Reduce Short-Term Rental Property Taxes

In this episode of the Hospitable Hosts podcast, we are joined by Sam Thrash, Head of Partnerships and Client Success at Ownwell. It’s a property tax service that combines technology and local expertise to help real estate owners save money on property taxes. Hospitable has partnered with Ownwell to help our users keep more of their revenue when property taxes increase.

In the episode, Sam breaks down how property owners can reduce property taxes on rentals through appeals. He explains how the process works, why over 90% of property owners take no action, even though many of them are overpaying their property taxes, and how Ownwell can handle everything from filing appeals to negotiating with assessors if you don’t have the time to complete the process yourself. 

Press Play now to find out how you can maximize your returns by reducing your property taxes and how Ownwell can manage the end-to-end tax appeal process, saving you time.

If you prefer to read the highlights, we’ve got a summary of the key takeaways below.

What Problems Ownwell Solves

Sam says the company’s headquarters are in Austin, Texas, and most employees are based there, but they also have tax consultants local to the markets they operate in.

“Ownwell exists because most property owners treat their property tax bill like a utility bill,” he explains. “They get it, they pay it, no real questions asked. And that's costing them some real money.”

According to the company’s estimates, between 30% and 60% of property owners are overpaying property taxes at any given time. That happens because over 90% of property owners across the country take no action to challenge their property tax assessment.

“Most people don't realize they can, or they don't know how, or they simply don't have the time. So we built Ownwell to reduce that friction, to make sure property owners are paying no more than they should. And we combine local licensed property tax professionals with proprietary technology that handles the entire process from end to end.”

Sam notes that property taxes are often the single biggest operating expense for many rental property owners. And what makes it different from other cash flow optimization strategies is that reducing property taxes requires no real capital or changes to your operations.

“Every dollar you save there drops straight to the bottom line. It’s something that often goes overlooked, but it can be really important for your business.”

Hospitable users get 15% off Ownwell services with this link: https://www.ownwell.com/partner/hospitable 

About Property Tax Assessment

Property assessments determine how much you owe in property taxes. Sam explains that assessments are based on what the assessor in your county believes your property is worth. Unfortunately, the process is not very precise because assessors largely use what's called mass appraisal techniques. They're leveraging statistical models applied across entire market areas and public records, but they may not have the full picture.

“No one’s walking your property. No one’s accounting for the deferred maintenance, the functional limitations, the obsolescence, or the unique characteristics of your property. The model treats a property like an average, but it often isn’t one. And on top of that, there’s a lag problem: assessors are looking at a market historically, so what we tend to see is that it doesn’t always reflect the current market.”

That’s where Ownwell comes in. They check your assessment to identify errors, look at your property at an individual level, and make sure it's fairly assessed so you don’t overpay.

Evidence You Need to Gather to Appeal Property Assessment

“The single most important document in property tax management is the assessment notice itself, sometimes called a notice of appraised value, or just a notice of value,” Sam underlines.

“The reason it’s so important is that the moment it arrives in the mail, the clock starts. In most of the jurisdictions we operate in, you have anywhere from 25 to 60 days from the date of that notice as your deadline to take action. And if you miss that window, you have to wait until the next year, or maybe even the next reassessment cycle.”

Sam further explains what evidence you need to gather once you decide to take action:

• Comparable sales—data about similar properties that have been sold recently in your neighborhood

• Your property characteristics data (square footage, number of bedrooms, asset quality, etc.) to make sure that what the county leveraged is accurate

• Condition evidence—photos, quotes, or invoices for repairs, documentation of functional issues or location disadvantages that may affect market value.

“In some markets, there's a concept of equity or uniformity comps that can also be leveraged in your case,” he adds. “This is the data and evidence that Ownwell compiles on behalf of our clients, but it’s also the type of thing you’d want to put together if you chose to pursue this yourself.”