Real Estate Tax Certificate | Real Estate Tax Lien Certificate: An Overview

A potential investor is always on the look out for the best and the safest place to make a profitable investment. A good investment should necessarily be one which is supported by the government, pays incredibly high returns and offers sufficient security. And for those young prospective investors who are on the hunt for investment opportunities, tax lien investing is perhaps, the top solution!

For those unaccustomed to the term, a tax lien could be broadly defined as a lien that is imposed on real estate for the non- payment of real estate taxes. In most states, the government will sell the lien to the public to create a balance in the budget. As part of the procedure, a tax lien certificate, supported by the property, is issued to the investor. Later, the investor collects the penalties which are owed by the taxpayer upon redeeming the lien. In most states, the penalties for tax certificates are extremely high.

The greatest benefit of a tax lien is that the investor gets a significantly high rate of return on investment or the property. And what more, they are a lot advantageous than the bank CDs!  

Let’s take a look at some of the key benefits offered by tax liens.

Tax liens are reasonably priced and this is obviously, their best advantage to an investor!  Mostly tax liens are priced in the range of $200 to $1000, thus making them conveniently accessible for the average investor.   Moreover, investment in tax liens does not require any special licenses.

Tax liens are generally sold by three means: at live auctions, counters, or internet auctions. Live auctions are usually conducted once a year in the county courthouse. The investor is given a bidder number. He can either bid down the rate or bid up the price. The bidding process varies in accordance with the state and local laws.

Buying over the counter is another way to buy tax liens. In this procedure, the investor calls up the county, chooses the property he wishes to bid on from a given list and sends a check. In most areas, except certain rural constituencies, Over the Counter (OTC) liens are usually sold.  OTC liens are those that did not sell at the live auctions.

The most recent and astonishing breakthrough in tax lien investment is internet bidding. In this process, the county conducts an auction on its website or a third party website usually for a week or so and the investor places a bid via his personal computer. Tax lien investment is gradually emerging as a major investment strategy because it is extremely convenient and rids the investor of traveling and other related hassles. So, grab your tax lien today and carve a profitable future!

Related: Internal Revenue Service, Tax Liens | Washington State, Not A Tax Lien State

Questions? Let us help you. We are Joe and Colleen Lane servicing the real estate needs of clients for Kennewick Wa real estate and surrounding communities.

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