Tax Liens: The Basics
The tax lien investing industry is booming. Tax lien investing is a strategy that can help you build wealth. It’s tax-free and the return on investment is usually high! You might be wondering, “What are tax liens?” Tax liens are filed by property owners who owe taxes to their government. When they fail to pay up, the tax lien provides a way for governments to collect on these debts. There are tax liens for both residential and commercial properties. If you’re interested in tax lien investing, keep reading this blog post!
Tax-Free Interest Rates
You can earn tax-free interest rates and build your wealth with tax liens, but before you invest in them, be sure to understand the risks and benefits. Tax liens are often high risk investments because they require a lot of research and due diligence on behalf of the investor.
Here are the tax lien investing basics that you need to know. First, tax liens can be used as an income stream for building wealth and passive income. Second, tax liens are secured loans against property (real estate). Third, tax lien investments offer a safe way of generating money through collecting interest on these notes or deeds of trust before they become delinquent after two years.
Tax liens are a form of tax relief that allow taxpayers to buy tax lien certificates from the county. These certificates have been issued by the government in order to get back taxes owed on property or other assets. In other words, tax lien certificate holders have first rights to collect these taxes, before any other creditor can take possession of them. Tax Lien Investing is an income stream that has been shown to be a great way for people looking for ways to build wealth over time and it’s easy!
The Reality of Investing in Tax Liens and Property Deeds
There are many tax liens out there and they can be a great investment opportunity for an investor who has the time and resources to find tax liens, buy them at tax sale, and wait for property deeds to come due. There’s no need to hire a tax attorney or spend hours researching tax lien information online when you have this guide!
IRS TAX LIENS
IRS tax liens are not filed for failure to pay property tax; they are usually imposed against homeowners who have not paid federal taxes for a few years. When a lien is attached to a property, the homeowner cannot sell, refinance, or get a line of credit until the obligation is satisfied and the lien is cleared.
PROPERTY TAX LIENS
Property tax liens can accrue penalties and interest. When the liens go unpaid, the revenue collection agency, usually at the county level, will issue a certificate that includes all the taxes and associated fees due. In the interest of making the most out of their tax collection efforts, agencies routinely offer these lien certificates at public auctions traditionally held “at the courthouse steps,” but more often in a courthouse lobby or conference room. Depending on the jurisdiction, these events may be called “sheriff’s sales,” and they may be held online instead of at a physical location.
TAX COLLECTION AGENCIES
Tax collection agencies only care about obtaining the past due amounts along with fees and penalties; they are not concerned about the assessed or market value of the properties as such, but they do realize that they have a chance to make additional profits at auctions. These lien certificate auction sales are legitimate and overseen by court officers and sheriff’s deputies. Once a certificate is sold to the highest bidder, the tax collection agency will be able to foreclose on the property and legally transfer the deed.
According to figures compiled by the NTLA, unpaid property taxes totaled $14 billion in 2017, so prospective investors can count on being able to tap into this market. It should be noted that only 30 states handle lien certificate auctions.
Finding Tax Liens Worth Investing In
Now that you know the difference between seminar scams and the real tax default property market, the next step is to start gathering the tools that can help you make the most out of your investing activity. You can learn more from our free and informative workshops. Join us: https://www.tlwbevents.com/workshop