Welcome to another episode of Rookie Reply. Today's show is packed with lessons from surprise tax hikes that can eat into your cash flow to short-term rental refund disputes and also some title mix-ups that could cause serious headaches during a sale. We're covering three Rookie Investor scenarios that all highlight one thing –
real estate is a long game and it pays to know what you're getting into before you close that deal. Look, if you've ever second guessed your numbers, your title structure, or how to handle guests demanding refunds, you'll want to stick around. This is the Real Estate Rookie Podcast and I'm Ashley Kerr. And I'm Tony J. Robinson. And with that, let's get into today's first question. So the first question today comes from the BiggerPocketsForums.com.
It says, "I bought an investment home in Goose Creek, South Carolina in April of 2024. After analyzing all the numbers, it looked like I would make about 400 bucks per month in cashflow, which I did for about a year until April, 2025. Then my home was reevaluated by the county and assessed at 226,000, which previously guys, it was at 13,600. My taxes jumped from $900 a year to 3,495 per year.
That's a crazy increase.
My new mortgage payment increased by $300 per month, leaving me with only $100 per month in cashflow. And that's before CapEx or vacancies. I can't increase the rent since the tenant just signed a lease through next July. Should I sell now or what's the best way to calculate if I'll take a loss? First, I got to say that's a massive jump. Yeah, $13,000 to $226,000. Like, oh my goodness.
I think first, Ash, let's just talk about what triggers this. And you just did a phenomenal job in our last episode, so I'll let you run with it. But what could trigger the assessed value changing from one year to the next? Yeah, and this really depends on your county and how they handle assessments. But most...
Do a reassessment every X amount of years or it's on an as needed basis when they're restructuring what the budget is going to be and what they need for taxes and doing a reassessment and they decide they need to do one to, um,
But basically, in some areas, I do know where I invest also is when you purchase a property, they can't automatically go and reassess you just because you closed on the property. But most likely, a reassessment is going to come within the next five years, at least, I would say.
So when you're analyzing this deal, look at the property taxes and see what the assessment is. So in this question, we don't know what...
they actually bought the property for, like what the purchase price was. But if you look and see the assessed value is $13,600 and you're purchasing this property for $250,000, that right there is going to be a red flag for you that, wow, when the county does do a reassessment, they are going to look at the sale history of this home. And most likely it's not going to assess for the
exactly what you purchased it for. On the taxes, you'll see on the tax record, you'll see market value and you'll see assessed value, not appraised value, assessed value. So the assessed value is usually lower than the market value. I have seen in most circumstances, the market value is less
than what the property would actually sell for. And then the assessed value is less than that, but that's not always the case, just typical. So a little side note on assessments, if you're looking at your property tax record and someone says, well, I'm only going to pay, you know,
$50,000 because the property is only worth $50,000 because it's assessed for $50,000. The assessed value is not the appraised value. And I've seen that as a common misconception. Appraised value is when an appraiser comes in and determines the value of a home. When your property taxes are assessed,
There is not an appraiser coming into your home to actually determine the value of the property compared to other properties in the area and what it could actually sell for. So just a big difference in appraise and assess value. That's a great breakdown, Ashley. And I think from a person who's buying, like on the buyer side, especially for rookies, there's a couple things you want to consider here.
And Zillow actually does a really good job of laying out the property taxes. Like if you open up most Zillow listings, it has...
the property tax information on a year by year basis. And I spot checked it multiple times against like county records and it's usually pretty spot on, but obviously going straight to the county assessors where you can get the most accurate data. But even if you just pull up Zillow and if you're looking at buying a property, look at what the property taxes have been in the last several years.
And if you see that that number has been relatively flat for the last several years, then maybe you can assume that there's going to be some increase when you buy that property. So if last year property taxes were $1,000, maybe you should assume a 25% increase, a 50% increase. Now, $13,000 to a quarter million, that's a massive increase in assessed value, right? Which brings me to my second point.
