[quote=bearishgurl]Food for thought and two questions for Piggs:
If you owned a SFR in SD County in good shape which was worth $400K, it had a current tax bill of $600 per year and could fetch $1750 in monthly rent, would you ever sell it?
If you had one or two siblings and your last parent recently passed and left their principal residence in San Diego County (a SFR worth $550K) to all of you in equal shares, would you attempt to purchase your siblings’ portion from them (~$275K – $367K) to take title to use the property for a rental investment? Current assessment is $78K, resulting in a current tax bill of $850, which would carry over to any new (child or granchild) owner. Monthly rent would be $2200 – $2400.[/quote]
Would I? Maybe to both scenarios. The lower tax just factors into the cash flow and roi. Are you an experienced landlord? Do you own the 400k property free and clear?
If the properties were old run down homes and you were not ready to be a landlord, then the inexperience and a couple bad tenants could wipe out the lower tax rate pretty quick. You could sell the properties and put the money into the market and probably fair just as well with no headaches.