I've been flipping through the commercial section of Craigslist lately. I've seen some of the giant warehouses listed as tax tree and/or tax abated. What is that? And why is that?

Adjustments or reductions or deferred payments by the taxing authorities to entice someone to take the offering

Likely property in areas in decline or with some issue. Kinda like a 99.00 special we read about here

It means yes, there's a re tax break. It also usually means the area is really bad and they're hoping to entice development and improvements.

In the abated areas in St. Louis, there's nice, new houses, surrounded by boarded up ones... a great place to live.... ???

As others have said, abatement can mean either a deferral or total wipe out of taxes for X-years.

Let's say a blighted area of 10 acres comes with a yearly assessed tax bill of $100,000 per year. The city gets tired of mowing it and removing all the junk cars, tires, and drug needles every month and offers a 10-year tax abatement to any developer who will construct low-income housing with a rent cap of $Y per unit. The developer normally wouldn't be interest, but because he stands to "save" $1 million in taxes, now the deal makes sense.

The city has several incentives:

1) The property is no longer a hassle or expense their code enforcement department has to deal with.

2) They anticipate future, higher revenues after the abatement is over. You can bet that property, once developed, will be reassessed at a much higher rate. $100,000/bill on vacant, crummy land becomes $1,000,000 for an apartment complex, for example. The revenue in years 11 & 12 more than make up for the revenue "lost" during the 10-year abatement.

3) The community looks favorably on the city for "doing something" to clean up that messy old lot that was such an eyesore. Always a plus in an election year!

I'm hoping to learn "transition" techniques from DIY to hands off for maintenance type stuff.

I know I do DIY now and am an advocate for it. It works for where I am at now. I don't want to be doing it in 10-15 years. I just don't know how to NOT, effectively.

I also hope to see 1-2 commercial real estate speakers.

Especially with the tax abatement stuff I posted about. That's intriguing.

2 things that I know will happen are hearing something from a speaker that will blow my mind open and hearing something from an attendee that will do the same.

Tax abatements are also used as political favors in corrupt cities. In 2007 I toured some $350 K condos on the water in Tacoma. My house was about that in value, and I wanted to see what a condo costing that much would look like.

The condos were new construction, on the water, great views, high end finishes. The saleswoman was gushing on and on about the ten year tax abatement. Washington, without an income tax, really sticks it to property owners in property taxes.

RathdrumGal...Amen. Taxes are almost always manipulated to achieve goals by the political party in power and are rarely applied fairly. This is why a head tax--where everyone pays the same amount--is the only truly "fair tax". Everyone should pay an equal amount of tax, or by it's very nature the tax is a tool for favoritism. You and I pay the same for a loaf of bread or a brand new Mercedes (assuming we negotiate equally well!). Taxes should not be any different, and as long as they are they will continue to be used as tools to further the goals of certain groups against other groups.

The only exceptions would be I think a sliding scale would be good based on age brackets only, not income or behaviors. If you're 18-24, you pay $X; if 24-32, you pay $Y, etc. That way we could account for the very common factor that most folks grow their earning power, then scale it back into retirement. While still not 100% perfect, it would eliminate almost all corrupt, manipulative tax laws that favor people based on income, gender, kids/no kids, house/no house, insider or outsider, etc. It would be, in essence, true "equality" which is what the Left continually howls for and which the Right claims it supports as well.

So how do we, as investors, use this to our benefit?

And to be clear, my "head tax" idea would only allow the amounts and age brackets to be decided by national, binding referendum. No need to let Congress decide how to tax Group X vs. Group Y. It would be percentage based, so everyone votes to raise or lower the tax on ALL groups (including their own) by 5%, 10%, etc.

Oh yeah, and no more deficit spending. You want it? Pony up and vote your own taxes higher!

Simple, elegant, equitable...

I think we'd see an explosion of growth the likes of which our country has never known, and wealth over all groups of people would rise significantly as we only spent money on the things most crucial to our nation's best interests rather than "pork" that only benefits those with access to influence.

Hi NE, since I hijacked your post a bit, I'll toss out a legit answer to your question, "How do we benefit?"

There are several ways:

#1 - Become a "big boy" developer who does multi-million $ projects.

#2 - Negotiate shares of ownership with big boy developers.

#3 - Buy properties with tax abatements in place already and make deals with your city to keep rents below $X if they'll agree to extend the abatement or do a partial abately (i.e. 50% off for 5 years). This is an upside gamble for you because if rents take off you cannot increase to market value without losing all of your future (and possibly be required to pay back past) abatement. But if you think rents have topped out for the foreseeable future, you win if taxes rise.

one I am very aware of was right at oceanfront which had become a ghetto. 10 year abatement and I have no ide how much/comprehensive.

It involved heavy reliance on the use of Eminent Domain which turned into a multi year struggle with one long time property owner battling them in Court...and winning. Several others sued the town for the low appraisals and all those few won. [there I a lesson for ya!]] The decisions are of landmark quality.

Now that it is hugely successful, the same developer [Kushner] has comeback requesting more abatements for Parcel 3. I do not know the decision there as yet. I do not think that it is warranted s the area is no longer "in need of development" but hey....ya know? ;-/

Sadly just don the street along the same stretch of oceanfront one "little guy" snuck in and is trygint to do his own project admittedly no where near the scale of the original Asks for the same deal and of course the answer was "no". He is in court now.

In a different town 4 miles inland the same BIG develope has bought the local Shopping Mall and is proposing a re-development of it with 700 apts. as well as open space development/re-configuration of the shopping areas [they originally asked for 800 apts

. This is in My Town and I have already been impolite enough to publicly ask if there are going to be or have been any requests for tax abatements.

Weasley, mumbly answers have been forthcoming with also "we don't know/think so/doubt it" and the same answer given to the question of "what is the approx. price for these rentals".

A law suit was filed against this project by the NIMBY's.

Sid of MO, EXCELLENT method for taxing!!! That means that the IRS would be gone and there are a few amendments that need changed.

Unfortunately the Swamp is not going to make the fair and much needed changes to make it happen. It's a form of control...

To NE's point of Tax Abatements. The local, county and state give Large corporations the Abatements to help economic growth in the area. However it may be for 10 years the corporations takes advantage of the tax breaks. They are there for 10 years then shut their doors, either move elsewhere or close down the operation. Depending what was built in this area that may be blighted there could be environmental issues to deal with removing from the area. If you know the area and know what was there prior you may not want to go near the property due to the environmental issues. Especially the clean up costs.

It's kind of like the steel industry especially in the northern states. Like Ohio and Pennsylvania come to mind. The steel mills built the building moved in the equipment. They may have been there for 50 years more or less and got out of the building and equipment what they needed and did not improve the equipment so they are gone and now a building is vacant or an eyesore.

The same mindset some landlords have they do very little to the unit(s) keep taking the money and in time the building becomes an eyesore. And now the rental property has a bad reputation and the landlord(s) are now considered "slumlords".