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Browse every published article connected to Patrick Oconnor, with exact attribution and full-archive search.
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The sales comparison approach is the most intuitive and best understood of the three approaches to value. Home buyers, companies renting office space and real estate investors all utilize this approach. Comparable sales are often referred to as comps and rental comparables are often referred to as rent comps.
Overview Harris County Appraisal District's i-Settle program is worth considering. However, for most property owners it is a poor choice. O'Connor & Associates' experience with i-Settle yielded three conclusions: The settlement rate was very low (about seven percent) When settlement offers were extended, the tax reduction was low It was not worth the effort Benefits of an Informal Hearing Most property owners appealing on market value at Harris County Appraisal District, will achieve their best result during the informal hearing in a settlement negotiation.
Tax Rule No.1: Don’t cheat the IRS. But that doesn’t mean you should cheat yourself. Take every legal tax deduction you can.
Tax reductions and tax deductions are both benefits of cost segregation. However, it would be inaccurate to term cost segregation a tax shelter. The IRS has written a manual titled Audit Techniques Guide that delineates methods to establish depreciation schedules and increase tax reductions.
Financial Modeling is essential for making decisions to acquire, keep or sell investment real estate. The central aim is to provide a framework evaluating options and risks. Financial modeling is also utilized for decisions regarding material capital expenditures and leases. Financial modeling is used regularly by operating businesses to make a variety of decisions. Properties with multiple complex leases particularly benefit from the use of complex software such as Argus to evaluate the effect of leases terminating and being renewed overtime.
Tax reduction and tax deferral are the primary benefits of obtaining a cost segregation study. Tax reduction occurs since more income is taxed at the capital gains rate instead of the ordinary income rate. Tax deferral occurs since depreciation is accurately taken in the early years of ownership.
Silver Lining from Hurricane Ike Hurricane Ike inflicted a steep penalty on the Texas Gulf coast. However, there is an inconspicuous benefit – casualty loss tax deductions. Taxpayers may be able to take a 2008 deduction if either personal or business property was damaged by Hurricane Ike. Meaningful Deductionsr
Taxes are your enemy, but tax deductions are your friends. Taxes are the great bane of most businesses. Alas, business deductions act as a salve to cool the burning and itching of your bank account. Business taxes can be summarized simply as calculating your total revenue, reducing this amount by as many tax deductions as you can and then paying tax on the remaining amount.
Sam sold 2 commercial properties in June 2008 and was discussing tax planning with his CPA and cost segregation provider. The sales price for the properties was $5.2 million and $3.3 million. Sam had owned both properties for about 8 years. The cost segregation specialist estimated Sam could save more than $175,000 in 2008 income taxes. This would be accomplished by using cost segregation and “catching-up” previously under-reported depreciation.
Homeowners are amazed to learn they can obtain a copy of the appraisal district's evidence at a nominal cost. This is referred to as a House Bill 201 package, and is the only information many homeowners use to successfully reduce their property taxes. Obtaining a House Bill 201 package when appealing your property taxes can greatly increase your chances for a successful appeal. House Bill 201 is the term used by property tax consultants to describe provision 41.461 of the Texas Property Tax Code. This section reads as follows:
Due diligence is an essential step in real estate investment. After selecting the property type and geographic location, the investor needs to ascertain he has accurate information regarding the physical asset, financial performance, tenant base and future prospects for the subject property. Due diligence helps the investor accomplish those tasks. Due diligence can provide in-depth data and insights for these areas and mitigate the risk of a real estate investment. The costs associated with due diligence are minimal compared to the costs of making an imprudent investment decision.
The first step to annually appealing your property taxes is to send a written notice to the appraisal review board (ARB) for the county in which your home is located. Even if you have not received a notice of assessed value from the appraisal district, file a notice of appeal by May 31st. You can file a notice of appeal by utilizing the Comptroller's form or by sending a letter to the ARB. The letter to the ARB simply needs to identify the property being appealed and the basis for your appeal. You should always appeal on both market value and unequal appraisal.
For many homeowners, the property tax appeal process can seem too difficult and therefore only about 8% appeal even though 70% of those who do appeal are successful. Most homeowners also do not realize that their appeal can be resolved at the informal hearing. Here are some tips on attending an informal hearing for property tax appeals:
Property taxes are a substantial expense for Texas homeowners, averaging about $3,600 annually. To reduce this expense, property owners should annually review and consider appealing property taxes. While there is no guarantee that an appeal will be successful, a recent survey conducted by O'Connor & Associates indicates that 70% of property tax appeals are successful.
Are Nearby Stores Complementary? Next review whether the retail space you are considering is complementary to nearby retail establishments. For example, it would not be appropriate to put a liquor store adjacent to a school for troubled children. However, a dry cleaners, nail salon, office supply store and dollar store might all fit well in their neighborhood shopping center anchored by a major grocery chain. Complementary Stores
How To Request Binding Arbitration Thousands of Texas homeowners will go through the property tax appeal process this year because the appraisal district incorrectly assessed their home's value. Sometimes getting a satisfactory reduction takes some time, but it is important to utilize the options available until you are offered a fair reduction.
