Puleeeze. I was a commercial property renter for 20 years and my landlord's
lease contained prorated property taxes on my little piece of his property
every time, with a kicker for increases levied before the lease term
expired. If it's not negotiated out - it's in there, by provision or hidden
in the net rent.
Landlords may write out the checks. Renters pay the freight. And the market
rarely, if ever, denies a significant profit for property owners who rent
space.
Rental units are a gold mine for landlords, once cash flow out strips the
initial investment, and that is always within six months of purchase, if not
immediately. One of my best friends has been in the real estate development,
management and ownership business for many years and I've heard every story
you can tell. It still cash flows, even if the complaint about property
taxes cuts into it.
Renters don't pay taxes. HA!
Andy Driscoll
Saint Paul
--------
I (cannot) submit the whole system of my opinions to the creed of any party
of men (and women) whatever in religion, in philosophy, in politics, or in
anything else where I was capable of thinking for myself. Such an addiction
is the last degradation of a free and moral agent.
--- Thomas Jefferson (updated)
> From: "Becker" <[EMAIL PROTECTED]>
> Date: Sun, 8 Dec 2002 11:59:23 -0600
> To: <[EMAIL PROTECTED]>
> Subject: Re: [Mpls] Casinos Here, There & Everywhere
>
> From:Terrell Brown
>
>> Those who rent their homes continue to pay higher real estate tax rates
>> than those who own theirs, probably only because they are a more
>> effective political force (often called special interests). Renters
>> also tend include our lower income residents.
>>
>> Explain to me why a renter in Loring Park, Philips or Central should
>> have his or her home taxed at a higher rate than a home owner living on
>> Lake of the Isles. The owner of the little coffee shop at 29th and
>> Lyndale pays an even higher rate. Incidently in most states those
>> properties would be taxed at the same rates.
>
> In actuality, it isn't the renters that pay the property taxes. It is the
> business that owns the rental property that is paying the property taxes.
> That property is a commercial, revenue producing asset and as such, the
> higher tax rates reflect both the cost of taxing the property as someone's
> home and taxing the profits being made by the business, something I do think
> is appropriate.
>
> Now it is true that the renters are paying the total rent. But I think
> people often forget that rent is set on what the market will bear and not on
> the cost of providing the property. We have seen substantial increases in
> rents at a time when there have been substantial decreases in the tax rates
> of rental property. Why is that? One of the big factors is that from 1990
> to 2000, the population of the region grew 15.4% while the supply of rental
> property increased only 3.9%. Other factors also contributed like the
> number of people employed grew substantially, household size went down
> somewhat, suburbs seemed to only want single family detached houses, etc.
> The demand for rental property grew at a much greater rate than the supply,
> driving up the rents that people have been paying.
>
> At the same time, the costs of providing rental property have increased but
> the tax rates for rental property have decreased. The difference has gone
> to the property owner's profits. Because of the tax rate decreases, rental
> property ownership has become more lucrative, which has driven up the values
> of rental properties. So if you owned rental properties say ten years ago,
> you have seen a double bump, one from the icnreased value of your
> properties, and one from the increased rents that you can charge.
>
> I do believe that this bubble is deflating a but at the moment. The economy
> has created more unemployment, reducing available income for many people,
> the number of multi-family housing units has increased (last month, it was
> 50%/50% between single family and multifamily, indicating that possibly
> there will be an eventual overbuilding of rental property) and other factors
> are now resulting in the increased vacancy factor for rental property in the
> region.
>
> Carol Becker
> Longfellow
>
>
>
>
>
>
>
> _______________________________________
>
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