With back taxes land for sale, Texas is an exciting opportunity that deserves special attention, and this is why we are going to give it the attention it deserves.
If you’ve been asking “Are tax liens a good investment?” you’ll soon see how tax liens can be an amazing way to profit in spite of the struggling economy. Here, we will take a look at what could be an even better opportunity.
This week we are looking at one of the most alluring investments in America, tax deeds. In that category, we are going to look to a state where tax deeds can offer more chances for higher profit margins than are available elsewhere in the country, and that state is Texas.
To answer some of the questions that have been coming to me about tax sales in Houston, and lien sales in Houston, we are going to first look at how Texas differs from much of the rest of the country when it comes to tax liens and tax deeds. If you are looking for back taxes land for sale, Texas could be at the top of the list of places you’d want to look, depending on your investment needs.
There is actually more than one reason. Let’s look into the first reason and one definite category, the reputation for things being bigger in Texas. When we are talking about the economy, it turns out to pretty much hold true. That’s because like most of us have heard at some point, things are different in Texas.
If you’d like to get started today, you can begin now at no cost by taking advantage of Ted’s FREE Master Class. It’s only about 1 hour of streaming video and will open your eyes to the incredible opportunities available in tax delinquent real estate investment.
Texas: A Country Unto Itself
Texas is easily like a country unto itself with the 10th-largest economy in the world. The economy of Texas is the second-largest in the United States with a gross state product of $1.887 trillion.
- GDP: $ 1.887 trillion (2019)
- GDP per capita: $ 65,077 (2019)
- Labor force: 13,126,900 (January 1, 2015)
A Promising Future Buying Tax Liens in Texas
Texas has one of the most forward-looking and modern economies in the country. This state has made the transition from an economy based on oil and agriculture, to one of the most diversified economies in the nation. This is important because by making that transition, back taxes land for sale in Texas has a better chance at appreciating than in many other places in the U.S.
The Texas economy today relies largely on information technology, oil and natural gas, aerospace, defense, biomedical research, fuel processing, electric power, agriculture, and manufacturing. Additionally, a business-friendly government and low taxes is attracting businesses, entrepreneurs, and people who love a strong economy and a low cost of living.
This is resulting in a huge growth rate, and the future of Texas, in that regard, looks better than almost anywhere else in the country. Texas is the number one state in the United States in exports, and it is one of only seven states with no state personal income tax.
Back taxes land for sale in Texas is one of the best investments in the country because of all these favorable conditions. Texas grew faster than any other state in the country last year, and we can probably expect Texas to have among the highest growth rates in the country for many years to come.
Not only that, but its average age makes it several years younger than the rest of the country. This means that there are lots of people working and looking for places to rent and buy. Just these two facts make it one of the best looking places to be investing in real estate.
Beware: Texas Has Unique Laws on Tax Liens
As some of you might know, there are laws in Texas that are a bit different than most other states in the country. It is the second biggest and second most populous state in the U.S., which means there are going to be plenty of opportunities, and lots of property constantly coming up for tax sales. If you wanted to know “Can someone take your property by paying the taxes in Texas?”
Well, it’s actually not that easy.
One can pay taxes on someone else’s property for years, but if other requirements of a lawful adverse possession claim are not met, then those payments are nothing more than a gift to the owner. “A person may not acquire through adverse possession any right or title to real property dedicated to public use.” Civ. Prac.
How Can I Find Out if the Land Has Back Taxes Owing?
Check with the county treasurer, county clerk, or even the tax assessor’s online database. Since there are still some counties that do not have extensive online databases, you can always call the county’s Treasurer’s office and give them the parcel number. They will be able to look up any back taxes and tax liens for you.
Additionally, whereas in other states, we generally have to choose between tax liens and tax deeds, for Texas property tax sales, we have a little different situation. Texas is what is called a hybrid-tax deed state.
What that means is when you are looking for back taxes land for sale, Texas really needs to be studied differently. Not only do they have cultural and demographic diversity, but they have a mash-up between tax liens and tax deeds.
They sell tax deeds, which give you the deed to the property. But the owner retains the right to pay off those back taxes for between six months and two years, depending on which county we are looking at, and a few other factors that we will go into in just a bit.
If and when this happens, they regain the right of ownership over the deed but, it’s not that simple. They now owe the original amount of taxes, plus interest. Sometimes quite a bit of interest. So in the case that they redeem, then the investor stands to profit, sometimes quite a bit.
If they do not redeem the deed within the six-month to two-year period, then they lose the right to and the property stays with the deed holder.
Can Someone Take Your Property by Paying the Taxes in Texas?
First, the property owner would have to owe back taxes for a period of time, and it would be placed on a delinquent property list in the county where the property is located. Then it would go up for auction. So the owner would have to not pay those back taxes for an extended time.
How long can you go without paying your property taxes in Texas?
