Baby boomers, baby boomers, baby boomers; we all hear this term over and over again. So who are the baby boomers? Baby boomers are people in the United States who were born between 1946 and 1964. Approximately 78.2 million people fall into this category.

As a group, baby boomers comprise the largest population cohort in the history of the United States. The size of the group gives it vast influence over American politics, popular cultural, and of course, real estate. To evaluate the influence of the baby boomers on the future of real estate, the National Association of Realtors (NAR) conducted a study in 2006. The findings of the research were published in report entitled Baby Boomers and Real Estate: Today and Tomorrow. Below are some highlights from the NAR study.

AGE DISTRBUTION

According to the NAR report, baby boomers now range in age from 42 to 60 years old. The typical baby boomer is 50 years old, and the oldest of the baby boomers turned 60 in 2006. About 46% of baby boomers are in their 40s, and about 25% are at least 55 years old.

HOUSEHOLD INCOME

As a group, baby boomers are in their peak earning years. In 2005, baby boomers had a household income of $64,700, and about 25% them had a household income of at least $100,000 per year.

HOME OWNERSHIP

About 78% of baby boomers own a home, which is higher than the national ownership rate of 69%. About 96% of baby boomers believe that home ownership is a good financial investment.

FUTURE REAL ESTATE PURCHASES

About 10%, or 7.8 million of all baby boomers, said they were likely to purchase additional real estate in the next 12 months. Of these potential buyers, two-thirds were planning on buying a primary residence, 26% want to buy land, 19% want rental property, 15% want a vacation home or seasonal home, and 14% want a commercial property.

WHAT FEATURES ATTRACT BOOMERS

When baby boomers were asked about what features are most important to them, 38% wanted a lower cost of living, 38% wanted to be near family, 38% wanted easy access to quality health care, 37% wanted a better climate, and 36% wanted to be near a body of water.

PREFERRED COMMUNITY AMENITIES

When baby boomers were asked about the type of community amenities that interest them most, about 18% wanted to be near cultural offerings, 9% wanted to be closer to their family, 4% wanted to be on a golf course, and 3% wanted easy access to educational facilities.

WHERE DO BOOMERS WANT TO RETIRE

When baby boomers were asked about where they want to retire, 33% of them want to retire in a rural area, 30% in a small town, 25% in a suburban area, and only 12% in an urban community.

BOOMERS AND THEIR REAL ESTATE AGENTS

Baby boomers consistently use the services of a real estate agent. Approximately 60% of homebuyers and 79% of home sellers used a real estate agent in their last transaction.

SUMMARY

The baby boomers have had and will continue to have a significant impact on the real estate market. As the boomers near retirement, they continue to value real estate and will continue to invest in properties and land. Real estate agents would be well served to understand what baby boomers want in terms of their real estate investments, and design strategies that target the needs of this enormous population cohort. For more information, read the NAR report entitled, Baby Boomers and Real Estate: Today and Tomorrow

Are you a property investor who is planning on renting the property out? If the answer to this question is yes then you will be one of the many people who are in need of a property manager.

When it comes to handling and managing all of the aspects that are involved in the rental business it can often become overwhelming. Many people who buy property with the intention of renting it out lack the necessary skills to do this successfully. By gaining the help of a property manager however you shift the responsibility of doing this onto someone who is trained and experienced in all aspects of property management. Property management is a great resource that leaves you free to get on with other aspects of business and your life while you have peace of mind that your property and/or rental business is in safe hands.

A property manager will be just what you need to help you get your head around the rental and property market. You will be able to learn how to handle marketing, leasing, billing and rent collections as well as repair and maintenance work. More importantly however, property management will be able to inform you of where you stand with the law and what rights you have when it comes to tenants and the structure of the building.

By using the help from property management you are gaining a valuable resource. The skill set of a property management team is ongoing; as well as the above a property management team can also produce financial reports and security deposit escrows. A property management team will be able to provide you with detailed income and expenses reports as well as cash statements every month, which saves you the headache of bookkeeping. Property management also involves providing you with end of year tax reports for the use of your accountant or financial advisor. A property management team really can help you with every aspect of your property and/or rental business.

The concept of property management is a people business. This is because every time you enter into a new lease you are starting a new relationship with a tenant and within this relationship you will have to play many roles such as landlord, friend and foe to name merely just a few. Your property management team will play all of these roles for your tenants and are trained to do exactly this.

With a property management team you will be gaining years of marketing expertise, which means a property management team will be your best source of knowledge when it comes to marketing your property so that it will be rented in the quickest time possible. Your property management team will also have local knowledge of the rental rates so they will be able to determine the highest rental rate that is possible for your property.

Property management can do so much for you when it comes to property investment. They will be your biggest resource when it comes to gaining and keeping tenants so my advice to you is to get on board with a property management team today.

How exactly does your city come up with your property tax value?  Are you concerned that your property taxes might be unfairly high and want to see if you are eligible for a property tax reduction?   That is what we discuss here. 

First of all, no matter how confusing your property tax statement is, with all of the various terms, ratios, millage rates, etc calculating property tax really boils down to only a few factors:  the market value of your property, your cities assessment ratio and the tax rate. 

The market value is what your property would sell for on the open market, without any “undue influences,” like being in a state of foreclosure, structural issues with the property, short sales time frame, etc.  Again it’s what your property sells for under a normal sale.

Property Tax Value

The assessment ratio is very important to calculating your property taxes and is what is sometimes referred to as your “property tax value”.  What cities do is multiple your market value, by the assessment ratio, the resulting number is the property tax value. 

For example if your properties market value is $500,000 and your cities assessment ratio is 80% your property tax value would be: $500,000 x .80= $400,000 property tax value.

Assessment ratios vary from state to state and from jurisdictions.  Your assessment rate could be totaling different than your neighboring town.   

Property Tax Valuation

The tax rate is also known as a millage rate and is the actual rate that property owners pay in their given town.  Like the assessment ratio the tax rate varies from town to town and also from property types.  For example a commercial property will be taxed at a different rate than a single family home.   In addition, a single family home used as a rental property will normally be taxed at a high rate than a single family home that is occupied by the owner. 

To figure out your annual taxes you multiple the tax rate by the assessed value.  For example take the assessed value of $400,000 x .020 (tax rate/millage rate) = $8,000 in annual property taxes. 

On a property tax appeal you can only debate the fair market value of your property.  You cannot argue the tax rate or the assessment ratio (unless they made a mistake and recorded your property in the wrong category).  But again, you can only argue the assessors opinion of your properties value.  Keep in mind that most cities assessors are over worked and or under qualified, so they very often make outright mistakes.  If you know of other similar properties in your area that sold for less than what they have recorded your property at, than you most likely have a case and could save a lot of money. 

Don’t be like the 98% of property owners that don’t bother to appeal their taxes.  They are leaving thousands of dollars on the table for no reason.  The process to appeal is really not complex and won’t eat that much of your time.  Hope this answers your questions regarding property tax value.