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A Tax Lien Property is any Property with a Lien for Unpaid Taxes

Written by: Jason West

Tax Liens Can Be Placed on Property by the State and Federal Government
A tax lien property is a property where the owner has been delinquent on their taxes, causing the government to place a lien on the property. Most commonly, tax liens are placed on a property by the State but they can also be placed by the Federal government.

Tax Liens and Tax Deeds are not the Same
While all 50 states have similar programs to deal with tax delinquency, some states are tax lien states while others are tax deed states. There are different procedures for tax liens and tax deeds, and for the purpose of this article we will be talking about tax liens specifically.

Investing in Tax Lien Properties is Considered a Safe Investment
To an investor, a tax lien property is an opportunity. A tax lien is just that - a lien on the property. In the case of tax lien investing, the investor is the lien holder. When you pay the taxes on behalf of the homeowner and take the tax lien on the property, the homeowner has a set amount of time to pay you back the lien, plus a set amount of interest. If they fail to reimburse you within this time period, you then own the property. The specifics vary from state to state, but as you can see investing in tax lien properties can be a very secure investment. You will either be reimbursed with interest, or you will end up owning a property for pennies on the dollar.

Researching Tax Lien Property
Finding tax lien properties takes some research and may involve some small fees. The lists of properties can be found by visiting the county clerk's office and making your request. Some counties charge fees for the lists while others do not. If this method is not practical for you, you can also use one of the many online public record services to find lists of tax lien properties.

Premium Tax Lien Properties Are the First to Sell at Tax Auctions
Once you have found a tax lien property, you will need to participate in the tax lien auction. To bid on tax liens, you will probably have to register and should be present at the time of the tax lien sale put on by the county clerk. While it is true that not all of the properties sell at auction, it is also true that the best ones will go fast. There are many investors like you competing for the premium properties and in order to have a chance at securing one of these tax lien certificates, being present at the auction is a wise decision. The tax liens that do not sell at auction may be passed over for a good reason, rendering them less attractive an investment.

Participating in Tax Lien Investing
Now that you know how to locate tax lien properties and bid on tax lien certificates, you too can participate in tax lien investing. Tax lien properties can be a great way to make money in real estate with less risk and investment that other real estate investing techniques.

 

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