You as the property owner, and I believe this in most counties, I guess you guys can check me on this, but as the property owner, you do have the ability to appeal or to contest property.
the assessed value of your property. Because to Ashley's point, there's no appraiser coming through and doing a full appraisal on this property. Like there's some process they have internally to come up with these values. And if you feel that your assessed value is not in line with the current market conditions, you can actually challenge that. And we actually, we did this once and we're in the process of doing it again right now. I can't speak to it super clearly,
closely because my partner was one that kind of led this, but we did successfully challenge one of our property tax records because we felt what they came back with was just like super unreasonable. And if you can show proof of like actual values of what's being sold, other property tax taxes for similar properties in your area, that's kind of evidence you can take them to contest. So I think before this person goes off and like sells the property, I
I would first try and see like, Hey, what can I do to get this maybe number back in line with something that's more reasonable? There's also some companies that will actually fight them for you where they take like, um,
I think you pay them like a percentage of whatever your decrease in property taxes are, but they'll actually go and handle the whole dispute for you. So you don't even have to do that. And also look too, because on the property tax bill, it will tell you a date that you have to appeal and you have to make your appeal before that date too, um,
And you can't go back. So they take into account all these things. And it's going to be very, very specific county to county. Like, for example, Tony mentioned he can go to the county records and pretty much find all the information there or it's on Zillow. Well, in most cases, markets by mean, there will be the town and county tax. There will be the school tax.
And then there also may be a village tax. Like Tony, you don't have village taxes near you, right? We do not. Yeah. Yeah. So on the town and county website, they're not going to have the village taxes in most cases. So you may have to like make sure you understand all of the actual taxes that can be billed to that property to really get a full understanding and understanding
what the assessed value is on each of those taxes too. Let's say that you do end up losing the appeal and you're stuck now with this massive increase in your property taxes. What are your options?
I do think obviously an option is selling, right? You could say, hey, I've still got equity built up in this home and I could sell and I could 1031 those funds into something else where maybe the risk of property tax is increasing aren't as high. That is definitely one option.
But I think in order to somewhat confidently make that decision, you've got to go back to what your motivation was in buying this deal. If it was just to maximize your cash flow, like the actual raw dollar amount you're getting every single month, then potentially, yeah, selling does make a ton of sense. But if appreciation is at all important to you, if ease of managing, maybe this is a really easy asset to manage,
If tax benefits, maybe you did a cost segregation study and bonus appreciation is now back at 100%, maybe there were some other motivations for you on keeping this deal that outweigh the decrease in cash flow that you're getting. So I think to confidently make a choice, you've got to first figure out or go back to, hey, what was the main goal and priority when I bought this? We're going to take a short ad break, but when we come back, we'll go on to our next question.
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Okay, the next question is actually from an Airbnb host in the BiggerPockets community. So thank goodness we have Tony here as our short-term rental expert. So this question says, we had five families stay at our newly built short-term rental. They reported a mouse sighting on day two, but still used the hot tub and stayed the full weekend.
After checking out, they requested a full refund of $1,370. Airbnb investigated and recommended a 30% refund, which we agreed to. But then they left a one-star review. We appealed and it was removed. What's fair when it comes to refund requests like this? And how do you protect yourself from guests who use bad reviews as leverage? Tony, I
I'm so sorry, but I set you up with false hope because...
This actually happened in one of my one of two AirVFBs where there was a mouse sighting. So I guess like in the Smoky Mountains, maybe. Has that happened in any of your cabins? In the Smoky Mountains, it definitely has. Yeah. So I guess I'm curious, actually, in your situation, what did you do with the mouse sighting? Well, I was actually really worried about this because when we bought the cabin and it was very dilapidated, we did a ton of work and
Even when we were remodeling it, we would take the kids sometimes and go and stay in it. But like...
