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If you spend some time researching, you’ll find that investing in tax lien certificates is a safe, accessible, and lucrative investment opportunity. Investing in tax liens can provide multiple streams of income from interest, penalties, and purchase of properties at pennies on the dollar.

Some real estate gurus make tax lien investing sound like it’s a sure thing. That you’re guaranteed to make huge interest rates and that’s it’s government guaranteed. Unfortunately for you, they leave out a few facts and are stretching the truth quite a bit. Tax liens can be a relatively safe investment. A good return on your money is also possible. The catch? A lot more people are investing in tax liens now than 5 years ago, and the bids are pushing down rates of returns. Even in small counties, you may be surprised at the number of investors that show up to bid at tax lien auctions.

Tax liens are handled a little differently in each state, but they are essentially the debt that a property owner owes for late property taxes. Investors buy these liens by paying the unpaid taxes on the property. Property owners are forced to pay the lien with interest and penalties or face loosing their property. Each state has different laws that govern the amount of interest required to satisfy the lien. In Michigan, the interest rate can be as high as 50%.

While it is true that the property owner will pay up to 50% interest and the county will forward that money to you as the lien holder, you don’t necessarily get to buy the lien at face value. It used to be that a few investors in any given county would more or less divvy up all these great little investments among themselves but things have changed. Know institutional investors are showing up at these auctions and it is much more difficult to get good returns.

5 Steps to Buying Tax Lien Certificates

1. Call your local county and request information on buying tax liens. The process can be different from county to county. Some counties don’t sell tax lien certificates; instead they sell tax deeds.

2. Preregister for the tax lien sale of your choice.

3. Find out the available method of payment for the liens.

4. Attend the tax lien sale, and double check the accuracy of the county lists.

5. Be sure to find out the laws and timing of tax lien redemption.

Tax Lien Properties.net is an excellent resource for learning about the ins and outs of investing in tax sale properties. This website offers an informative look at how to buy tax liens and deeds from tax lien auctions as well as over the counter tax lien sales.
Article Source: http://www.articlealley.com/http://brentcrouch.articlealley.com/5-easy-steps-to-investing-in-tax-liens-218108.html

Is there someone who is familiar with Illinois tax lien sale?

I would like to buy a tax lien but I am confused with the 2 yr redemption period here in Illinois. If you purchased a lien for the tax year 2006(sold in 2008), and the owner did not pay their taxes and failed to pay again in tax year 2007, will you have the right to purchase the 2007 taxes and foreclosed the property OR will it be sold again in 2009 for the 2007 tax sale? Please help THANKS

Answer
The time of the tax sale varies by county. You have to follow the regulations about notifying the last taxpayer on record for the property or other interest parties about redemption. If they do pay the taxes, you get that money with the interest. If they do not, you can get tax deed and possession of the property after 2 years. In the meantime, I assume that you have to pay taxes on the property. But read through the rules, and make your own decision.

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