The simple answer to “What’s a tax lien?” is: It’s an obligation a delinquent tax payer has to the local government (typically a county or other local municipality) to pay past due taxes on property.
These liens are offered for sale to investors, typically at a government auction. By law the local government must collect the money needed to provide local government services from each property owner.
What’s a Tax Lien and Is It Safe?
For the investor, this system provides a safe, secure and predictable investment in government issued tax lien certificates with maximum annual interest rates, set by the state government, which can be 18% or more annually.
When investing, you are making an investment secured by the real estate on which the taxes are due.
If the delinquent taxes are not paid you can get possession of the property for only the past due taxes and fees… basically for pennies on the dollar!
That means that if you bought a tax lien certificate and the property taxes are not paid, you could end up owning the property for just the back taxes and fees owed the local government.
So, what’s a tax lien? It’s considered by many to be the safest investment you can make.
What’s a Tax Lien’s Features & Benefits?
Here are some unique features about this type of investing that benefit the investor:
- They are sold in about half of all the states in the USA; the other half sell tax deeds.
- The laws and regulations regarding the sale of tax lien certificates are defined by state law, and the sales process is administered by local government.
- State laws set the maximum interest rate paid, which can be 18% annually or more, depending upon the state law.
- There are no commissions payable to brokers when buying tax lien certificates or when they are paid off (redeemed) by the delinquent tax payer… no extra fees paid to a middleman; the investor gets back all the investment and all the interest.
- About 95% of all tax lien certificates are paid off within three years of being issued.
- They are secured by real estate. That means if that tax lien certificate is not paid off you can own the property for only the cost of the unpaid property taxes and fees after a foreclosure process.
Two Approaches that Investors Take
Investors take two approaches:
- Obtain a high interest rate passive investment, where the investor gets all the original investment returned plus a high rate of interest when the lien is paid off, or
- A strategy of investing with a likelihood of not being paid off, resulting in the tax lien certificate buyer owning the property for pennies on the dollar value of the property.
Where Can You Buy a Tax Lien?
Traditionally most tax lien certificates and tax deeds sales were held at a public auction.
Today many of these government auctions of tax lien certificates and tax deeds are done online. Investors can buy from almost anywhere in the world using the internet.
So what’s a tax lien? Today it’s an investment you can make online from your home.
What’s a tax lien? In a nutshell, it’s a safe and predictable investment that pays high rates of interest and is secured by real estate. You can earn interest rates of 16%, 18%, 24%, even as high as 36%, depending on where you invest.
The wealthy and connected have been taking advantage of the high returns from this little-known investment for 200 years. It truly is one of the best-kept secrets. While most people will scratch their head and say, “What’s a tax lien?” the one-percenters know the answer to this all too well.
Tax liens are an excellent passive investment. Now that you know the answer to “What’s a tax lien?” Ted can help you get started today. Keep reading. Ted’s been doing this for a long time, and he has a free course for you.
After over 20 years of instructing others on the secrets to successfully investing in government auctioned tax lien certificates and tax deeds, Ted Thomas has presented at hundreds of wealth building seminars, held over a hundred workshops and amassed thousands of hours of recorded material that he has edited into a comprehensive learning system.
This system includes presentations from Ted Thomas and many other experts with first-hand personal experience investing in tax liens and tax deeds.
Ted wants to give you a gift. If you’d like to learn more about Tax Lien Certificate Investing, get the Safe Haven Investor Course. It’s valued at $197, but Ted’s giving it to you for FREE. Just use the promo code GIFT with this link: https://tedthomas.com/safehaven
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