Investing in Tax Lien Properties

You've found the auctions in your territory, and you've armed yourself with the knowledge from these pages. Now the time has come to devise your plan of attack. Whether you bid from home or at auction, you can't do yourself a better favor than the proper preliminary research.

Investing From Home

If your state doesn't utilize the tax lien system and you'd rather not shell out for the gas or the plane tickets and travel to an auction, you can always invest via the mail or participate in online auctions. This is certainly convenient but to be successful this method demands a responsible and motivated researcher. If you can't physically view the property and the neighborhood, contact the county holding the auction and review the property's most recent appraisal. When investing long-distance it's wise to stick with newer properties. Older homes may be plagued by asbestos or lead paint, which can all but doom any attempts to sell it later on.

At the Auction

If you decide to travel to a tax lien auction, a little prior investigation will make the whole experience a great deal more enjoyable and less stressful. Rules and fees can vary from auction to auction. Auctions provide no time for second guessing-there are counties with hundreds of properties to get through and the auctioneer will not hesitate to slam down that gavel if no one chimes in. Split second decisions are the difference between good and bad investments.

Aside from depths of the wallet, level of research is usually all that can distinguish one potential investor from another. Scrupulous research can give you the upper hand over even the seasoned veterans in the crowd. Imagine this scenario a property in seemingly decent shape is being auctioned off and you watch as your competitors bid higher and higher on it. Because you actually drove down to the neighborhood to look at the home, you know it's in an unsavory part of town and unlikely to sell for good money if acquired and sold. You've contacted the county and know the amounts owed and the length of redemption period, and you realize it will be virtually impossible for this owner to redeem their taxes. Whoever wins this bid is going to be stuck with worthless piece of real estate. You can smile to yourself and feel confident that you will never entangle yourself in the nightmare of foreclosing such a property.

With research and smart investments, you can't lose you'll either gain back your investment, now fortified with interests and penalties, or you'll "win the tax lien lottery" and acquire a great property that you can rent or sell at up to a 300% profit.