Property tax abatement is usually seen as a positive law by investors and homeowners, alike. But the concerns over the increased annual expenses once the tax abatement is expired have made many think that it is not wise to invest in, or own a tax-abated property.
In general, whether your tax-abated property will turn out to be a good holding or not depends on the market state at the end of the tax abatement period. Fortunately for investors & property owners in Philadelphia, it will turn out to be a good one.
According to Jeff Block of Fox & Roach Realtors, Philadelphia’s tax abatement law results into "increased revenue to the city that is greater than the amount of revenue decrease from the abated taxes." Also, many experts attribute property tax abatement as the trigger behind the on-going real estate development in the city of Brotherly Love.
Recently, Noah Ostroff of Keller Williams Philly Realty said that, “Each $1,000 in property taxes per year is equivalent to about $18,000 of buying power for a buyer on a 30-year mortgage”. This in effect attracts more investors in the city and allows more people to afford high-priced homes. And in the process, new constructions continue to happen; making city’s housing market sounder for investors & homeowners.
According to a research conducted by Kevin Gillen of Drexel University, “(In Philadelphia,) the sales rate of units with expired abatements was slightly higher than the sales rate of housing citywide.” This proves that in a growing real estate market like Philadelphia, expiration of tax abatement should be seen as less of a concern, as the property prices continue to increase significantly with time.
For investors looking to create a good real estate investment portfolio through Philadelphia real estate market, NRIA (National Realty Investment Advisors) offers abundance of real estate investment opportunities throughout the city.
NRIA deals in 100% newly constructed rental properties, so tax abatement is assured with each NRIA property. Apart from that, you also get financing options, a 5-year rent guarantee, and property management services at just a small cash investment.
Find more about our investment properties & services by visiting nria.net.
Related news at philly.com