Every year all of us with Swope Investment Properties meet with appraisers with the Ada County Tax Assessors to get an idea of where they are seeing values. Below I provide some changes to this year's valuations, as well as some preliminary value increase percentages for residential and apartments. These are preliminary and could change by the time the assessment notices hit your mail box over the holiday weekend. The assessment process isn't perfect as the appraisers only drive by 20% of the properties a year. So there is a possibility that your assessed value is off and if so, I discuss the appeal process below.
Changes to 2015 Valuations:
This year you will see a new allocation of land value. My recommendation is to focus on the total value and not be so concerned with how it was allocated between land and the improvement (home or apartment).
The range of value increases for residential homes, duplexes, triplexes and four-plexes are from 0-30% with a median average of about 7-8%. That's a lot lower than I expected. Residential home values to include small multi-family use the Sales Comparison Approach. But when it comes to four-plexes, they may also look at Gross Rent Multiplier, especially if the value is being questioned.
Apartments with 16 units and more are looking at a median value increase of 15% and that's about what I expected to hear. Apartment values are determined by the income approach. As we've discussed over the last year in my other blog posts, we're seeing some new apartments selling at very high amounts with above market rents. The appraisers agreed that some of the rents they are seeing are not sustainable: "This is Boise, ID. The job growth and average wage doesn't support those rents."
If you think your valuation is off, I am happy to help. But we have to act quick. Your tax notice will include the name, phone number and email address of the assessor. If you believe your assessment is incorrect we will want to reach out to the assessor within a week or two of receiving the notice to hopefully be able to submit our appeal informally. Otherwise, it will take a formal appeal in front of the Ada County Commissioners. I have had success both ways. Although the year I appealed many was the year after the crash and it just seemed the assessors were a little behind the drop in values, just as they were a little behind with the increase in values the prior two years. I will do my best to help any client who reaches out to me, but it will be first-come, first-served.
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