What is the Average Cost of Tax Lien Certificates?

Ted Thomas reveals the Average Cost of Tax Lien Certificate. Is it affordable? Is it risky?

Learn how you can benefit from the high returns on this little-known investment no matter how much money you have to start with.

Watch the video above or read the summary below:

Today, I’m going to answer your question about the average cost of tax lien certificate.

My name is Ted Thomas, and I’ve been doing this for about 30 years. The last 25 years, I’ve been teaching other people how to do it.

It’s a very interesting business. If you stay with it, you’ll learn how to make some really big money. If you haven’t been involved in tax lien certificates and don’t know anything about it, I’ll go through that.

This is a big money business, if you want to make it that way. Now I got in the business because I found out it was little known, but it’s really highly lucrative.

So follow along with me, and you’ll get quite an education. I’m going to share a lot of details with you.

Are tax lien certificates a good investment? As I say, it’s a lucrative business, but very few people know about it. I’ll give you a little background as we go along.

If you want to learn how to make money with small investments and grow them to a kind of retirement income, you can certainly do that with tax lien certificates.

I want you to know I have a free gift for you. Though it’s free, it’s valuable. It will teach you how to make profits with tax lien certificates and how to make big money with tax deeds. It’s my gift to you.

I’ll also tell you about two big mistakes that investors make that you want to make sure that you avoid.


What’s the average cost of tax lien certificate? Well, you can buy them for pennies, and you can grow them into some pretty big money.

Most people don’t want to buy the ones for pennies, simply because if you invest pennies, you’re going to come out with pennies on the other side.

They want to get properties and get tax lien certificates that have value, and they can really make some money.


To answer the question, “Average cost of tax lien certificate?” first I’d better give you a little foundational material so that you’ll know what you’re buying when you buy a tax lien certificate.

The process works all across the United States. Basically, it’s this, all properties have tax.

About half of the states will sell tax lien certificates when the property owner does not pay the tax so that someone else can pay the tax. They let the owner stay in the property.


The other half of the states are not quite so benevolent. They will also send out a notice that the property is in default, except they, ultimately, will not send a certificate out.

After they’ve levied the tax and tried to collect the tax, they will confiscate the property and resell it.

So there are two different systems that are in place. One is for tax liens and the other is for tax deeds.

However, what we’re doing now is we’re talking about the average cost of tax lien certificate?

Believe me, you can buy them for pennies, and you can grow them into dollars. Or you can buy them for a few thousand dollars. and grow them into retirement income.

I’m going to give you the kind of the inside scoop on all that.


Let’s face it, nobody likes to pay taxes. So people say, “How do they have tax lien certificates?”

Well, I’m going to tell you, everybody doesn’t pay. Millions of people don’t pay their property tax on time. I said, millions do not pay on time. So the local government has to do something.

What is the benefit of buying a tax lien?

In the tax lien states, they issue a certificate on that property, and anybody can buy that certificate. The certificate simply says, “This is a tax that someone didn’t pay, and if you’ll pay it, we’ll give you a generous reward.”

That means the county will give you a generous reward, and that reward could be a high interest rate.

As a matter of fact, it’s not high, it’s outrageous. It could be 16%, 18%, 24%. I’ve seen all the way up to 36% interest on a tax lien certificate.


In some instances, the homeowners just forgot to pay the tax. Some people just always pay it late. Now, if someone passes away, no one’s paying the taxes. That means they’re going to be issuing a certificate there.

There are literally dozens of reasons why people don’t pay the tax. What you care about is if they didn’t pay the tax, you can pay it and make that outrageous interest rate. Anybody can buy them.

How would you know where to buy tax lien certificates, and where would you find a tax lien properties list? Well, they’re going to be announced in the newspaper, and they’ll also be on the county website.


So you’re getting the idea. Half of the states sell tax lien certificates, and the other half of the states sell tax defaulted property.

If the purchaser of the certificate buys the certificate, they don’t have to do anything. It’s a passive investment. All you do is buy the certificate, take it home, and put it on your desk.

Many people never leave home; they just buy them online.

The treasurer controls the money. When you buy a tax certificate, you invest with the government, and you get a check back from the government.


If you’re worried about how much money these certificates are going to be, I’ll give you this foundational information and then you’ll know. Just know the certificates pay outrageous interest rates.

So follow along, and I’ll tell you about the certificates, how much they pay, and how much they cost.

For example, let’s just start out with a tax of $2,000. If the maximum rate in that county is 18%, then you could earn up to 18% on that $2,000 certificate.

