Are the Tax Liens Certificates a Good Real Estate Investment?
Investing in Tax Liens Certificates is one of the less known methods. It became more popular for last few years, especially because of the Internet that brought to the public a lot of information.
One of attractive features of Tax Liens Certificates Investment is a pretty good and stable level of ROI (Return On Investment). On other side, it is a kind of Real Estate Investments that requires more knowledge and more research.
What is a Tax Lien?
Every Real Estate Property Owner is under law of paying Property Taxes. Property Taxes are collected twice a year by local taxing district (usually, county). For every taxing district the collection of real estate property taxes is the major source of cash to provide valuable government services (fire, police, etc.).
To secure that unpaid property taxes will be collected, the county records a tax lien on the property with delinquent property taxes. This lien has highest priority and supersedes most other liens.
Tax Liens Sales procedures are different from state to state. Every State regulates major rules of Tax Lien Sales inside the state but every local taxing district (county) can adjust Tax Liens Sale procedure to match local requirements while keeping it in the limits of State Code regulations.
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Depends on State there are two major approaches:
In case of Tax Liens Certificates Sale the local government sales to the public the
Tax Lien Certificates with defined interest rate and ability to foreclosure the property in the future (after redemption period expiration).
To learn more about investing in Tax Liens Certificates we recommend excellent book here
In case of Tax Deeds Sale the local government sales to the public the
Tax Deeds with ability to transfer ownership of the property from defaulted owner to buyer in the future (after redemption period expiration).
To learn top profitable strategies for Tax Deeds Investment we recommend very practical manual here
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