Frequently Asked Questions

In about half the states in United States, when a property owner is one year delinquent on their property taxes, the county government will offer a tax lien certificate on the property as a method of collecting necessary property tax revenue.

Tax lien certificates pay fixed, secured, returns ranging from 8% to 24% interest per year depending on the state you’re investing in. Tax lien certificates are offered via live in-person auctions, live online auctions, and over the counter inventories you can purchase directly from the county without attending auctions.

Property owners are given a grace period to pay their delinquent property taxes ranging from 1 year to 4 years depending on the state, which gives properties owners ample time to pay their property taxes.

The county benefits by generating necessary property tax revenue for vital services like public schools, police departments, fire departments, hospitals, and parks and recreation departments.

The property owner benefits by receiving and additional 1 to 4 years to pay their property taxes.

The investor benefits by safely earning high, fixed, secured, interest rates. For a more comprehensive look at the power of tax lien investing, please visit our invaluable free trainings in the Free Resources section of our website.

In short since this is just an FAQ section, the pros of tax lien investing are:

• Tax lien certificates safely pay fixed, secured interest rates ranging from 8% to 24% depending on the state you’re investing in.
• Your investment is secured by the underlying real estate similar to a mortgage, and by law the tax lien certificate takes precedence over the mortgage.
• There’s no volatility in tax lien investing. Once you make your investment, you’re locked in at the fixed, secured, interest rate, just like a bank CD. Several hundred thousand tax lien certificates become available every year.

The cons can be:

• Each state that offers tax lien certificates has their own set of laws, rules, and regulations, and therefore it’s important to understand the methodologies for the states you’re investing in.
• Knowing how to conduct proper research is a necessity to assure you don’t acquire tax lien certificates on derogatory or worthless properties.
• Redemption periods (grace periods) range from 1 year to 4 years depending on the state you’re investing, so your investment can be tied up for that period of time like a bank CD. Although, that’s the idea, earn 8% to 24% interest per year for as many years in a row as possible

Each county is required by law to make their list of tax lien certificates available to the public a minimum of 30 days prior to their annual tax lien certificate sale.

Most counties publish their lists online, while others publish their lists in a local publication.

Most all counties make their lists available for free, although there are a few outliers that still charge for their list.

There are 3 main ways tax lien certificates are offered for sale: 1) Live In-Person Auction, 2) Live Online Auction, 3) Over-the-Counter inventories.

Most counties hold their tax lien certificate sales once per year, whether online or in- person.

Over the counter (OTC) inventories are the tax lien certificates that don’t sell at auction. Many counties make their OTC inventories of tax lien certificates available to the public, which means you can buy tax lien certificates directly from the county without attending auctions.

Tax lien certificates are made available to the public via public auction (in-person or online), or via over-the-counter excess inventories.

Hundreds of counties now offer their tax lien certificates online via online tax lien certificate sales and via online over the counter inventories that you can buy directly from the county online.

Important, whether acquiring tax lien certificates online or in person, proper research is an absolute necessity.

About half the states in the United States offer tax lien certificates and the other half offer some form of tax deed property.

Tax lien certificates are a first position lien on real estate due to delinquent property taxes. When we invest in a tax lien certificate, we’re acquiring the lien against the property, not the property. We have no ownership rights to the property.

Tax lien certificates pay fixed, secured, interest rates ranging from 8% to 24% interest per year.

When we a acquire a tax deed in a tax deed state, we’re acquiring the property. These properties are offered at a county tax sale via public auction. In general, the investor takes immediate ownership of the property without waiting a redemption period. Many counties also offer tax deed properties over the counter (OTC), where you can acquire properties directly from the county without attending auctions.

The short answer is “no.” All counties regardless of the state have a system for collecting delinquent property taxes, whether it’s through the tax lien certificate system or the tax deed property system.

About half the states in the United States offer tax lien certificates and about half the states offer some form of tax deed properties.

There are benefits to investing in both tax lien certificates and tax deed properties.

For a comprehensive overview of tax lien certificates vs. tax deed properties and the benefits to financial security of both investment vehicles, please review our Free 3- Module Online Accelerated Tax Lien Investing Crash Course.

The cost of a tax lien certificate is dependent on the value of the property. The amount of the tax lien certificate is equal to the amount of the delinquent property taxes, penalties and interest owed.

Property taxes account for a small fraction of the value of the property, typically between ½% and 2% of the value of the property.

There are tax lien certificates available for as little as $100 and as much as $100k+ depending on the value of the property