I always remind our students that property taxes are very important; the revenue collected from them provides countless services to communities across the nation. Property taxes not only help pay for city needs on a large scale, such as improving education and building police and fire stations, but on a small and personal scale as well, like providing emergency care for an elderly citizen. People’s lives are touched daily by the beneficial public services that property taxes fund.
When property taxes are not paid, the funds that help create a strong and vibrant community are restricted. This is clearly detrimental, so counties make up for the lost revenue through tax liens and tax deeds. This can replenish funding, reduce blight, and can help provide a home to a responsible member of the community.
This may come as a surprise, but not all tax liens and tax deeds are purchased by private investors. In fact, in many counties it is the right for non-profit organizations to have first pickings of tax lien or tax deed properties. The desired properties are removed from the sale list and are approved for use by the city in ways that will benefit the community.
One such organization that uses this method to acquire property is Habitat for Humanity. Often this non-profit organization will acquire not only homes, but vacant lots as well. They build eco friendly homes on the vacant lots, sell the home to a productive member of the community, and sometimes provide a 30-year loan with no interest to those in need. The new owner is responsible for the taxes, utilities and upkeep of the home and property.
This is a system that is beneficial for everyone involved. The city gains a new taxpayer, vacant lands or homes do not damage the neighborhoods market value, and someone’s standard of living is drastically improved.
Investing in tax liens and tax deeds is a transparent method of investing. You know where your money is going 100% of the time; this level of knowledge helps to boost confidence….which is one of the first steps to becoming successful.