Are You Ready To Start Investing in Tax Liens?

By dhinternational  /  January 27, 2011 / Comments Off on Are You Ready To Start Investing in Tax Liens?

Starting Tax Liens InvestmentBefore you start investing in tax lien certificates, you have to realize the two most important factors needed to begin: time and money. First, let’s talk about time. Most states have their tax lien sales at business hours on weekdays. It is important that you are able to attend to the tax lien sales in order to bid at the properties you are interested in. Though there may be states that have online bidding, it is still more advantageous to attend to actual sales. Do you think you can make some time for that?

Another thing that you might want to consider is that you have to have some time to do due diligence on the properties. You see, the property list is not very detailed as it usually just contains the tax ID number, amount owed, and the record owner. Sometimes, it doesn’t even provide the property’s location. Because of this, you have to search for the address and assessment information and then find some time to view the property physically. Check if the property if it is worth more than the amount that is owed. Remember, you may have to pay its taxes throughout the redemption period before you can have it foreclosed or apply for its deed if in case it won’t be redeemed.

Now, let’s move on to the second factor: just how much money do you need in order to start investing tax liens? While it may be true that you can buy a tax lien certificate below $200, you have to know that you are still responsible for paying its taxes until the lien is redeemed, otherwise, the property will show up for next year’s tax lien sale and another investor could very well buy that lien.

It is well recommended that you have around $2000 before you can say that you are ready to start in tax lien investing. You also need to have some to be able to join in tax lien sale auctions and do some due diligence. Remember, the more time and money you can invest, the returns will be bigger as well.

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