Know About The Difference Between Tax Liens & Tax Deeds

The stock market is unpredictable. Many investors are looking for alternative opportunities for profitable returns. Real estate tax default investments are attracting many investors for lucrative returns. If you want to invest in real estate, then you need to understand real estate industry well. This will save you from bad deals or loss of investment and you will earn a great profit on your investment. 

 

Tax Liens

A security interest that is granted by an investor to a real estate property until the settlement of tax debts is referred to tax liens. A lien is placed by the government on the property if the owner of the property fails to pay the taxes. A tax lien certificate is issued by the Municipal Cooperation that defines all the fine, interests and penalties dues. This certificate is put on the auction and gives to the highest bidder. If you want to win that bid, you have to pay the highest premium or accept the lowest interest rate. After purchasing the tax lien certificate, you need to settle the full amount to the issuing authority and inform the property owner that owns the lien certificate of his property. The owner will pay you the entire amount with lien interest that can go up to 35%.

Before bidding for the lien certificate, check that the owner of the property has filed for bankruptcy. The local government offers a certain time period to pay the tax lien that can range between 6 months to 3 years. In case, owner of the property fails to pay the tax in given time period then you can foreclose the property and get the deed.

Tax Deed

In many states, municipality offers a tax deed in which you will buy the property at the auction. You will get immediate ownership of the property in many states. Most of the states will give you the ownership after a short period of time. In case the original owner of the property wants to reclaim the property then he has to pay you the bid auction along with interest that can range between 10-25%. After the redemption expires, the property becomes yours and you can do anything with it.

Whether you choose tax lien or tax deeds, you need to understand the industry, laws, and regulations of the local government where you want to purchase. Also, make sure that the property on which you want to bid is in good condition and has great worth.

If you want any help then get in touch with Mario Prisciandaro and Anthony Prisciandaro who will guide you to get best return on your investment.

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