Tony J. Robinson (4:44)

That, that's a, that's a great breakdown, Ashley. And I, I, I think from a person who's buying like, like on the buyer side, especially for rookies, there's a couple things you want to consider and Zillow actually does a really good job of laying out the property taxes like, 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 is 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 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 I, we're in the process of doing it again right now. And I can't speak to it super closely because my partner was one that kind of let this. But we, 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 the kind of evidence you can take them to contest. So I think before this person goes off and like, sells the property, I would first try and see, like, hey, what can I do to. To get this maybe number back in line with something that's more reasonable.

Ashley Kerr (6:57)

And there's also some companies that will actually fight them for you, where they take like, 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. And you can't go back. So take, you know, into account all these things and it's going to be very, very specific, county to county. Like, for example, Tony mentioned, like, 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 me, 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?

Tony J. Robinson (7:58)

We do not. Yeah.

Ashley Kerr (7:59)

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 the what the assessed value is on each of those taxes too.

Tony J. Robinson (8:20)

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, 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, you know, maybe this is a really easy asset to manage. If tax benefits, maybe you did a cost segregation study and, you know, bonus appreciation is now back at 100%. Like 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?

Ashley Kerr (9:37)

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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You're listening to this podcast.

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Ashley Kerr (11:53)

Okay, the next question is actually from an Airbnb host in the Bigger Pockets 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 use 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'm so sorry but I set you up with false hope because this actually happened in one of my one of two Airbnbs where there is a mouse sighting. So I Guess, like in the Smoky Mountains maybe, has that happened in any.

Tony J. Robinson (12:58)

Of your cabins in the Smoky Mountains? It definitely has. Yeah. So I guess I'm curious actually, in your situation, what. What did you do with. With the mouse sighting?

Ashley Kerr (13:07)

Um, well, we. 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 when we. Even when we were remodeling it, we would take the kids sometimes and go and stay in it. But, like, there was mouse turds, there was. You could hear scatters in the walls. And like, this is not a very well insulated cabin. Like, it's a frame and like, there's. We renovated it, but it is still not completely tightly sealed up. And so we did try and find, like, every possible hole and, you know, get it. 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. And in or around the cabin, because of being in nature or something, I don't know, it's sounds way more pleasant than just like, you might have mice, snakes, 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. You can send someone over tomorrow and set some traps if you'd like, and blah, blah, blah. And. But 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 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. They're not wanting to leave because of something that's wrong. It's something we fully, 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 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 instances what it's happened.

Tony J. Robinson (16:21)

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 into hot water in the short term rental 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, you might see him every night, you know, as you're, 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.

Ashley Kerr (16:54)

I, 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.

Tony J. Robinson (17:07)

Same, same. I would not book a place with a, with a pet mouse named Mickey. But there are people out there who want that experience, right? So I think the biggest thing is, 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, 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, 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, you know, say I'm saying that you're cabinet. Like actually I'm going to 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, some pretty radical changes to their appeal process for reviews. And since they've made this change, we've had zero success in getting even what we feel at the most unfair reviews removed. Like, they've really kind of dropped the hammer and tightened up their, 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 proofs, right, that they, they were trying to extort you basically. But if you have that, you can take it to them. So if, 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, for a refund. We also would not be given that refund and we would just deal with the consequence of whatever review 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 gotta, gotta 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, 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.

Ashley Kerr (19:37)

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, 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, because 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 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 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.

Tony J. Robinson (21:15)

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 the 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, if peace and tranquility are what you're looking for, you can stop your search at the Desert Daisy house. Designed to give you the perfect escape to distress and unwind. It is located well off the beaten path. 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.

Unknown (22:19)

And the reason we do that, the.

Tony J. Robinson (22:20)

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 still get that good review on the back end.

Ashley Kerr (22:35)

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 vehicle to. And there's probably a bunch of people that have read that that haven't booked because 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 into actually s questions too and still book the property. So it definitely has worked well. Being straightforward.

Tony J. Robinson (23:20)

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, they saw that.

Ashley Kerr (23:26)

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 and we love the place and we it.

Tony J. Robinson (23:46)

Right. Yeah. So setting the right expectations. So yeah, sometimes you can't avoid about review. I think it's just part of being, being a host today. But hey, you do what you can. You control what you can control.

Ashley Kerr (23:55)

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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Ashley Kerr (26:57)

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 5050 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, 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, it's better to be proactive and to get your mom off title now on the property. Like, what if there was a, a lawsuit and something happened and the tenant sued you and your mom and your mom has nothing to do with the property anymore, has no equity ownership into the pack the the property. But yet now she's being sued because she's still on title. So I think for your mom's sake, removing her off title. 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, 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, 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. But I know in states that don't use attorneys for closing or things, but Tony, like you don't in 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?

Tony J. Robinson (29:34)

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 quitclaim deed paperwork together, then we've done a Few and I've just done them my. And honestly, at least for my county, like if you go in person, 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 quitclaim deed that you have to get notarized by all the parties. And like quick note here. The one of the first, one of the first times I did this, I did this wrong way but like it's, it's the, 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 like going to remain on title. Everyone who owns a property has to get it notarized even if the person who's staying on the deed like, like nothing's changing with their ownership. So you know, just make sure everyone signs that initial quit claim deed which.

Ashley Kerr (30:39)

Which makes sense like say me, you and Sarah, partners and you guys go and all of a sudden indeed 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.

Tony J. Robinson (30:51)

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, who would carry out. But they're like no, everyone needs, everyone needs to sign it. So, 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 county are pretty helpful for me with that. So attorney the first time, DIY the every time there afterwards.

Ashley Kerr (31:15)

Well, thank you guys so much for listening to this episode of Real Estate Turkey. Reply. I'm Ashley and he's Tony. If you guys want to head over to the BiggerPockets forums, 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.