You’ve heard the saying “you get what you pay for,” and in most cases, it applies to property taxes as well. When a 2,000-square-foot home sold for $1.1 million in Chicago’s desirable North Center neighborhood, the market value estimated by the Cook County assessor’s office reached the same $1.1 million conclusion. However, the new owners decided to hire an attorney to appeal the valuation estimate, and the home’s market value was ultimately reduced by $302,000.

This situation is becoming increasingly common in the Cook County, Chicago, appeals process. While appeals are supposed to make the property tax system fairer, they’re actually doing the opposite. The current model tends to overvalue less expensive homes and undervalue more expensive properties. While this works for some homeowners (owners of undervalued high-priced homes can end up paying less in property taxes), it tends to hurt owners of less expensive homes because those residents end up paying disproportionately high property taxes when their houses are overvalued.

For real estate investors whose rate of return might leave a slim margin for error, property taxes have the capacity to make or break investments. The development, purchase, or sale of a particular property might be governed by numerous property tax issues, and estimated property tax figures are often inaccurate.

Estimated property tax is less about precision than it is about accuracy that is repeatable. There are a number of factors to take into account, including current sales transactions, rent or lease data, state legislation, and overall market trends. All of these factors influence an assessor’s position and the opportunity to negotiate.

One of the most common misconceptions about property tax is that it’s a precise mathematical science when, in reality, it’s far from it. To get as accurate a picture as possible of the tax burden associated with a specific property, here are a few important steps:

Compare Your Property to Similar Ones in the Area

There’s a significant difference between home and commercial property tax, so knowing which category your property falls into makes a big difference. Pay close attention to the county assessor’s tax classification, and for commercial properties, use current and past appraisals combined with current-year rent and lease records to find comparable properties.

There’s a limited window of opportunity for appealing the valuation of your property, and comparing your home to properties in other tax classifications will likely bring your appeal to a grinding halt. For the greatest chance of success, have a prepared list of homes with lower tax payments that are of a similar size and age and have comparable amenities.

Understand How Property Taxes Can Change

Lots of factors go into the calculation of property taxes, from geographic location to specific amenities. Be prepared for an increase in the tax value of your home if you choose to carry out extensive renovations, which could include finishing a basement, adding a garage, or creating an extra bedroom. Even simpler renovations, such as fixing up a bathroom or installing new flooring, can increase your property tax because they increase the value of the home.

It’s also important to add that the value of an individual property can be a reflection of the greater local economy. A home in an area experiencing high demand will be valued more highly, while a home in an area of low demand will decrease in valuation. Homes damaged by natural disasters or ones in need of substantial repairs will also decrease in value, leading to a reduction in property taxes.

Estimate Your Property’s Tax Bill

To get an idea of the tax bill for a specific property, start with some simple math and multiply the assessed value of the home by the local tax rate. Obviously, high-end homes will have the highest tax rates, but according to a RealtyTrac report, the second highest tax rate is for homes valued at $50,000 or less. The actual tax bill for these homes will be much lower relative to others valued in the middle of the cost spectrum, but proportionate to their value, owners in this range pay a higher property tax.

You can’t change the tax rate of your home’s location (unless you move, of course), but you do have some say in the valuation of your home. The National Taxpayers Union Foundation reports that between 30 and 60 percent of property owners are paying too much in taxes because the value of their properties is overestimated, so if you feel that the actual value of your home is lower than the market value it was assessed at, filing an appeal can ultimately lower your bill and save you money. And doing your homework to understand how property taxes can impact your investments will give you a leg up in the real estate game.