How to start investing in Tax Liens
If you are considering tax lien investing, you are on the right track to realize that real estate is the best and the safest investment you can make. It is an accessible and lucrative, with a lot of options to create multiple income streams. If you collect the right information and find out about the best conditions, the return on your investment and a decent profit will be guaranteed.
Do you know how to invest in those? Governments raise money in order to provide services and benefits trough taxation. The taxation on “real property” means that the owner of a parcel or property is assessed an amount to pay according to the value of one’s property.
Mostly, the tax is collected in the area where the property is located by the state or local authorities. When the owner of the property is unable to pay the tax, the tax amount becomes a lien against one’s property. The lien against the property, as it is, doesn’t do much for the local governments. They are not direct funds they can use for the promised services and benefits for their citizens.
The government officials need the real money and they need it now. To get them, they collect due taxes that are unpaid by selling properties. The sales are done at public auctions as Tax Lien Certificate or a Tax Deed.
How to start investing in tax liens?
To learn how tax lien investing works and to invest in successfully you need to get the right information. The information is not easy to find, since it is not well publicized. You won’t get banks or brokerage houses advertise good deals because they want it for themselves.
Take your time understanding the process and learn all about investing in Tax Lien Certificates or Tax Deeds. Different counties have specific way to do things. You can read books on tax lien investing, or read on-line.
With limited capital you should focus on Tax Lien Certificates. With a goal is to buy in order to sell, focus on Tax Deed Sales. Start with contacting the Tax Collector’s office in your area and find out the time and location on the next Tax Sale. If you are lucky, you might end up with a copy of the Tax Liens to be auctioned. Check in local newspapers for sale notices of properties to be sold.
Learn about the terms and conditions of the sale such the interest rate and the way it is calculated, about any unsold Tax Lien Certificates from the last sale, etc. You might end up with a big list of unsold Tax Lien Certificates.
Be persistent in your search and don’t stop at one call. The pearl might be waiting for you among thousands of bad deals. After you have all the answer to your above asked questions and you feel positive that you’ve gathered all the possible information, get ready for the second phase of investing – the actual sale.