Fundamental things you need to know about Tax Lien Investment

Fundamental things you
need to know about Tax
Lien Investment

CONTENTS
• Introduction
• Tax Liens
• Tax Deeds
• Redeemable Deed

Introduction
Do you think of how profitable the tax lien investment is? Some people will be aware
about its pros while some may not be. Most of the people do not know how to start
with it and how to move forward with it process. There will be only few who know how
the investment process works. It is definitely going to be profitable for those who are
really interested to do it. There are basically three forms of tax lien investment.
Those are tax liens, tax deeds, and redeemable deeds. These three are slightly
different from each other in its rules.

Tax liens
• If the property owner fails to pay the taxes, the government places a lien on a
property and they issue a tax lien certificate.
• The investor who would like to invest in tax lien can buy this tax lien certificate
through county auction process.
• Once you have purchased the tax lien, then you have the authority to collect
the tax amount plus the interest rate from the property owner. This interest
amount gives profit for the investors.
• In some case, if the owner didn’t pay the amount within the redemption period
the investors have the right to take the steps to foreclosure the property.

Tax deed
• The concept of tax deed investment is different
from tax lien investment. Here, first you need to
buy the deed to the property.
• Once you buy the deed to the property, then you
are property owner and either you can use it for
yourself or you can rent it for others and earn
some profit through it.

Redeemable deed
• The concept of redeemable deed is similar to tax
deed. Once you have purchased the deed, the
property is yours and you can utilize it according to
your wish.
• The only difference of redeemable deed from the
tax deed is there will be redemption period after
you purchase the deed.
• During this period the property owner is able to
buy property back from you. The amount they paid
includes a cost of what you paid while buying plus
the penalty amount charged by the government.