Tax Liens Redemption Periods

By dhinternational  /  July 8, 2011 / Comments Off on Tax Liens Redemption Periods
Tax Liens’ Redemption Periods

Tax Liens’ Redemption Periods

A redemption period is the specific frame of time wherein if the property owner is not able to pay off the tax lien, the investor can have the property foreclosed and may get the property for pennies on the dollar. If however, the property owner is able to pay off the tax lien including the penalties and interest, he can then redeem the property.

So when does redemption happen? It could actually happen a day after you bought the lien or it could be weeks later, months, or even years. It just depends on the situation.

Now before you start to invest in tax liens, you must know the redemption period as it varies from state to state. While some states have short redemption periods, others can have really long redemption periods so it is important to familiarize the rules of the state/county you are interested in investing in. Take note that if you are to invest in states with long redemption periods, you can get high interest rates while if you want to get really cheap properties, then check states  with short redemption periods.

While on redemption period, you are required to do some pre-foreclosure activities with your tax lien such as sending notice to the property owner that you have the tax lien, giving notice to newspapers, filing court documents, and doing title searches. But you don’t have to worry much as these things are often taken care of by an attorney. In most states, fees for your attorney are added to the lien’s total value and will be reimbursed at redemption with interest.

Remember, it is important to follow the specific state laws when purchasing tax liens as you would not want your tax lien to be invalid just because you have missed a significant pre-foreclosure activity.

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