The Truth About Tax Lien Investments
Tax liens are a little known investment strategy backed by the U.S. Government. Investing in tax liens provides you with reliable returns on investments that are secured by tangible real estate property.
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Brokers and Licenses
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You do not need to use an investment broker to invest in tax liens, nor do you need a real estate license.
Secured Investments
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Investing in tax liens is similar to making a secured loan. You pay back taxes on someone's real estate, and if they do not pay those funds back to you within a given period of time you can sometimes take legal possession of the property.
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Liens Are Not Deeds
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When you buy a tax lien, you are making a loan to the property owners in the amount of their back taxes. They pay you back with interest and or penalty fees in a given period of time. You do not get a deed to the property and you may not take possession of it.
State Differences
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Tax lien auctions and sales differ by state. Some states allow penalty fees while others allow investors to "bid down" the interest rate and award the tax lien to the bidder who offered the lowest interest.
Commercial and Residential
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Tax liens can be purchased on any type of real estate including homes, raw land, commercial and government buildings.
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References
- Photo Credit tax defined image by Christopher Walker from Fotolia.com
