Making Profit with Tax Liens

By dhinternational  /  January 14, 2011 / Comments Off on Making Profit with Tax Liens

Tax Liens Sure ProfitWhen purchasing tax deeds, you would want to make profit by having the property sold or rented. But it’s not the case for tax liens, there are three ways that you can make profit from these certificates. What are they? Read on to find out.

First, you get money when the lien reaches its redemption period. When the owner of the property redeems the lien, you will be paid the amount of the lien plus the interest and penalties. Many states have the interest rate as the annual rate so the longer you hold the tax lien, the more money you will receive during redemption.

Let’s move on to the second method. When the redemption period is finished and the tax lien has not been redeemed, you can then begin foreclosure on the property so you will be paid. The process may be simple or it can be complicated, depending on the state. There are states wherein you would have to go through the process with a lawyer which you will have to spend much cash and may take time. Now, there are also states wherein it’s easier since you just need to do petition at the county court or do the application process in getting the property’s deed. But if the property needs to go through foreclosure sale, there are chances wherein you may not be able to get the property since it will go to the highest bidder at the sale but you will still be paid for the lien.

The third process involves assigning the tax lien to another investor. There are states that allow assignment or tax lien certificate sale to another investor. With this, you don’t have to go through foreclosure process. Though you may not end up with the property with this method, you will still be able to collect profit sooner.

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