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5 Mistakes Commercial Property Owners Make During the Appeal Process
For commercial property investors, property taxes often represent one of the largest annual expenses. Yet, many owners unknowingly overpay because they miss opportunities to challenge unfair or inaccurate valuations. Filing a successful appeal can significantly reduce costs, but certain common mistakes can undermine the process and cost property owners thousands of dollars.
Here are the Top 5 Mistakes we see—and how to avoid them:
1. Waiting Too Long to Act
The Texas property tax calendar is unrelenting, and deadlines can sneak up quickly. For most commercial property owners, the appeal deadline in May is your only opportunity to challenge an unfair assessment.
- What Happens When You Wait? Missed deadlines mean no recourse—owners are stuck paying inflated tax bills for the year. Acting early gives you more time to compile accurate data, research market conditions, and build a strong appeal case.
- A Real-World Scenario: An office building owner in Dallas waited until the last minute to challenge a steep 15% increase in their assessment. With no time to gather updated income data or negotiate, the appeal was rushed and the notice value was upheld—resulting in $60,000 in overpaid taxes.
Takeaway: Don’t wait until you receive your tax notice—start reviewing your financials now to maximize your chances of success when value notices are released.
2. Relying on Outdated Property Data
Your property’s income and market value can change significantly from year to year. Yet many property owners rely on outdated or incomplete financial data when filing an appeal.
- What Appraisal Districts Want: Accurate, current information that reflects the property’s true operating performance, including: Up-to-date income and expense statements. Vacancy rates and leasing concessions. Deferred maintenance costs or capital improvement impacts.
- Why It Matters: Appraisal districts often use blanket assumptions about rent growth, expenses, and cap rates. Without updated data, their conclusions can severely overvalue your property.
Takeaway: Current, detailed financials are your best defense. At FirstPointe Advisors, when your data is provided timely, we ensure your data tells the right story.
3. Not Understanding Local Market Conditions
Every commercial real estate market is unique, and Texas is no exception. Valuations in Austin are driven by explosive demand for multi-family and industrial properties, while cities like Houston face challenges with office vacancy rates.
- Mistake to Avoid: Many owners assume a rising tide lifts all boats, but market trends are hyper-local and asset-specific. For example: Is your property in a secondary location suffering from lower rents? Are there competing assets under construction that impact your lease-up assumptions?
- Why It Matters: If the appraisal district uses comps that don’t reflect your specific market conditions, your property could be overvalued.
Takeaway: Local expertise, that FirstPointe Advisors provides, is critical to identifying inaccuracies in comps or misapplied market trends.
4. Underestimating the Appeal Process Complexity
Property tax appeals are far from simple. The process involves tight timelines, legal requirements, and technical evidence that can overwhelm even seasoned property owners.
- What Makes the Process Complex? Knowing how to challenge appraisal district methodologies (like mass appraisals). Presenting a compelling case that includes income analysis, vacancy data, property-specific factors, and market comparables. Negotiating effectively with appraisers and presenting appeals before the Appraisal Review Board (ARB) if needed.
- The Risk: Without understanding the system, even valid appeals can fall short, leaving money on the table.
Takeaway: Expert representation removes guesswork and improves your chances of success.
5. Attempting to DIY (Do-It-Yourself)
Many owners try to tackle property tax appeals on their own, believing it’s a straightforward process. However, without deep knowledge of local appraisal practices and real estate valuation, DIY efforts often result in missed opportunities.
- What DIY Owners Overlook: Hidden Savings: Subtle valuation errors (like flawed comps or ignored vacancies) that experts know how to uncover. Negotiation Leverage: Knowing when and how to challenge the appraiser’s assumptions. Time Costs: Managing the appeal process while running a business can be overwhelming.
- The Outcome: Many DIY owners accept modest reductions or fail to appeal at all, overpaying by tens of thousands of dollars annually.
Takeaway: Partnering with a professional ensures you get the most out of your appeal—without adding stress to your schedule.
How FirstPointe Advisors Can Help
Avoiding these mistakes comes down to expertise, strategy, and action. At FirstPointe Advisors, we manage the appeal process from start to finish, delivering:
- A Comprehensive Analysis: We review your property’s financials, market trends, and condition to identify opportunities for reductions.
- A Proven Approach: With years of experience in Texas markets, we know how to challenge valuations effectively and negotiate on your behalf.
- Results That Matter: Our clients have saved thousands to millions through successful appeals, improving their NOI and ROI.
Don’t Leave Money on the Table
Commercial property valuations are rising across Texas—but that doesn’t mean you should accept an inflated tax bill. By avoiding these common mistakes and working with trusted professionals like FirstPointe Advisors, you can ensure your property is assessed fairly and reduce your tax burden.
Contact FirstPointe Advisors today for a complimentary property tax review and let us help you plan ahead for success.
James “Garrett” Cope
Senior Manager, Property Tax
FirstPointe Advisors, LLC
3201 Dallas Pkwy., Suite 200
Frisco, TX 75034
Main: 214.253.0056
info@first-pointe.com
