Well, it happened. Our property tax bill crept past 5 figures this year! We just sent off the checks to the county and are still reeling from sticker shock.
No, that’s not our sprawling 5 bed-, 7 full- & 2 half-baths estate mansion (looks really nice though.) The tax bill covers our primary home, a rental property, and a recently-acquired investment property. The tax went up 3% this year and in this economy every little bit stings. The property value is still down…why does the tax bill keep rising? Oh yeah, it’s because the county can’t keep a budget. I’m going down to see the Board of Property Tax Appeals, but I doubt it will do any good.
Writing off big checks to the county sucks, but I would rather do this than sending a check to the bank every month. The bank loves this check from homeowners. They can earn interest for 12 months from your money. (Can the banks leverage this money? I couldn’t find any info on this.) Instead of sending a check to the bank, I put it in my investment account and put it to work. We just have to be aware that the bill is coming in November and be ready with the cash one to two months before the bill is due. Of course, we have to be very careful during the down market and make sure there is enough in our emergency fund to cover the bill in case of another stock market dive. A high yield savings account is also a great option to at least get some interest from it if you think stock/bond is too risky for this short time line.
We also pay our own homeowner insurance and haven’t had any problems so far. If you are discipline and know how to save, it is better to have the money in your account rather than in the bank’s escrow.
What about you? What is your strategy for dealing with property tax? Do you just let the bank deal with it? Do you think the big bill in November is too much trouble?