Of course, every property isn’t worth $2,000. If the property is worth say $100,000, I can tell you the tax is going to be between 1% and 2%. Most property tax is between 1% and 2%.

So on a $100,000 property, the tax could be somewhere between $1,000 and $2,000. You’re getting the idea.

In that case, the highest it’s going to be is that $2,000. So let’s use that as our example. If you bought a $2,000 tax certificate, and you earned all the way up to 18%, you could earn $360.

Now $360 doesn’t sound like a lot of money, but what if you bought numerous certificates?

Or what if you put the money in the bank? For tax lien certificates vs CDs, let’s compare. The bank might pay you under 1%, but on this tax lien certificate, you’d earn 18%.

illinois tax lien certificate

Illinois tax lien certificate

Since taxes are 1% and 2% of the property value, you can pretty much figure the property value out.

On a $500,000 property, with the tax between 1% and 2%, the lowest it’s going to be is a $5,000, and the highest is $10,000.

Are the rates exactly as I’m saying? No, I’m giving you approximates to work with.

So how much do they cost? It’s going to be up to you.

Do you want to buy tax lien certificates in the country club? Then you’ll spend a little bit of money. If you want to buy them in average neighborhoods, you’re probably going to spend between $1,000 and $2,000 for a tax certificate.

However, the generous rate of return could be sky high.

I mention Florida at 18%, but over in Arizona, they pay 16%. Illinois pays 36%.


How do you know about these tax certificates? You’re going to be able to find out online about tax lien certificates for sale. You can find them there by going to the county website.

If you want to check the newspaper, you’re going to be able to do the same thing there.


When you buy, they’re going to have rules. They’re going to say, “You have to pay cash, or you have to pay it with a bank draft, or with a check.” They’ll tell you exactly how they want to do business.

If you go there and say, “Oh, I want to send you a check next week,” they’re just going to resell the certificate. They’re not going to wait for you. At the auction, they do the business, and they get it finished up.


Let’s do a couple of comparisons here to make sure that I’ve explained it correctly.

If you were buying a rural acre, and it was a piece of land worth $3,000 with the tax between 1% and 2%, how much money would you need to buy?

Well, you wouldn’t need very much money to buy that certificate, maybe 100 bucks, maybe even less. So it’s not a big investment, if you buy that.

What if you bought a property that had a $200,000 value? Well, at the low, being 1%, it would be a couple of thousand dollars. At 2%, it would be about $4,000.

So it’s not difficult to figure out how much money you would need to buy a tax certificate.


How do tax liens make money? What most people want is to make money, and that’s exactly the situation the county is in. The county wants to make money from the revenue of taxes. They want the revenue.

If you bought a tax certificate, and the people didn’t pay you, I can tell you right now, you’re going to get that property. The county is going to wipe out the mortgage, and then they’re going to award the property to you.

There are people that go and buy tax certificates in the hopes of getting the property.

I would say close to 95% to 97% of these certificates are going to pay you back. At least, that’s what the county governments tell us. 95% to 97% of the time you get your money back.

However, if you didn’t get paid on a tax certificate, now what are you going to get? You’re going to get the property.

So if you spent $1,000 or $2,000 on the property taxes, and you don’t get paid, now you going to get the property for what you spent, because the local government doesn’t want the property either.


They’re going to award the property to you, and then you’ll start paying taxes on it because you’ll own it.

You own the property without a mortgage, because the tax collector wipes out the mortgage. They just “X” it out. They just take it right off the county records.

So if you bought a property for 1% or 2%, you just made the deal of a lifetime.

Tax lien certificates don’t cost much. Actually, tax defaulted properties also don’t cost much.


What does the county want? They want the revenue from the tax money. They don’t want any more property.

The county runs on revenue. That’s how they pay the police department and the fire department.

In other words, the county is going to pay all their bills, and they try to do that as much as possible from the revenue of those property taxes. So they don’t want the property. You could end up with the property.

How does that happen? Well, it happens because the state legislature gave the authority to the treasurer to not only levy taxes and collect them, but if they can’t collect the taxes, they can confiscate the property.

When they do that, if you bought the tax lien certificate, they’re just going to award the property to you, because they don’t want it; they want the revenue.


I know on the surface this appears to be amazing. This has been going on for decades. Let me give you an example.

Here’s a perfect example. I have clients in Phoenix, Arizona. They bought a tax lien certificate for $11,000.

Before they purchased it, they did what I told them to do, go check it out and see the property.

