State Tax Lien & Deed Sales List
Investing In Tax Lien Certificates
Written by: Thomas Needles
Dramatic earning potential has been the theme and motivating factor regarding tax lien certificate investing. While it may seem gimmicky to state that such amazing income potential lies within this form of investment, if you do the math, it transforms in front of your eyes from a gimmick to a reality.
How Can A Tax Lien Certificate Earn Money For Me With Interest and Penalties?
When bidding at an auction for a tax lien certificate, you are bidding for a property that has failed to pay its taxes. When you have won, you have won either real estate or your investment back plus all penalties and interests accrued during a redemption period. How do these penalties and interest work? If you are like most people, you have at one point in you life not paid a credit card off balance off completely. Can you remember the finance charges that were applied to your total? How about if you paid your credit card late? Late fees were staggering in comparison to the amount that was due. This is why so many individuals have credits problems due to these interests and penalties. Now imagine real estate which has a much higher amount of money on it and place an interest upon that number. Add a few late fees. You thought credit card interest was bad - imagine interest on these back taxes for homes.
When you engage in tax lien certificate investing, you become a secured creditor. You become that credit card bill in the mail with the ever increasing monthly balance. With each month that passes, the failure to pay brings more and more money into your pocket. The smaller the redemption period, the higher the penalties and interest rates. Six month redemption periods are extremely valuable tax lien investments and will reward you handsomely once the owners redeem.
How Can Home Foreclosure and a Tax Lien Certificate Equal Money In My Pocket?
Now, if the owner fails to redeem and you have invested wisely, the property will become yours to own, rent or sell. Imagine if you bid $3,000.00 on a home that has a retail market value of $150,000.00. That is a $120,000.00 profit! You have just earned the salary of 4 middle class working individuals!
There is also the option to rent the property and have it generate revenue for you on a continual basis. An average rent can be anywhere from $700.00 to $2000.00 monthly. Imagine this money just coming to you on a regular basis. This is $8,400.00 to $24,000.00 annual income just by renting property. Making money does not become much simpler than this.
Tax lien certificate investing can enhance your salary greatly, but when you get a property owner who does not redeem, you have won the lottery. If you have multiple tax lien certificate investment, this only a portion of your annual income potential. No other investment grants you this type of win-extreme win situation. Whether it is income from interest or from renting or selling home, tax liens are an incredible asset to have in your financial portfolio. When you invest and you invest smart, it will pay off in the end.
