Property Taxes Are Termites in Nebraska
And Investors Know it
Update: Apparently, railroads are governed by state law and the Union Pacific building falls under state assessment, not county. It does pay property taxes though. Learn something new everyday. (https://nebraskalegislature.gov/laws/statutes.php?statute=77-604)
The Flatwater Free Press and KETV did this excellent research on a form of business which buys up homes and turns them into rental properties.
Yet, the article misses out on the macroeconomics in work, so let me fill you in. The US Federal spending has been excessive for over two decades and being off the gold standard has allowed for inflation and fostered government growth. However, now the Federal government is 30 trillion dollars in debt, and inflation is the highest it has been in decades. Normally, modest inflation helps the stock market, gold and silver investments. Also, crypto currency tends to do so as well.
But the stock market is shaky, crypto currency has collapsed and gold has somewhat stalled. This has forced investors to look for safer investments. There is the Dogs of the Dow strategy in investing in dividend stocks, for example (https://www.dogsofthedow.com/).
In such an environment, land and property become commodity investments. One popular option is Real Estate Investment Trusts or REITS (Learn more from a Sikh economist at
Wealthy investors have figured it all out. Instead of paying high income taxes, they buy property, take out a mortgage, and live on the debt, without having a taxable income (Learn more at
This is how Trump got rich and yet was in debt. New York is full of such investments (
Vinebrook is not the only one turning homes into rental properties. Many homeowners rent out their homes. These rentals are not necessarily subject to the sorts of regulations and taxes a hotel would have and can offer travelers and renters affordable options. (https://www.airbnb.com/) (https://homes-and-villas.marriott.com/) (https://www.vinebrookhomes.com/markets)
The regulations actually prevent creation of new houses which makes existing homes go up in price. What can help alleviate the housing market is to encourage the building of homes. There are actually house kits where you can build your own home, yet numerous well intended regulations make the building costs high. (https://rethority.com/kit-homes/#What_Are_Kit_Homes)
Property taxes and the exemptions make the matter even worse. The Union Pacific Building at 1400 Douglas Street (image below) is
not subject to property taxes (https://douglascone.wgxtreme.com/java/wgx_douglasne/static/accountinfo.jsp?accountno=R0310340006). The building can stay half empty and the Company could take out a mortgage on it and flat out make rooms available to their traveling workers and pay no tax. I still do not know why this building is exempt from the property taxes but the Company made 1.7 billion dollars in the last quarter of 2021 (https://www.up.com/media/releases/4q21-earnings-nr210120.htm)
And big companies are not alone in these types of property investments. The Salvation Army actually owns this empty lot which is not connected to any of their facilities and it is not subject to property tax. (Image below). (https://douglascone.wgxtreme.com/java/wgx_douglasne/static/accountinfo.jsp?accountno=R2009070002) The charity raked in over 4 million dollars in revenue (https://salvationarmyannualreport.org/wp-content/uploads/2021/10/SAL-Entire-Annual-Report.pdf). They apparently are holding on to this lot as investment as they have no reason to sell it because it is exempt from taxation.
Much of this would be fine, if there was no property tax. But the average homeowner pays thousands of dollars in property tax every single year and this is money which cannot be invested back into the home. Property taxes are like termites. They eat away at the value of your home. And along comes a KFAB radio ad of a guy saying he will pay cash for your dilapidated home. What do you expect a homeowner to do?