There was mouse turds. You could hear scatters in the walls. And this is not a very well insulated cabin. It's an A-frame. We renovated it, but it is still not completely tightly sealed up. And so we did try and find every possible hole and get it enclosed. But we knew there would be problems. So we actually put into our listing...
A little disclaimer that says, please be aware that this is a cabin in the woods where you may see critters, rodents, and other creatures in or around the cabin because of being in nature or something. I don't know. It sounds way more pleasant than just like you might have mice, snakes, or
raccoons or whatever we have that in there so when we did have a guest message about the mouse in there we let them know like we can send someone over this it was like in the middle of the night we can send someone over tomorrow and set some traps if you'd like and blah blah blah and but um
They had actually called Airbnb too. And we like told Airbnb, like it is in our listing. And so they ended up deciding to leave and we just left.
To keep the peace, we charged them for the one night they were there, refunded them for the rest of the time they were staying, opened up our booking. Now what we do, though, is what my manager does is if somebody has requested to leave and it's something that they're not wanting to leave because of something that's wrong, it's something we fully understand.
like said in our listing that this is what it's like, like the driveway is super steep or something like that. I can't think of a specific example, but we just had someone that asked to leave because of something that was clearly stated in our guidebook. This is how the property is or in our listing. And what she does is she says, we will offer, if you would like to leave, we will open up those nights. And if we get a booking, we will refund you the difference.
So like if someone ends up booking those days, which in, I mean, we've only had this happen maybe once or twice where this has happened, but like the chances of someone actually booking last minute for like those two or three days is very, very slim. But at least it's like, feels like it's giving these people an option and like the opportunity to recoup their money and whatever.
So that's how we're kind of handling any, not just specifically a mouse sighting, but if anything were to come up like that, that's how we would handle it, I guess, per se. But I'm curious to hear in your experience,
instances, what has happened? Honestly, it's pretty similar. And I think the first step of communicating that in your listing is exactly what we do as well. You want to make sure, I think you get in the hot water in the short-term mental space when expectations don't match reality. People aren't mad that a mouse is in the cabin. They're mad that they thought a mouse wasn't going to be in the cabin and there is one.
But if you told them, hey, there's a little mouse named Mickey that lives in the property and you might see him every night as you're hanging out.
Then they'll be like, oh, there's Mickey. And now it's a fun thing in the cabin, right? But it's when they weren't expecting that. I'm laughing because I bet there are literally people like, oh my God, no, I would not be like, there's Mickey. I would be jumping up on the tables, making sure it didn't touch my feet. Same, same. I would not book a place with a pet mouse named Mickey, but there are people out there who want that experience, right? So I think the biggest thing is just making sure that
their reality matches their expectations. So as long as you communicate what those things are, I think that's when you're fine. So yeah, for us, we have cabins that are very much in wooded areas in the Smoky Mountains as well. We've had issues with mice. We've had issues with flying squirrels. We've had different kinds of rodents and pest issues at our properties just because of the nature of where they are.
The Smoky Mountains brings one piece. We have properties in the desert that bring a different type of element and rodents you have to deal with. So yeah, communicating that. Now, what would I do if someone actually complained? The first thing is that if someone's threatening you with a bad review, unless you give them a refund, like, hey, say I'm standing at your cabin, Ashley, and like, Ashley, I'm gonna leave you a one-star review if you don't give me this refund. That is very clearly against Airbnb's terms of service. And if they leave that review,
In most cases, you should be able to successfully fight that. Now, I will say Airbnb has made some pretty radical changes to their appeal process for reviews. And since they've made this change, we've had zero success.