Taxes are your enemy, but tax deductions are your friends. Taxes are the great bane of most businesses. Unfortunately, business deductions act as a salve to cool the burning and itching of your bank account. Business taxes can be summarized simply as calculating your total income, bringing down this amount by as many tax deductions that you can and then pay taxes on the rest of the amount.
Silver Lining from Hurricane Ike Casualty Losses May Significantly Reduce Federal Income Taxes Hurricane Ike inflicted a steep penalty on the Texas Gulf coast. However, there is an inconspicuous benefit – casualty loss tax deductions. Taxpayers may be able to take a 2008 deduction if either personal or business property was damaged by Hurricane Ike.
Investors usually have a basic premise for making a particular investment. O’Connor and Associates terms this concept the “investment hypothesis”. Evaluating the accuracy of the investment hypothesis early in the acquisition process allows the investor to increase their returns and reduce due diligence expenses. Following are examples of typical investment hypotheses: This property will yield an unleveraged 7% return based on its current revenues and expenses.
Commercial comparable sales data is essential for Austin real estate professionals in making reasoned decisions regarding buying, selling and financing real estate. Accurate and timely commercial comparable sales data provides investors, brokers, lenders and appraisers the edge and advantage they need to efficiently make prudent decisions. Real estate professionals in Austin, Texas regularly rely on commercial comparable sales data from oconnorcomps.com when making decisions and preparing documentation.
A casualty loss may occur as a result of a flood, hurricane, tornado, mudslide or other natural disaster. The intuitive thought pattern is: “My apartment complex worth $5,000,000 suffered major damage totaling $1,500,000 for repairs and rent loss. Fortunately, I was completely covered for both physical damage and rent loss, other than a small deductible. There is clearly no casualty loss I can claim as a tax deduction, right?”
Tax reduction is just one of the benefits of cost segregation. Many real estate owners and tax preparers believe cost segregation simply defers payment of taxes. While they recognize it effectively generates an interest-free loan from the government, they do not understand it also provides tax reductions in most cases.
Tax Rule No.1: Don’t cheat the IRS. But that doesn’t mean you should cheat yourself. Take every legal tax deduction you can.
Parking Research whether the retail space you are considering has adequate parking. Consider both the local Government code and feedback from tenants within the center. Also consider visiting a center four to six times prior to signing a lease. Multiple Visits If you visit the center for the six times at different times in the day and week, it will give you a better feel for the adequacy of parking as well as other potential issues related to the center. It would be overkil
Sale of industrial properties recorded significant downward movement compared to last year. In the entire market 73 industrial properties were sold in the month of March 2012. In terms of number of properties sold, industrial sales have decreased by 16% compared to March 2011. Of all the counties, Dallas recorded the highest sale of 42 industrial properties. In terms of gross square feet there was a decrease of 45.8% when compared to March 2011. Below are some of the notable
In Event of Foreclosure Foreclosure of a mortgage typically extinguishes all claims to the property. In other words, if you've negotiated a lease and started a business, your right to use the retail space is terminated by foreclosure unless there is a separate agreement. Will Lender Cancel? In many cases, the lender has a defined period of time to reject leases or they are assumed to remain intact. Further, lenders often want to retain the leases and tenants to make the pro
Define Budget and Expectations Define the building quality, price per square foot and total monthly budget for office space. The office space broker will advise you if your expectations are on realistic. Visit with the tenant rep broker to make sure the amount of office space you are seeking is consistent with your current and projected number of employees. The density for most American offices is between three and six employees per 1000 ft. of net rentable space. (The diffe
Tenant Rep Brokers Tenant rep brokers are a great option for your retail space search. Their fee is paid by the landlord in most markets. They are retail space experts. Every day, they work on finding and negotiating agreements regarding retail space. Even if you started the retail space search with an online search service, using a retail tenant rep broker will probably generate the most cost-effective retail space for your business. Get an Expert! If you select a tenant
Who Pays When Operating Expenses Increase? Expense escalations are relevant when the landlord is paying a base level of expenses and when the tenant is paying expenses. With a typical gross lease, the landlord pays all expenses and the tenant pays expenses in excess of a base level. (Gross leases are atypical for retail.) The base level is typically the operating expenses for the year the lease is signed. The "expense escalations", would be expenses in excess of this base le
When do You Start Paying for Retail Space Tenants are generally provided time to prepare the retail space for occupancy prior to the date when they must begin paying rent. However, in hot markets and for some very desirable properties or spaces, landlords will be able to require that tenants pay for retail space beginning at the time the lease is executed. In such cases, it is possible the tenant may pay for space for four to 12 months, or even longer, prior to commencing op
Due Diligence The previous sections of leasing retail space addressed selecting the general location, selecting the type of retail space and the sighting how to find your retail space. The next several parts will address issues to consider when evaluating a specific retail space option. Access Issues for each option include traffic counts, traffic patterns, and ingress and egress. As you evaluate location specific issues, contrast the features of the space being evaluated w
Leasing office space is time-consuming, complex and can divert attention from the primary functions of the business. Steps in the process of leasing office space include selecting a tenant rep broker, location, researching options, selecting the best options, negotiating the primary business terms, selecting an atto ey and negotiating the details of the lease. Tenant Rep Brokers Begin your search for office space begin by selecting a tenant rep broker. You may initially won
