Outsourcing Property Tax Management? 5 Questions You Must Ask

Posted by Anne Sheehan on Nov 12, 2015

Find out how to get the best commercial property tax management partner for your business.If you want to put your business in the best position to mitigate property tax risk, execute appeals successfully and reduce your overall cost of occupancy, outsourcing your commercial property tax management is a sound decision.

Experienced property tax experts help you understand your real property’s true value and manage every aspect of tax strategy, compliance and analysis across your entire portfolio, giving you back time – and peace of mind.

But, not all property tax management specialists are created equal. To ensure that your business is in good hands, be sure to seek out referrals, recommendations and case studies demonstrating successful account management for client portfolios. Then, ask your prospective service provider these five essential questions before you sign on the dotted line.

1) Who Is Managing My Account?

First, find out who’s managing your account. Most important, determine if you’ll have one point of contact for your entire portfolio.

Commercial real estate portfolios that span state lines and touch multiple tax jurisdictions involve many complex, moving parts. That’s why it’s critical to have one designated individual who can simplify your efforts.

If your account is sourced out piecemeal to different professionals in different geographical areas, communication is more likely to break down and mistakes are more likely to be made. Search for a partner that offers a single point of contact for account management, so you have one person to turn to with any questions or concerns.

2) Who Is Benchmarking My Property?

Similarly, it’s important to know the person who is benchmarking your properties and determining their values.

Your main point of contact at your partner’s firm may be an experienced professional with years under his or her belt. But, is that professional handing off key tasks – such as valuing your portfolio – to younger, less experienced employees?

Your real property’s actual value is critical to determining when you should appeal an assessment increase (and subsequent tax increase), so ensure that valuation is being managed by a qualified expert throughout your engagement.

Also, find out who will be appearing at your hearings: Is it a junior staff member or the person who knows your properties best? Will the same individual be managing your process? This person should have enough experience to know when you need an attorney and when you need an appraiser.

3) How Do You Manage Complex Portfolios?

If your commercial real estate portfolio is particularly large, you must work with a partner that’s capable of securing results in any part of the country.

Tax jurisdiction processes may vary, but your prospective partner’s internal processes shouldn’t. As a client, you should receive the same level of quality control for every property in your portfolio, regardless of location.

Find out how your prospective partner manages property tax in every jurisdiction that your portfolio touches. Even if you have a single point of contact to manage the complexities of your account, you should benefit from the combined expertise of real estate tax professionals who are knowledgeable in various jurisdictions.

4) How Transparent Are Your Processes?

When your bottom line is on the line, transparency matters. Find out if your partner has quality processes – and tools – to ensure that you’re in the loop at all times. That way, if you need to check on the status of an assessment appeal or bill payment, you’re able to do so with peace of mind.

Routine updates and reports are certainly important. But, property tax service providers that are ahead of the curve should also offer technology that keeps you in the know. Ask about a client dashboard. This is an incredibly useful feature, letting you log in and check on the status of every task easily, from any location.

5) Can You Show Consistent Client ROI?

Finally, remember that in any industry, numbers don’t lie. An outsourced property tax management firm courting your business should be able to point to tangible client wins with a clear return on investment. Of course, no provider can reasonably guarantee your particular return ahead of time, but they should still be able to show you proof of historical ROI.

Be critical of the numbers. While 10-15% sounds like a good reduction, you need to ask if that is the right reduction. Is it simply the quick way to resolve an appeal, or does it actually meet the test of assessing at fair market value?

And, what if the data and analysis support a 40% reduction? With a number that large, it may take litigation to get there. Is the firm willing to go after these additional savings for you, even if it delays the final resolution and their invoice for up to two years? Are they going to provide you with a cost/benefit analysis so that you know what your net savings will be if you proceed to court? Conversely, will they tell you when it's time to stop the effort in order to prevent a negative effect, even if that means giving up a potential fee?

You should feel comfortable with the provider’s answers to these questions before you make a decision to move forward.

Only Work With The Best

The best way to manage your commercial property portfolio’s risk and guarantee long-term success is to have a qualified tax expert on your side.

Before you choose a service provider, ask these important questions to ensure that you only work with the most knowledgeable, skilled advocate possible.

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