Most people, due to a lack of knowledge don?t really bother. Some might assume they need to have legal expertise or a real estate background to purchase liens, or some might believe such investments to be too risky.
Here are 7 reasons why you should consider investing in tax liens.
Tax lien investors can perform better than the stock market, getting 10 - 300% returns
(By investing in states that levy penalties)
Tax lien investors have control over the whole process from start to end
Tax lien certificates are a first position lien, putting the tax lien investor ahead of all other liens (with a few exceptions).
Tax lien certificates make a very stable investment
Anyone can invest in tax liens with any amount of money and receive excellent returns, provided that you are knowledgeable and perform your research BEFORE you go to the auction
Tax lien investments are 100% legit, they are administered and enforced by the county/city and part of the statute and local codes!
Tax lien certificates make excellent investments, because the certificate is secured by the underlying real estate, most time 90% worth more than the actual certificate.
For an example of how a tax lien is created; let?s say a homeowner owes $2,000 in county property taxes and is declared delinquent. The county will place a lien on the property, then will sell it at an auction in the form of a tax lien certificate.
Investors at the auction pay the taxes and possibly some other costs. Starting at the time you buy the lien, interest starts building on the unpaid taxes. Winning Investors pay the unpaid taxes plus any premiums and are issued a certificate, which will start earning interest until either the property owner pays the taxes or the winning Investor can foreclose on the property.
Tax Sale announcement and lists are usually published in newspapers a few weeks before the sale. Tax Sales are held all across the United States. Tax Sales may take place online, or in person at the local county/city department of treasury. At the time of this writing, a lot of counties are moving their auction sales online. Check with your local department of revenue / taxation to see what the norm is where you reside or wherever you are interested in investing........