There is no easy answer. For one reason, it depends on which county the property is in. Usually, the property owner has six months to pay off their debt, plus interest. Some of the other variables are, whether or not the property is homesteaded or zoned as agricultural property.
When a property owner falls behind in taxes on a property, their property gets placed on a delinquent property tax list, Texas-style. What I mean by this is since Texas has 258 counties, you then have to check with each county to know what happens next.
When researching back taxes land for sale, Texas law makes it necessary for you to look up individual counties. Texas tax deed sales law states individual counties have autonomy as long as they all adhere to Texas state law. So the individual county you are looking at may have different terms than those on the list you are looking at. If you are not paying attention, you can easily slip up.
So if you were looking for a property in Livingston City, for example, you would be looking in the Polk county TX tax sale list. If you were looking to invest in property in Dallas, you would be looking in the delinquent property tax list, Dallas County, Dallas.
If you wanted to buy a tax deed for a property in Athens, you would be looking for the Henderson County TX tax sales list. In the picturesque town of Corpus Christi, if you wanted to buy a tax deed, you would be checking for the Nueces County property tax sales list. For tax deeds in the famous San Antonio area, you would need to find Bexar County Tax foreclosures.
Depending on if you were looking in general for property in Texas, without any specific city in mind, you might be able to find a delinquent tax list, Texas being the general search term. Searching for delinquent property tax lists, delinquent property taxes in Texas, and other names for basically the same thing will most likely refer you to individual counties as we have previously mentioned.
If all this sounds a bit confusing, that’s why I recommend you go to a knowledgeable source of information to learn all you need to know to reap big profits. Ted Thomas is the authority in the field of tax liens and tax deeds.
Because its a hybrid-tax deed state, it’s important to remember when investing in back taxes land for sale, Texas upholds the owner’s right to redeem. This enables the owner to pay off the back taxes up to two years after their taxes were due.
So if you are thinking that it is bad for you as an investor who wants to acquire a property, note that this also creates another opportunity. If your goal for acquiring property is to become financially secure, keep reading.
You see we often put the carriage before the horse. So you want to make money on your investment in order to have your investment grow to a point where you no longer have to work for money, but instead have your money work for you. This requires a plan, with positive backups built-in. This brings us to our next situation.
Texas Upholds the ‘Right to Redeem’ the Tax Deed
When you buy the tax deed in an attempt to own a property, you are probably looking to build a real estate portfolio. You can expect it to appreciate at a certain rate, according to the housing market’s health.
That usually goes up steadily over time and is one of the most dependable steady gainers of all investments. But, in the short to medium time frame, owning real estate may not yield the best profit margins.
That is because supply and demand, expansion or contraction of the economy, employment rates, inflation, and even interest rates all have a profound effect on housing costs.
So let’s look at some really beneficial things that can happen if the property owner redeems the deed to their property by paying off the back taxes. It rare to have virtually no downside to a good opportunity, but in back taxes land for sale, Texas may be the exception to that general rule.
So what happens when you are the deed holder, and the property owner pays off the back taxes within the redemption period? Well, that is where back taxes land for sale in Texas becomes a truly surprising boon.
You see, when they redeem the tax deed within the first year, they owe the original amount plus twenty-five percent interest. If they redeem the tax deed within the second year, they owe the original deed amount plus fifty percent interest.
The Interest Rates on Back Taxes in Texas Are High
Now I don’t know about you, but I’ve been tracking rates of return for the last few years. My portfolio has never approached a twenty-five percent interest rate of return at any time. Most of the time it has grown at less than half of that. Several times, like in the periods between 2008, and 2010, and again this year in 2020, everybody’s portfolio took a severe beating, and in too many cases, disappeared completely.
In my previous article, we looked at how the average rate of return for the stock market in general over the last few decades has averaged between seven and eleven percent, with a rough average over thirty years of ten percent.
So, the interest rates on back taxes land for sale in Texas are rather spectacular:
The redemption period varies for each property according to the type of property, the length of time we have been trustees, etc. When an owner redeems the property, he must pay the investor the amount paid at the time of sale plus 25% and any costs of sale during the first year of redemption. During the second year, the investor is entitled to the amount paid at the time of sale plus 50% and any costs of sale.
This rate of interest has attracted a lot of attention from major investment managers all over the country. Back taxes land for sale? Texas has been on their radar for some time. Think about it, in the best and worst-case scenario, you end up winning as an investor. You either end up as a property owner for much less than the property would normally cost, or you get a fantastic rate of return on your money within a year or two.
If your retirement funds have taken a beating with stocks and bonds, getting in on the back taxes land for sale in Texas could be the brightest light of the year in 2020.
If you’d like to get started today, you can begin now at no cost by taking advantage of Ted’s FREE Master Class. It’s only about 1 hour of streaming video and will open your eyes to the incredible opportunities available in tax delinquent real estate investment.
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