Passive Real Estate Investing TBT: Ask Marco - How Can I Better Manage My Property Taxes?
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Jan 29, 2026 A listener's escrow shortage sparks a clear breakdown of how and why lenders collect taxes and insurance. The show explains PITI payments and how monthly tax collection simplifies rental management. It explores the tradeoff between “interest-free” escrow funds and the time, convenience, and scalability benefits for growing investors.
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Listener Rose's Escrow Frustration
- Rose bought a three-unit property in Massachusetts and repeatedly received escrow shortage notices from her loan servicer.
- She resents handing interest-free cash to the mortgage company and asked if she should pay taxes herself.
Use Lender Escrow To Eliminate Hassle
- Let your mortgage company manage property tax and insurance escrows to remove ongoing hassle.
- They collect one-twelfth with each payment and pay bills directly so you don't track or risk missed payments.
Escrow Protects The Lender's Risk
- Lenders demand escrow because they shoulder most of the loan risk and need the property protected.
- Escrows ensure insurance and taxes are paid so the lender's collateral remains secure.