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Property Taxes

Total annual property tax cost based on assessed value and tax rate.

Example Result

Sample Data
$5,775

Based on a sample $385,000 property with $2,850/month rent, 20% down, 7% interest rate.

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Property Taxes Formula

Monthly (Property Value × Property Tax Rate) ÷ 12 $481/mo
Annual Property Value × Property Tax Rate $5,775/yr

How This Value Changes Over Time

At Purchase / Year 1 Property Value × Property Tax Rate
Over Time (Year 5) Appreciated Property Value × Property Tax Rate

What This Means

A sample property priced at $385,000 with $2,850/month rent has a property taxes of $5,775 at Purchase (Month 0). Property taxes are assessed by local governments and vary dramatically by location — from under 0.5% in some states to over 2.5% in others. A property that looks attractive in a low-tax state may perform very differently in a high-tax market. Understanding your annual tax burden in dollars (not just as a percentage) helps you accurately budget, compare properties across markets, and stress-test your cash flow projections.

Where This Value Comes From

Property Taxes is not entered directly — it is calculated from Property Value and Property Tax Rate. See the formula breakdown above and the detailed inputs below.

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Why It Matters

Property taxes are assessed by local governments and vary dramatically by location — from under 0.5% in some states to over 2.5% in others. A property that looks attractive in a low-tax state may perform very differently in a high-tax market. Understanding your annual tax burden in dollars (not just as a percentage) helps you accurately budget, compare properties across markets, and stress-test your cash flow projections.

Detailed Explanation

Annual Property Taxes is the total dollar amount you pay in property taxes each year, calculated by multiplying the property value by the property tax rate. This is one of the largest fixed operating expenses for a rental property and directly reduces Net Operating Income and cash flow. Unlike mortgage payments, property taxes typically grow over time as assessed values rise.

Example

Sample Result
$5,775

Based on a sample $385,000 property with $2,850/month rent, 20% down, 7% interest rate.

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