That time of the year has arrived. I must send in checks paying property taxes on my rental properties. Last year, I contacted my lender and requested them to stop escrowing money to pay for taxes and insurance. Instead, I would pay it myself. This way, there is no confusion and quandary over how much money to set aside in escrow on top of pure P+I payments (principal and interest).
This has simplified things for me, because I can see exactly how much is owed on each unit. I don’t have parts of my net work tied up in escrow accounts that might be stocking up too little or too much. Instead, I have an annual cost that has to be paid and is instantly reflected when I make the payment in my net worth tracking spreadsheet.
As I wrote four hefty checks, it is a bit challenging, since property taxes in Texas are a bit steeper than Tennessee. But knowing that my tenants are paying off the mortgages at record pace and I’m earning top rent, I feel good that I’m developing strong, cash flowing assets that will build strong retirement wealth down the road. And I’m constantly reminding myself that real estate is one of the strongest investments one can make in growing wealth.