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Property insurance and property taxes are the two operating lines that most often break a Florida or Texas rental pro forma. They are not capped like owner-occupied homes, and they move with wind risk and local assessments rather than last year's rent. This is education, not insurance, tax, or investment advice.
By RentalAnalytics Editorial Team · Published September 16, 2026
They are large, recurring, and mostly outside the landlord's weekly control. When either bill rises, NOI falls dollar for dollar unless rent rises by the same amount. Copying last year's tax bill and insurance binder into a purchase model misses homestead status, a reset to just or market value, and the next carrier renewal.
This post is about those two lines in Florida and Texas. It is not another operating-expense-ratio definition. For the ratio itself, see operating expense ratio for rentals.
They set a documented loss scale that the next renewal still has to live with. NOAA states that Hurricane Helene made landfall near Perry, Florida, on September 26, 2024, with 140 mile-per-hour winds, and that Helene's total costs were $78.7 billion. The same page states that Hurricane Milton made landfall near Siesta Key, Florida, on October 9, 2024, with 120 mile-per-hour winds, and that Milton's total costs were $34.3 billion.[2]
Those figures are disaster costs, CPI-adjusted on NOAA's page, not your premium. Treat wind, named-storm deductibles, and flood as separate questions. National CPI is a weak substitute for a quote. BLS series CUUR0000SEHD (tenants' and household insurance) rose from 159.148 in December 2024 to 172.129 in December 2025. The August 2026 index was 174.806, versus 167.940 in August 2025.[1] BLS writes that "only renters' insurance policies are sampled and priced" in that index.[6] Use it as a contents-coverage check. Use a current dwelling quote for the opex line.
A homestead and a rental do not share the same assessment cap. Florida's Save Our Homes rule in s. 193.155, F.S., limits annual homestead assessment increases to the lower of 3 percent or the CPI change. The Florida Department of Revenue's January 2026 table sets the 2026 homestead cap at 2.7 percent.[3]
A typical one-to-nine-unit rental is nonhomestead residential property. Section 193.1554, F.S., says that after the first eligible year, any annual reassessment change "may not exceed 10 percent of the assessed value of the property for the prior year," and that this 10 percent limit is "for all levies other than school district levies."[4] School millage can still move with just value. A sale can reset the clock: the same statute assesses the property at just value as of January 1 following a change of ownership or control, with listed exceptions. Using the seller's capped assessed value as the buyer's year-one tax base is the wrong bill.
Look up county millage and taxable value on the Florida Department of Revenue property-tax data portal and the local property appraiser. Statewide averages hide a high-millage school district or a coastal wind pool.[7]
Because Texas funds local government with local property tax, and the tightest appraisal cap is reserved for homesteads. The Comptroller states, "Texas has no state property tax. The Comptroller's office does not collect property tax or set tax rates."[5] Counties, cities, school districts, and special districts stack those rates. The Comptroller's 2025 rates-and-levies list is for seeing that stack, not for pasting one statewide millage into every deal.[8]
Appraisal districts must appraise taxable property at market value as of January 1 and reappraise at least once every three years. The 10 percent annual appraisal limitation "only applies to a property granted a residence homestead exemption."[9] A rented house that lost or never had that exemption does not get that 10 percent brake. Tax Code Section 23.231 adds a temporary circuit breaker for many non-homestead properties: the lesser of market value or the prior appraised value plus 20 percent plus new improvements, for eligible real property at or below $5,320,000 in tax year 2026. That limitation expires December 31, 2026.[9] A 2027 model that still assumes a 20 percent ceiling needs a source after the statute sunsets.
Build them from current notices and quotes, then add a stress case. Last year's bill is a starting point only.
Do not convert a national CPI print into a Florida wind premium. The BLS tenants' and household insurance series is a contents-coverage index, not a dwelling policy.
Put the dollars into a model that already treats taxes and insurance as operating expenses. The Operating Expense Benchmark converts those lines into percents of effective gross income versus a labeled illustrative national mid-band. It does not invent metro-specific OpEx. Then change the same dollars in the Cash Flow Analyzer. Raise insurance, then taxes, then both, and watch NOI. The test is whether rent still covers the next assessment and the next renewal.
Yes. Net operating income is revenue minus operating expenses, and property taxes and insurance are operating expenses. They sit above the mortgage. A higher premium or millage reduces NOI even if asking rent is unchanged. This is the accounting identity, not tax or insurance advice.
Carriers price wind and related catastrophe risk from recent loss history. NOAA put Hurricane Helene's total costs at $78.7 billion after the September 26, 2024 landfall near Perry, Florida, and Hurricane Milton's total costs at $34.3 billion after the October 9, 2024 landfall near Siesta Key. Those 2024 storms are the risk context, not a quote for your policy.
No. Save Our Homes limits homestead assessments. The Florida Department of Revenue set the 2026 homestead cap at 2.7 percent, the lower of 3 percent or CPI. Most one-to-nine-unit rentals instead use the nonhomestead 10 percent assessment cap in s. 193.1554, F.S., and that cap does not apply to school-district levies.
No. The Texas Comptroller states that the 10 percent appraisal limitation applies only to a property granted a residence homestead exemption. Many rentals may still use the temporary 20 percent circuit-breaker limit in Tax Code Section 23.231, which expires December 31, 2026. Confirm eligibility with the appraisal district.
Do not copy last year's bill as the run rate. In Florida, a purchase can reset assessed value toward just value. In Texas, appraisal districts reappraise at least once every three years at market value. Get a current insurance quote and the assessor's notice, then stress both dollar lines in a cash-flow model.
Use the Operating Expense Benchmark to see whether taxes and insurance are large shares of effective gross income versus an illustrative national mid-band. Use the Cash Flow Analyzer to change those two dollar lines and watch NOI and leftover cash move. Neither tool is insurance, tax, or investment advice.
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