I received a letter from Township about the rental office condo I owned. I think they are the planning on reassessing the property. Letter is asking for all the income and expenses related to the property. Once I fill it, cap rate comes to around 9.6% using the price I paid for it in Nov, 05. I was thinking of doing the following, please let me know if it makes sense or raise the red flag.
- Putting $1000/year extra expense to cover the accounting and management as I manage it myself. I really do not pay myself for it.
- I have only 15 months left on the lease and there are no extensions.
- I bought it in Nov 2005, since then rent is same but the maintenance expenses has gone up by $1560/year and property tax has gone up by $152.4/year. As lease is gross, I have to take care of it.
- HVAC and Water heater are very old and could go anytime.
I was thinking of sending the letter along with the form I got, to emphasis the point 2, 3 and 4.
I will appreciate any ideas or comments.