If you know someone who participates in tax lien auctions, they would tell you that taxes can be a very profitable investment to make. A whole new business has opened up because of the fact that there are many people out there that researches local auctions for sale on real estate for delinquent property taxes.
A beginner on tax lien certificate investing is going to ask if it is safe, well the answer is yes. It is good to explain first that lien certificates help the government in recovering from tax revenues lost. Tax liens were made so the government can collect back taxes without the need to take ownership of those properties. The local taxing authority in the state or county can place a lien certificate on a delinquent homeowner when property taxes are not paid. The federal can also do the same for unpaid personal profit taxes.
The homeowner loses control of his property unless he pays the debt in full which happens when a lien is issued against the real estate. The title cannot be used as collateral nor transferred. After a lien is filed, it can be sold at an auction on the state, county, or federal level. There are also instances wherein the local taxing authorities offer tax liens over the counter.
Therefore, the government is completely in control of the process. This makes tax lien certificates safe and profitable for interested investors. Remember though that certificates need to be paid in cash right away after the bidding or at least within the forty eight hours time frame.