and getting even what we feel are the most unfair reviews removed. They've really kind of dropped the hammer and tightened up their approval process. But this one is a little bit more straightforward where it is a very clear violation of their terms of service when it comes to what guests can and can't say inside their reviews, right? Now you have to have proof, right, that they were trying to extort you basically, but if you have that, you can take it to them. So if it was something that I communicated clearly,
and it happened during their say and they stayed they didn't complain about it they left and they asked for a refund we also would not be given that refund and we would just deal with the consequence of whatever review uh came back now i will say we've got a little bit more flexibility there because a lot of our listings are in the you know hundreds of reviews at this point so one one star review won't have that big of an impact
If you've got a listing with seven reviews, that one star could hurt a little bit more. So I think you've got to also be honest with yourself about where you're at. And maybe if you're on the lighter side of reviews, maybe you are a little bit more flexible, right? Because that'll still set you up to earn money long term. But if you've got a really mature listing, lots of five-star reviews, you can probably roll with a bunch of maybe one or two bad reviews here and there. Yeah, I think the biggest thing is trying to be proactive as to like,
here's the things that could happen. Put them in the listing as here's potential things about this property that could happen so that you're upfront about it. So there's already that kind of expectation. And then if none of those things happen, like, woohoo, this is great, even better. Like we have one property where sometimes the water, it's well water and the water will have like a sulfur smell to it. And it's just like very common in the area. And like,
we have to, you know, we have this water system in there and if it's not working or whatever, blah, blah, you'll get the sulfur smell. And so like, we put that in there, like, cause the sulfur smell smells like rotten eggs. We did have one guest recently who said it was a sewer smell. And like, we had to like say like, just so you know, it's sulfur, it's not sewer. Like we want to make that very clear, blah, blah, blah, and stop. And it ended up being fine. But, um,
I think being proactive, and I'm definitely more on the side of I would rather somebody just leave the property and offer that to them. If you would like to leave, we will refund you the extra nights or whatever. Or if somebody else books, we will do it. But I would rather not deal with more headaches. But I think in this question, it is such a rare opportunity.
Situation because they didn't say anything and they stayed the rest of the time like everything was fine. So I think that definitely would eat at me more that they didn't bring it up right away and that.
They stayed the whole time. I just want to give an example from our own portfolio about setting the right expectation. One of the first properties that we bought in Joshua Tree, it is very remote. It's like at the very northwest end of the city and sits by itself. And it's on a on a like a bumpy dirt road, like the last like 10 minutes probably to get there. And when we first launched listing, we were getting people complaining about this bumpy dirt road.
So we have it in the listing now, and I'm going to read this verbatim. It says,
In parentheses, it says sometimes bumpy. Right. So we put it there first, like in the very first sentence. And then we've got it in big capital letters. It says, please note the last 15 minutes of the drive to this property are on a dirt road and can and can get a little bumpy. Please use caution. There's heavy rain. And we have it listed, I think, at least two more times here about it. It's going to get bumpy on the way out there.
And the reason we do that, the reason we over communicate, the reason why, you know, someone maybe shouldn't book is so that people can't complain about it later, you know? So the more you can do to communicate the reasons why people shouldn't book the better job you can, or the easier it becomes, I should say, to, to still get that good review on the backend. Yeah. That's a great point. And,
We do that with a driveway that's really steep and say, like, if it has rained a lot, that driveway will get really muddy and you might not make it up. Like we recommend a four wheel drive vehicles. And there's probably a bunch of people that have read that, that haven't booked because they're, they just have like a little car and they're like, well, we wouldn't make it up.
But there's also people that will message us and they'll say, I have this all-wheel drive Subaru and you think that, you know, my car would be fine or whatever. And, you know, we can kind of help them navigate that. So it's not completely eliminating people, but it's bringing people in to actually ask questions too and still book the property. Yeah.
It definitely has worked well being straightforward. If they book with their little Honda Civic and it gets stuck, like they can't be mad at anybody but themselves, you know, because they saw that. We did actually have someone not too long ago that like parked at the end of the driveway and they literally messaged us and said, just so you know, we didn't make it up the driveway. Yes, we were fully aware that we might not like we're completely fine with it. We just wanted you to know our car is parked at the end of the driveway. Yeah.
