too much, then you deal with vacancies and you each just have a higher likelihood of default. You are bound by what the rental rates in the area are, but the city can change the appraisal rate as aggressively as they’d like to. So it introduces a lot of uncertainty and risk when you’re forecasting with the rental property and how much cash you’ll have in the future to be able to afford repairs and maintenance and just be able to take care of the property.
Interviewer:
What was your reaction to your annual property value assessments from the County?
Chris S.:
When I started seeing the valuations go up from the appraiser, I was excited just because it was like, Oh, cool, the investment is paying off. Austin is becoming more valuable. But it was also, I have to pay taxes on that now. And what’s difficult about that appraisal amount is it’s an estimate based on you know, comparisons, right. They have a lot of data points that they use to try to get that number, but anything’s only worth what people are willing to pay for it. So the first thing that was kind of difficult was, how do I actually know that’s the actual value of the home? If I listed it today, would I actually get that much for it not, I’m not totally sure? And the more important point was that that wasn’t my plan anyway. I wasn’t planning on you know, selling anytime soon. So it’s a, it’s difficult to watch, you know, cash flows get eroded by not an arbitrary number, but a, a somewhat, somewhat arbitrary value.
Interviewer:
Have you ever protested your property value assessment from the County before?
Chris S.:
So I have protested for, I have processes for my primary residence. I protested in the past and I went through a firm here in town. They did get my property value down. Not as much as Home Tax Shield did for, but either way, the savings were larger and with Home Tax. So not only did they perform better, but it was actually a more affordable service
Interviewer:
How much were they able to save you?
Chris S.:
I’ve got this report on my screen next to me, that kind of shows me the breakdown of how Home Tax Shield performed. And my property was appraised at $326K by the County and after Home Tax Shield protested it, they brought it down to $303K which was a value reduction of $26K and at a tax rate of 2.2%. The savings for 2020 was $583. And the five-year tax savings was $3,222.
Interviewer:
That’s a pretty significant amount to have available for reinvesting in your rental property.
Chris S.:
$583 is pretty close to the amount that it costs to replace a motherboard on an air conditioning unit, which we had to do this year.
Interviewer:
What was the process of working with Home Tax Shield like for you?
Chris S.:
Working with Home Tax Shield was surprisingly simple. I literally just answered a couple of emails and I think that’s about all I had to do. I don’t remember doing anything else except maybe DocuSign. I think I had literally two correspondence and then I got this email that was like, we saved a bunch of money. It’s like, awesome. Where do I sign? It’s a, it’s a killer product. And it’s awesome. It was, I can’t believe how little you had to like get me to do,
Interviewer:
Did you feel informed or were you at all confused during the process at all?
Chris S.:
The communication was rock solid. It was confirmed as soon as I was like, Hey, let’s work together. They gave me a timeline and a list of events and next steps. And then I would get random updates that would say like, Hey, we’re going to the courthouse to the protest on this date. There’s nothing you have to do. Just wanted to let you know, and then I would get another update that was like, Hey, we protested it. And now we’re awaiting the results we should know by this time, nothing you have to do, just, you know, just letting you know. And then I got an email that was like, Hey, we saved you $583! It was so simple.
Interviewer:
Did you ever have to appear in person as you protested your property taxes?
Chris S.:
I never had to leave my computer. I literally just, it was all through email.
Interviewer
Do you remember from when you first submitted an email to them on their website, versus when you got that final results email with your final number?
Chris S.:
I signed up in May of 2020, and I got my results in November of 2020.
Interviewer:
Did you feel like this process helped you get to a fair tax value for your properties?
Chris S.:
So all I really wanted was to get a fair value. I’m happy to pay taxes and support the community with those taxes. I just want to make sure that the number that was assessed was fair. And I just think it’s nice to have a little bit of dialogue and a little bit of disagreement so that we arrive at whatever’s the appropriate value for the home. Home Tax Shield was able to represent my interests and help us get to a more appropriate value of the house.
Interviewer:
Did you believe that their pricing was fair for this service?
Chris S.:
One thing I liked about Home Tax Shield is that it was less expensive than previous companies I had worked with. Not only were the fees less than the others that I had used in the past. But they were really fair with the pricing. They took, I believe it was 30% of the savings for 2020. And I didn’t have to lift a finger to do that. So I thought that was more than fair.
Interviewer:
What will you do with the five-year savings that you’re anticipating here? What are your plans for using that additional cash flow?
Chris S.:
Home Tax Shield has forecasted to save us a couple of thousand dollars over the next five years. I haven’t decided what we’ll do with that. It makes it easier to maintain a minimum cash balance, above and beyond repairs. But we might be able to do a slightly higher distribution to the partners, which would be nice.
Interviewer:
All in all, would you say that you were happy with everything you experienced with Home Tax Shield?
Chris S.:
I am stoked with how my experience with Home Tax Shield went. It was so simple. The reappraisal was fair, the fees were absolutely fair and it added zero stress to my life and decreased my tax bill. So I’d say it’s a pretty good deal.