What are Tax Liens Certificates?
Tax liens offer an alternative way of investing in real estate Investors in tax lien certificates are attracted to the high interest rate of return on their investment. One of the biggest risks of buying a tax lien certificate involves purchasing a tax lien where other creditor claims are superior to the position of your tax lien. • Liquidity • Tax lien certificates aren’t a liquid investment. When you purchase a tax lien certificate, your money is tied up until the property holder pays all back property taxes, plus interest and penalties. Auctions • Each county has its own bidding process for tax lien certificates. In counties where rotational or random bidding is used, investors may miss the opportunity to bid on tax lien certificates they’ve targeted. Travel Expenses • If you’re bidding on tax lien certificates outside of your county, you may incur travel expenses such as food and lodging. Travel expenses will be much higher if you’re flying or driving long distances to buy tax lien