And we love the place. And we love it, right? Yeah. So setting the right expectations. So yeah, sometimes you can't avoid a bad review. I think it's just part of being a host today. But hey, you do what you can. You control what you can't control. Before we get into our final question, let's take a second so you guys can hit that subscribe button for the Real Estate Rookie Podcast on your favorite podcast platform. You don't want to miss out weekly real world investing lessons like these. We'll be right back with more after this.
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Okay, for our last question today, we are back in the BiggerPockets forums. And this question is, I bought a property in Wisconsin with my mom. We're both listed on title as tenants in common and bought 50-50 in cash. But shortly after, I took out a HELOC and paid her back with interest. She has no stake in the property anymore, but she's still on title.
I've made all the payments since. She doesn't feel entitled to the equity, but how do we handle this at the time of sale? Really good question. So I think the first step is maybe putting something in writing. Like if your mom is going to stay on title, put something in writing that upon sale of the property. But also too, like I think it's better to be proactive and to get your mom off title first.
now on the property? Like what if there was a lawsuit and something happened and the tenant sued you and your mom and your mom has nothing to do with the property more, has no equity ownership into the property, but yet now she's being sued because she's still untitled. So I think for your mom's sake, removing her off title is
I've done this before moving someone off title where we would just do a quick claim deed because I'm still the owner. I already had all the title work done. I already had the survey done. I didn't change anything to the boundary lines.
take out any more liens on the property or nothing has changed in my ownership of the property where I would need to go through and do a whole new title search on the property. So what you can do is just a quit claim deed. And basically you're signing,
And they're signing that they're no longer on the deed and it's just you on the deed. And really, you can do these kind of deeds. Like even if me and Tony could do a quick claim deed. If I was selling Tony a property, I could just...
Deed it to him really quickly. But like, then he takes on a lot of liability that like there was no title search done. Someone else could come and claim the property, things like that. So this I think is best to have an attorney. I had an attorney do mine for me. Um,
But I know in states that don't use attorneys for closing or things, but Tony, like you don't California, would you in this circumstance still recommend an attorney to help you with this? Or could you go like right to the title company? The first time we did it, we, we did hire an attorney to help us with the documentation. But once I saw like the formula of how to put the quick claim deed paperwork together, then we've done a few and I've just done them myself. And honestly, at least for my County, like if you go in person, you,
They can be pretty helpful in terms of like how to fill out some of the paperwork to make sure you're doing it the right way. So like for me, there's two documents that we have that we have to fill out. There's the actual quick claim deed that you have to get notarized by all the parties and like quick note here.
One of the first times I did this, I did this the wrong way, but it's the person asking the question and his mom. We did a deal where we were removing ourselves from title, and we just had ourselves sign it, and then the remaining partner, since they were keeping it, we just had them as the person who was going to remain on title. Everyone who owns a property has to get it notarized, even if the person who's saying on the deed, like,
Like nothing's changing with their ownership. So, you know, just make sure everyone signs that initial quick claim deed. Which makes sense. Like, say me, you and Sarah are partners and you guys go and all of a sudden deed the property to me after we just put a ton of debt on it. But you got your amount of money and now I'm the only one. It makes total sense in retrospect, you know. But to me, when I was filling it out, I was like, oh, yeah, I mean, it's their property. Like who would care? But like, no, everyone needs everyone needs to sign it.
So that's one piece to make sure that you get it done up the right way. And then there's also like some transfer tax type information you have to fill out as well. And again, the folks at the counter are pretty helpful for me with that. So attorney the first time, DIY the every time they're afterwards. Well, thank you guys so much for listening to this episode of Real Estate's Rookie Reply. I'm Ashley and he's Tony. If you guys want to head over to the BiggerPockets forums, see
Submit your questions there. You'll probably get a ton of answers from other investors that are like-minded like you to help you in your situation. But we also may pull your question for an episode on Rookie Reply. Thanks so much for watching. We'll see you guys next time.