Not many are aware of the gigantic opportunity that is available in the property tax consulting market. From residential to private business and industrial property tax appeals can generate sizeable contingency commissions. The residential sector, a home or dwelling, is valued by a market value approach. With the industrial sector, an Income approach is used.
Consider that the assessment for property taxes is done by a community usually every 7 to 15 years and when done, it is processed off a public bid where the low-cost bidder gets the job. Many mistakes happen since little time is spent on the appraisal. Experts tell us that 40 to 60% of these appraisals are inaccurate.
Consider the average cost of a real estate appraisal is $300 to $425 for a single-family home or condo. Most home sellers pay about $350 for the appraisal. Appraisers in large cities with high labor costs charge closer to $500 to $800 for a home appraisal. The town would go broke if it spent that amount per home appraisal. Maybe, only $25 was spent per home with that low-cost bidder needing to make a profit. Often previous assessments are simply rolled over.
Consider that the United States has over 87 million homeowners and this number represents 65.5 percent of the American housing market. The total valued of residential real estate is over 33.6 trillion dollars as of the end of 2019.
Most do not look into their property tax assessments. They usually don’t have time, knowledge to pursue that task. This is a huge untapped market for someone who can title themselves as a property tax consultant! No licensing is required except for the state of Texas.
The competition is virtually nil in the residential sector but for the business sector, where the big contingency commissions lie, there is competition. The larger the business, the more competition. Smaller business, very little competition.
Using the income method for a commercial property tax appeal, the consulting fee and contingency commission turns into a sizeable amount. If you have a high value commercial property you can probably get a property tax appeal done on a contingent basis (percentage of the tax savings). Some consultants charge an upfront fee of $250 and 25% of tax savings and many consultants will do tax appeal work on high-value properties for strictly 25%-33% of the tax savings.
If a business, like a previously assessed large gym that was assessed at $100,000/year and with the Covid shutdown made only $20,000 (business dried up in a lot of gyms in my area, some areas they were forced to shut down), with a 25% commission on the $80,000 assessment cost reduction, that’s a $20,000 contingency fee. Check it out here: https://marketvalue.PropertyTaxConsultingCourse.com
