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Rising Taxes

Interest rates on mortgages furnish another
indicator for high rents. Principal interest rates,
formerly about 6 per cent several years ago, are
now hovering around 9-10 per cent. Such an
increase, according to Mr. Marshall, makes a
difference of $10 to $15 in a month's rent.

After the apartments have been constructed,
operating expenses enter the picture. C. Stuart
Raynor, Jr., an associate of Alcova Realty,
outlined these major annual operating
expenses: property taxes, maintenance and
repair costs, and utilities.

The biggest of these expenses is property
taxes. "Ridiculously high" is how real estate
agent Richard DeButts described city taxes. Mr.
Marshall also noted taxes as a factor in
determination, pointing out that this is the first
year in the past four that city property taxes
have not risen.

The process by which the City of
Charlottesville assesses property taxes is very
complicated. To simplify it, after deductions
for interest rates, vacancy and credit losses,
property value depreciation, and operating
expenses, an apartment owner is taxed at the
rate of 30 per cent of the appraised value of the
and buildings.