Many people do not realize that you can acquire a property or encumber a title by bidding on a tax lien offered by their county in some states, which can turn into a tax deed.
Tax liens are when the property owner does not pay their taxes before April the 1st and then proceeds to an auction for someone else to pay their delinquent tax bill.
In return for someone else paying the bill that individual receives interest on the delinquent account. The owner has until June 1st to pay their taxes or else will be in default and will need to pay their tax bill plus interest.
Within the first year, the individual that purchases the delinquent tax bill receives a tax certificate.
If the owner pays the delinquent bill then he will have to pay the principle (the taxes) and interest to the individual that acquired the tax certificate. This interest on a tax lien can go as high as 18 percent and is guaranteed to go back to the tax certificate holder.
After the second year, if the owner decides not to pay their tax bill then the owner of the certificate can apply for a tax deed. Once acquiring the tax deed, they gain access to possession of the property.
So, what so great about bidding on tax certificates?
Two reasons a guaranteed interested on the tax bill that you chose at auction when bidding on the property and the second is the chance to acquire the title of the property for the prices of the taxes.
Please remember before acquiring the property you will want to make sure that there are no liens on the property because those liens will transfer to you.
Most of the time, the property will be sold as is. Once understanding this process, this is an easy way to earn interest on your principle without any risk. just make sure that there is no liens on the property.
Good Luck bidding and enjoy the guaranteed interest with no risk.
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Author: J. W. Sabastian
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