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Commercial Property Tax: Valuation Tools You Shouldn’t Be Without

Posted by Brandon Van Volkenburgh on Nov 19, 2018 8:11:45 AM

Commercial Property Tax: Valuation Tools You Shouldn’t Be Without

If you’ve read our blog at all, you know our stance on using software to manage your team’s property tax processes: We’re all about automating commercial property tax management workflows, so you get back time for high-value tasks, like determining how to protest unfair assessments.

Once you’ve streamlined your processes, however, you need a different arsenal of tools—ones that can help you make the most of your commercial property tax appeals. We won’t leave you hanging. Below are our recommendations for top-notch software applications that can help with both analyzing your appeal opportunities and supporting your appeal, one for (almost) every commercial property valuation method available. If you aren’t using one or more of these already, you might not be saving your organization as much money as you could.

Do you use an application not mentioned here? Tweet us @crowdreason and let us know what it is!

Advanced technology can transform the way your team practices property tax for the better—find out what tools other tax professionals are using to get ahead.

Must-Have Software For Appealing Commercial Property Tax


1. ARGUS—For The Income Approach


For a quick refresher, the income approach is a common way of determining value for income-generating properties. ARGUS is an industry-leading software tool that can help you translate lease information into financial data. It calculates expected future cash flow based on information you enter about current leases in a building and the rental market in which the building is located. The software also has lots of additional features that make gathering intelligence about a property easier, like detailed valuation reports and summary reports. It’s particularly helpful if the property you’re valuing has many different leases with different expiration dates and complex lease provisions.


2. CoStar—For The Market Approach


The market approach determines the value of a commercial property by comparing it to the selling prices of other, similar properties. That means you’ll need the most current real estate values available—and you can get those from CoStar. CoStar updates and verifies its market information at least every 30 days, and it is widely relied upon by many industry professionals. And you can access the information fast, which is a bonus when you’re performing multiple calculations to find the valuation that’s most advantageous for you.


3. Marshall & Swift—For The Cost Approach


The basis of the cost approach is to ask: What would it cost to replace this asset today? For that, you need an accurate source of commercial building cost information. With Marshall & Swift you get access to regularly updated building cost indexes for more than 800 geographical areas in the U.S. and Canada, making it one of the most comprehensive databases in the marketplace. And to make sure you get a “complete and defendable” determination of value, its building costs also incorporate three cost methodologies (square foot, segregated, and unit-in-place). There’s just no better resource for accurate, current cost information.

That covers three methods you can use for a commercial property tax appeal, but what about the fourth? The uniformity, or fair & equitable, approach involves determining if your assessment is in line with those of other, similar neighboring buildings. While there are applications that have property data, there aren’t any good sources for the latest assessment data. For that, you’ll have to go directly to assessors.

What’s next? Prepare your commercial real estate property tax appeal with TotalPropertyTax.


Once you’ve determined a need to appeal your assessment(s) and compiled the necessary data to support an appeal, you can use TotalPropertyTax (TPT) software to help file and manage it. From an Argus report, for example, you can upload data into TPT for recordkeeping. Our software then helps you:

  • Track missing assessment notices according to protest deadlines.
  • Create appeal packages quickly, including appeal forms/letters and custom attachments.
  • Track hearing dates and locations, and create notes related to your appeal.

To discuss how our own software can help your organization successfully navigate commercial property tax management and appeals, get in touch. We’d love to hear from you.

 

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Topics: Property tax software