Tax Liens & Tax Deeds Are Predictable, Certain And Secure Investments
In many states, if the property owner does not pay the property taxes the county or municipality will accrue the taxes and penalties for many years
. However, at some point in time, the state statues will require the government to issue a tax lien certificate or a tax deed, which are sold at tax sale auction in all states. These liens or deeds allow the counties and municipalities to collect the tax revenue they need to run the government rather than wait for the property to be auctioned to collect the taxes due.
Delinquent tax sales are public auctions, usually oral bid sales, where investors and members of the public bid on the right to pay the delinquent real estate property taxes. When talking about past due taxes, it also could include penalties, interest, and administrative costs. Past due taxes could be for the prior year or maybe from past due years. The code from the state will delineate what taxes are due, when to collect and when installments are due on the past amount.
Tax lien sales and tax deed sales are public records and listed on a county's tax sale list.
Investing in tax liens/tax deeds is not a complicated process. These are government sponsored programs that are operated and administered by local municipalities and counties in the United States. Therefore, you can rely on the legitimacy of the program. These investments are often low risk, high yield involved in investing. Here's an example, Iowa allows tax lien certificate holders to collect interest rates of 24% annually (or 2% per month). The state of Illinois allows up to 18% penalty on tax lien certificates for the first six months and 36% for the next 6 months.
There are of thousands of people across this great country who don't pay their property taxes and when they do not pay, the local government has a problem - no revenue! So as I said earlier, the county then sells the tax lien certificate or tax deeds at an oral bid auction on a property that has delinquent taxes to the investor.
Here's how you make money that is predictable, certain and secure - In essence, you're paying someone else's property tax and make money in the process. After the property owner pays the back taxes (plus penalties and interest) to the local county or municipality, the investor is notified to then return their tax lien certificate. Then the last step in the process is the investor is paid the amount of the certificate PLUS interest and in the meantime the county/municipality has the tax money it needs to run the government.
These tax lien certificates are available in 3,300 counties and municipalities across this great country, in every county in the United States provides some kind of tax lien certificates, whether it is tax lien certificate or a tax deed certificate. These certificates are the safest and the most lucrative investment in America today. The government issues these certificates by the hundreds of thousands on properties that have delinquent, unpaid property taxes. Raise your hand at the auction to buy that deed or certificate. Then take it home and put it in a safe place or a safety deposit box. When you buy a tax lien certificate, you will earn a high rate of interest, depending on the state, possibly 16%, 18% or 24%. You will receive all of your money back plus interest when the property owner pays their back taxes, penalties and fees. When you have this investment, you will get your money back, plus you'll get a high rate of return and you're buying these from the government, so you will get all your money back. Therefore, when you own a tax lien, you have the absolute priority lien on that property. You either get paid, or you get the property.
by: Ted Thomas
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