Learn everything you need to know about how to buy tax lien certificates in Maryland from Ted Thomas, America’s Leading Authority on Tax Lien Certificates and Tax Defaulted Property Investing.
Buying tax lien certificates is different for every state. Are you wondering how it works in Maryland?
I’m Ted Thomas, and today I’m going to answer your question about “How to buy tax lien certificates in Maryland.”
I’m also going to discuss some ways to make money with these tax lien certificates, and then I’ll finish by telling you a few things to avoid to make sure you don’t make newcomer mistakes at those tax defaulted auctions.
Today I have a gift for you, something easy, a fast-start course. It’s about an hour long, and it teaches you about tax lien certificates and tax deeds. It’s absolutely free and will give you a great head start!
RULES MAY VARY
So let’s talk about how to buy tax lien certificates in Maryland.
Here are a few facts.
Now, you know it’s a small state, but they have 24 counties, and the rates are all over the map there.
What you have to understand about Maryland is that, as in every state, the counties make their own rules. So, if you don’t read the county rules, you’re going to be challenged by this.
They can pay all the way up to 24% in the state of Maryland. However, the county is going to decide what the rate in that particular county is.
If you’re buying a tax lien certificate in some of the largest counties, like Montgomery County or Prince George’s County, sit down and find out what the rate in that county is.
It could be 12% in one county and 24% right next door, which might only be 3 miles down the road.
So, you don’t want to just start buying tax lien certificates without knowing what you’re doing.
ABOUT TAX LIEN CERTIFICATES
Let’s talk more about these certificates. They’re sold in half of the counties across the United States.
The lowest I’ve ever seen is a 12% rate; the highest I’ve ever seen is a 39% rate. In Maryland, it’s all over the map, so you need to go to the county rules prior to doing anything at a tax auction.
When you buy a tax lien certificate, you do not get possession of the property.
What is the county trying to do here? They’re trying to force people to pay taxes. When those people don’t pay their taxes on time, they charge them very high fees.
You could find a 12% fee or 18%, or you could find up to 24%.
I don’t know which county you’re going to go to, but I can tell you, if you haven’t read the rules, you’re going to miss out. So you want to make sure you’ve done that.
PROPERTY TAXES
Before I go further into how to buy tax lien certificates in Maryland, let’s talk about why the counties sell them.
The local government wants to sell those certificates because they need the money.
What are they going to do with that money? They’re going to do a lot of things with it. Pay the police department and the fire department. They’re going to pay for the schools. All those bills have to be paid.
If a property owner does not pay, the county will put that property into default. Once it’s in the default situation, they’re going to start racking up some pretty high rates, all the way up to 24%.
If the property owner defaults completely, and they don’t pay after you bought the certificate, you’re going to end up with the property.
INTEREST RATES
I’m going to repeat some of this to make sure that we nail it down.
First of all, Maryland has 24 different counties. The fees can be a very low 12%, but they can be all the way up to 24%.
What are those fees? They’re basically late fees. When the people don’t pay the bill, they’re going to have a late fee.
When you buy the tax certificate, the longer it stays out, the more money you’re going to earn. So, you’d love to have a tax certificate that stayed outstanding for a whole year, and you earned all the way up to 24%.
I don’t know which county you’ll pick. You can pick Arundel County or Prince George’s or whatever you prefer, but you’re going to find out that the rates are different in each one of them.
FINDING A LIST
The county will publish that information on the county website. They will also publish that more than likely in local newspaper.
That way you’ll know some of the rules, and you’ll know all of the properties that are going to have tax lien certificates available.
You are not buying a property in Maryland. What you’re buying is a tax lien certificate.
AUCTIONS
Another thing to know about how to buy tax lien certificates in Maryland is that the rules are different at every auction.
At some auctions, they’ll have you bidding up on the property value. Other auctions will have you bidding on the interest rate. You need to understand that information before you jump into the sale.
The property is going to be listed on a county website, so you can find out any information you want about the property. Is it 3 bedrooms? Is it 2 bedrooms? Does it have a value of $400,000? Is it $800,000?
All of that information is available to you on the county website. None of this information is hidden.
The only thing that’s unusual is that each county will have a different rate, so if you don’t know what that rate is then you won’t know how much money you’re going to make on the certificate.
RATE OF REDEMPTION
If you buy a certificate, most of the property owners will come in and pay their tax.
95%, maybe even 97%, of the time the people will come in and pay the tax.
When they pay the tax, they have to pay whatever the late fees are, 10%, 12%, whatever they are. So, you make money that way.
If the people do not come in and pay, then you’re going to end up with the property.
HOW MANY CERTIFICATES AVAILABLE?
If you’d like to know how many certificates are available, each county will more than likely print a list of all the certificates in local newspaper. If they don’t print it in the local paper, you’ll find it on their website.
If there is a question about that, you can always call the county and say, “Can I download all the certificates that are available?”
So, there are multiple places to find out, but usually it’s a little local newspaper.
ASSESSING PROPERTY VALUE
You can look up all the certificates online. There are a number of ways to find out what the current value of the property is.
You can go onto the county website, look up the property, and every property will have a tax assessed value.
You could also go to the multiple listing service if you know a broker, or you could go to Zillow, which is a public company.
You could go and drive down the street to find “for sale” signs. There are a lot of ways.
If nothing else, you can knock on doors on that street to find out what the value of the property is.
MISTAKES TO AVOID
I want to explain two big mistakes that people make at auctions that I don’t want you to make too.
Don’t bid on any property that you haven’t looked at. Why? Because there could have been a hurricane, or a flood, or a fire. It’s amazing how often this happens.
So, don’t buy a property you haven’t looked at because when you pay the county, you can’t expect them to give you any money back if you’re upset with it.
If you’re upset because you didn’t look at the property first, they’re going to say, “It’s right in the rules; look at the property.”
Also, make sure you have an exit strategy before you bid. If you don’t know how you’re getting out, then don’t bid and get in.
You’ve got to know how much you can sell the property for in order to know how much to pay for the property if you’re going to make some money. We’re in the business of making money here.
CONCLUSION
We hope you enjoyed Ted’s lesson today.
If you want to know how to buy tax lien certificates in Maryland, it’s important to know the rules of the county.
Maryland has 24 counties, but the rules and interest rates can vary significantly. One country could pay a rate of 12%, while the county right next door could pay 24%.
You can find tax lien certificates listed in the local newspapers and on the county websites.
You can also look up the certificates online to find the assessed value of the property. Additionally, Zillow is a very helpful resource for assessing property values.
It’s important to assess the property because if the tax lien is not paid, then you will end up owning the property.
However, 95% to 97% of the time the tax lien is paid, and you get all of your money back plus the interest, which is what makes tax lien certificates such an excellent passive investment.
As long as you know the rules and do your homework on how to buy tax lien certificates in Maryland, you can make lucrative profits, and there’s no one better to teach you than Ted Thomas.
For over 25 years, Ted’s been teaching students how to do this successfully.
Ted Thomas offers full support and a complete training with home study courses, Q&A sessions, live tutorials, workshops & web classes, and personal coaching.
If you want to learn more about how to make money from tax lien and tax deed investing, you can get started today with Ted’s FREE Master Class. It costs you nothing, so why wait when you can change your life today?
Follow us on:
