Tax Lien

Finding a tax lien property to invest in can prove to be very beneficial to your finances.  Whether you're in it for the long haul or you just want to make some extra cash during the influx of foreclosing homes on the market this is a great market to start researching and get involved it.  By purchasing property with a tax lien attached to it you can stand to make a return for your money.

A tax lien is a lien imposed upon a property when the owner fails to pay the property taxes on it or they fail to pay their income taxes.  What is interesting about a tax lien is that it follows the property and not the owner.  Many times the homes which have back taxes are second (or more) homes to the owner or inherited homes that they really have no interest in.  Because of this they are willing to sell for a small price in order to get the property taxes and concerns out of their hair.

When a tax lien is put upon a piece of property the owner is given many chances to pay off their debts.  When they have failed to do so for a significant period of the time the government sends the property to auction in the form of a tax lien certificate or a tax deed.  Purchasing the tax lien certificate is an opportunity for you to make money off of the interest that the owners pay on their back taxes.  Essentially you front the money for the back taxes and then get the high interest payments that the government would have been receiving.  When you purchase a tax deed you own the property, but then also become legally responsible for the back taxes owed.

Despite which road you decided to travel, be it tax lien certificates or tax deeds, you stand to make a good profit.  You'll either get a hefty chunk of interest within a 1-5 year redemption period afforded the owner or you'll get the profits made from selling or renting out the property.  You could even live in it if you wanted.

The wonderful thing about properties that have a lien imposed upon them is that they are usually free and clear, no mortgage liens. Etc. attached to them.  If there were a mortgage out on the home, the mortgage company would pay the taxes, because the tax lien then becomes a high risk situation for them.  A tax lien is superior to a mortgage lien and so they stand to lose their investment should the property be sold.

By purchasing a piece of land or a home with a lien on it you can make some good money.  Whatever you desire to do with the property is irrelevant, because either way you will make money.  Whether it is from a lack of a mortgage payment, from a steady income from renters, or a bulk payment from selling or interest received a lien is the way to go.  Investing soon would be beneficial to anyone because of the current influx of foreclosing homes.