It turns out it was a nice condominium that was built in an area where they had fountains of water and beautiful green grass. So it was in a nice neighborhood, and they paid $11,000.

The property owner never redeemed. In other words, property owner never paid the taxes. So the local government awarded them the property with no mortgage.

They got a property valued at $180,000, and they spent $11,000. All the profit was theirs when they sold it a short time later.

Let me review that. They invested $11,000. They waited for the property owner to pay, and the property owner did not pay.

When the property owner doesn’t pay, you’re going to get the property without a mortgage, which they did, and it was a $180,000 property. They ended up with $169,000 after they paid off all the brokers.

You can do the same thing. You can buy tax lien certificates for pennies, or you can buy them for whatever price you want.

I’ve seen them for $1,000, all the way up to $150,000. It’s just going to depend on the value of the property and the amount of money that you want to spend on your purchase. 


Can someone bid for you at the auction? The answer is yes.

I’ve been there while people did it many times, but you’ll have to find out what the county rules are on that.

Don’t assume that you can just call up somebody and have them do that. You need to know what the rules are.


Could you buy a tax lien certificate after the auction?

I always tell people this is a business of abundance, and rarely will they sell all the tax certificates or the tax deed properties. So what they do after the auction is they have another list.

We call it the over-the-counter list. And, yes, you can buy after the auction.

I want to remind you, there’s a free gift for you, and it’s going to teach you about tax liens and tax deeds.


This is important. You don’t want to get involved with purchasing property unless you’ve had eyes on the property and boots on the ground.

Why? Because there could have been a hurricane, a tornado, or a fire. Or who knows? It might be next to the railroad or a chicken farm. What are you going to do then? You won’t want to own that property.

So make sure that you’ve seen the property.

Another big mistake that people make, and it doesn’t matter whether you’re a new investor or an old investor, what they do is they get involved in the auction and they start bidding up, up, up, up.

You don’t want to bid on a property unless you have an exit strategy.


We hope you enjoyed Ted’s lesson on “Average Cost of Tax Lien Certificate?”

In a nutshell, the average cost of tax lien certificate is whatever you want it to be. They come in all sizes depending on the value of the property and are sold by counties at auctions to cover the amount of the back property taxes owed.

Since property tax is generally 1% to 2%, that gives you a good idea of how much unpaid revenue the county is looking to recover. A tax lien certificate could sell for $50 or $150,000, depending on the value of the property.

The interest rates paid on tax lien certificates vary by state. The tax lien certificates interest rates by state could be 16%, 18%, 24%, up to 36%, which makes it an excellent passive investment.

What you’re doing is you’re paying some else’s property taxes. The property owner is not evicted from the property, but given time to redeem.

95% to 97% of property owners redeem, and you get all your money back plus the high interest rate. If they don’t redeem, then you get the property without a mortgage.

Tax lien certificates are a safe investment because they’re secured by real estate, and they can be a very lucrative investment if you know what you’re doing.

There’s no one more qualified to teach you about investing in tax delinquent property than Ted Thomas, America’s leading authority on tax lien certificates and tax defaulted property investing.

Ted Thomas is the only one who offers full support and complete training with home study courses, Q&A webinar sessions, live tutorials, workshops & web classes, and personal one-on-one coaching.

Safe Haven 720x1024 1 1If you want to learn more, you can get started right now absolutely FREE with the Safe Haven Investor System course (valued at $197).

Safe Haven is 2 hours of streaming videos and a 100-page illustrated manual that teaches you all about tax liens and tax deeds. So act now, and get your FREE Safe Haven course today.

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Ted Thomas

Ted Thomas is America’s Leading Authority on Tax Lien Certificates and Tax Deed Auctions, as well as a publisher and author of more than 30 books. His guidebooks on Real Estate have sold in four corners of the world. He has been teaching people just like you for over 30 years how to buy houses in good neighborhoods for pennies on the dollar. He teaches how to create wealth with minimum risk and easy-to-learn methods.

The Ted Thomas Difference:

  • Ted is recognized as America’s Tax Lien Certificate & Tax Deed Authority and has been helping people with investing in tax defaulted properties for over 30 years.
  • Ted has built a team of certified coaches that have 70 combined years of auction experience and are available to his students by phone to guide and mentor you to avoid getting overwhelmed or worse, losing money
  • Ted has ironclad PROOF that what he is teaching you does work. With hundreds of successful students providing testimonials and a 4.9 Google rating which is unheard of in this industry.
  • Ted and his staff don’t hide behind a website; they can be reached during office hours at 321-449-9940.

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