Fort Worth Area Office leasing and rental data can help office building owners to increase revenue, vendors to increase sales and provide a variety of industry personnel with data and reports to facilitate decision-making and communication. OConnor & Associates provides comprehensive office building data for the Fort Worth metropolitan area. This office building data is used by investors, management companies, brokers, vendors, appraisers and other industry participants. OCon
What Type of Retail Space? A great retail space for your business needs to be the right type of space in the right location. The previous portions of this article addressed location. This section will address options for the type of retail space. Impulse versus Destination Some purchases are made on impulse and other purchases are made after careful planning. Retail for the carefully planned shopping will be termed destination retail. Starbucks is a great example of an imp
Initial Research Leasing retail space seems like it should be easy. You just drive to shopping centers which are near your house and select one which is convenient for you. Then you call the leasing agent and ask them to send the lease. Then sign the lease, mail it to them and you are in business -- right? Of course, this is just about the worst way to approach leasing retail space. Leasing retail space begins by deciding upon the type of retail or service business. That dec
Dallas industrial space leasing and rental data can help industrial space owners to increase revenue, vendors to increase sales and provide a variety of industry personnel with data and reports to facilitate decision-making and communication. Vendors to the Dallas industrial space community can focus their marketing and sales efforts.Industrial center owners can review rental rates for nearby properties to insure their rental rates are competitive. OConnor & Associates provid
OConnorData tracks thousands of Fort Worth commercial properties available on a monthly basis to provide accurate and informative data on the Fort Worth commercial property market. OConnorData tracks properties 10,000 sf and larger and provides free access to search by dozens of fields. Fields of data in OConnorData available with a free subscription include: Countyr Net square feetr Property addressr Building namer Transfer dater Space available And more! With a paid subsc
Online In most cases, the information from the services will adequately address the issue of criminal activity near the office space you're considering. However, the most current and contextual data you'll be able to obtain is from tenants at the property and local police officers. Speak to Tenants Tenants at the property where you're considering leasing office space can be a wonderful resource. They can provide information regarding crime in the area, problems with traffi
Online In most cases, the information from the services will adequately address the issue of criminal activity near the office space you're considering. However, the most current and contextual data you'll be able to obtain is from tenants at the property and local police officers. Speak to Tenants Tenants at the property where you're considering leasing office space can be a wonderful resource. They can provide information regarding crime in the area, problems with traffi
Fort Worth Retail lease information is authoritatively cataloged in RetailLink. Free access is provided for all know Fort Worth retail buildings — 10,000 sf and larger — than any other source. Free access includes comprehensive leasing information, detailed information regarding the building and owner contact data for all tenants. Fields of data in RetailLink available with a free subscription include: Building namer Cityr Transfer dater Space availabler Year builtr Buildin
Fort Worth retail space rental and lease data can help retail space owners to increase revenue, vendors to increase sales and provide a variety of industry personnel with data and reports to facilitate decision-making and communication. Retail center owners can review rental rates for nearby properties to insure their rental rates are competitive. OConnor & Associates provides comprehensive retail space data for the Fort Worth metropolitan area. This Fort Worth retail space d
Houston office space leasing and rental datacan help office building owners to increase revenue, vendors to increase sales and provide a variety of industry personnel with data and reports to facilitate decision-making and communication. Office center owners can review rental rates for nearby properties to insure their rental rates are competitive. Vendors to the Houston office building community can focus their marketing and sales efforts. OConnor & Associates provides compr
OfficeLink tracks thousands of data on San Antonio office properties on a monthly basis to provide accurate and informative data on the San Antonio office properties market. OfficeLink tracks properties 10,000 sf and larger and provides free access to search by dozens of fields. Fields of data in OfficeLink available with a free subscription include: Number of floorsr Space availabler Operating statusr Building namer Class Countyr Property addressr Zip coder City And more!
Market studies provide insight into the current and future level of rental rates, occupancy, absorption, construction and demolition within a defined market or submarket. Market studies are performed to evaluate real estate market conditions with regard to an existing or proposed property. The focus of a market study details competition within the submarket and the strength or weakness of the submarket. Also, market study indicates that the submarket will continue to improve
Will the Landlord Pay? The landlord is usually willing to fund tenant improvement expenditures provided he is confident the tenant has the financial capacity to pay rent for the term of the lease. For large companies with strong balance sheets, landlords will generally spend as much as is requested on tenant improvements. Of course, the cost of the tenant improvements will be reflected in the rental rate. It's Up to You If you're a start-up business with no track record an
Letter of Intent (LOI) Retail space negotiations are complicated and time-consuming. Once you have located the retail space which is ideal for your business, the next step is to negotiate an agreement which protects you and is acceptable to the landlord. Industry practice for retail space is to negotiate a letter of intent before negotiating the lease. Use an Atto ey! Engage an atto ey to assist in the letter of intent negotiation. It probably seems that the letter of intent