2012年7月27日 星期五

Profit From Purchasing Tax Liens


Tax liens are the taxes collected by the government from residential and commercial properties to be used for road repair, pay law enforcements or any programs funded by the county. There is also a part on your mortgage payment where it goes to your property taxes each year. But some property owner would prefer to pay for it separately especially if they're already done paying for their mortgage, so they should be accountable for the yearly tax payment.

Each county are getting these tax notices each year and for those who fail to pay their taxes will be considered a delinquent taxpayer. This will give the government the right to set a lien against your property and lien certificate will be put up for sale. Then, the highest bidder will have to pay the unpaid taxes and will be given the authority to collect the payment with the interest or penalty only. That means purchasing tax liens will only give them the right to collect taxes but not really have any rights when it comes to the property itself.

When purchasing tax liens certificate, it is vital for you to understand how the system works before you go and make the bid in any auction. Sale on tax lien properties normally requires a deposit of ten percent in the form of a certified check. So when some bidders will want to get their tax lien certificate, they will receive it by mail. However, these policies vary from state to state or county.

The owner will have to pay at the allotted time plus the interest accrued to the tax lien certificate holder. It is also imperative for the investors who are purchasing tax liens to know if there is a possibility of owning the property. Some state allows the lien certificate holder to foreclose the property if the owner will not be able to pay until the redemption period, so this will give them an opportunity to claim full ownership of the property.

However, most homeowners will do everything they can to raise funds just to pay their owed taxes and save their property from being foreclosed. So there is a higher rate for these loans being paid. In which case, this will still be a win-win situation for the investors. If the loan will end up being paid, they will have the full amount they invested plus the interest set by the government at the time of the lien certificate auction. If not, they can have the property. And these make purchasing tax liens profitable and a good strategy for real estate investors who want to own a property at a fraction of their worth.

You need to make sure that you have made your research and preparation before you enter the tax lien auction if you want to consider this type of investment. You may as well attend the actual bidding so you can properly observe and ask the other investors on how the system works. They can exchange ideas and give you some pointers on what to do and what to avoid.

You may also ask other real estate tax lien professionals you know or attend seminars, or search more information online to give you detailed tips when purchasing tax liens and how it will benefit you. Just make sure you understand the pros and cons before you go into the real auction or invest in real estate.




Claud Pearce is an active real estate investor based in Cincinnati, Ohio. He is a member of the Greater Cincinnati Real Estate Investors Association and works exclusively with investors who want to grow, learn and succeed at real estate investing. Get more information now at http://www.cincinnatireia.com.





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