The 3 myths of property tax consulting eroding your NOI.
With so many properties to cherry pick from, even the worst property tax consultants can justify their existence by pointing to higher-valued “comps.” Apples-to-apples comparisons are tough – you can’t hire two consultants on the same property the same year. Owners are forced to buy into a strategy, a plan of attack that will provide the best outcome. But substandard consultants, incapable of obtaining worthwhile results, are resigned to selling strategies that sound plausible even though they’re worthless – and they’ve gotten very good at it.
The result is an industry flooded with myths and superstition on how to get the best deal. These are the three most-prevalent, and most ineffective, property tax consulting myths:
1. My guy is best friends with everyone at the Appraisal District
Relationships demand Compromise. Middle Ground. Give-and-Take. Call it what you will, friendships never persist when one side always gets what they want. If the value your property tax consultant provides is dependent upon positive relationships, how can you be sure that of all the properties he represents in that county, your properties are the ones where he’s taking and not giving?
2. My girl works for the 800 lb. gorilla that handles half the properties in the county
The tax consultant with the biggest book of business may strut around like they set the rules, but in reality, they just set the market. How, then, could your properties ever outperform their competition when they are likely being settled alongside them? On the surface this concept may sound like a path to a great deal, but it’s really just a roadmap to mediocrity.
3. My guy has the best data and gets the best outcome
To say the best data wins the day is to say that you can convince the opposition to admit you are right and they are wrong, or that you do their job better than them. It is not realistic to assume the appraisal district will agree with your opinion of value merely because it is logical, especially if they know the decision-maker is virtually certain to agree with them and not you! Big Data, Proprietary Data, Better Data. How can better data matter when the other side won’t listen?
If you’re depending on one of these strategies, you have likely become convinced it is the best option because it is the method you are using. Most tax consultants are great salespeople that depend on managing other people’s expectations. Owners become persuaded by the idea that because their consultant is saving them money, they must be doing something right. But you must ask yourself, “Are they really doing a great job, or am I simply believing their myth?”