Most people assume that if they don’t pay their property taxes that the county waits until the property owner is ready to pay them. Not gonna happen. All counties need this tax base to pay for various county services that we take for granted. The various counties will wait about six to eight months after the property taxes are due and then they will package them individually, along with county fees and interest, to be sold as Tax Lien Certificates. The purchasing of Tax Certificates is open to the public, but ‘Let the buyer beware’. Not all tax certificates are investor quality items. Much of them are swamp land, vacated land with demolition liens, landlocked land, property with code enforcement liens, lots that can’t be built upon, narrow lots/land, etc. Need I go on?
Most investors do much research on choosing the right tax lien certificates. It is not just the return on their money, but also the return of their money that is key in making a nice profit or losing money. The life of a tax certificate is only 7 years. If an investor holding a tax certificate isn’t paid back by the property owner or the investor doesn’t apply for a Tax Deed on the property after the 7 year period, then his/her investment is lost. Sounds scary, but it isn’t as bad as you might think. Many investors make a very comfortable living buying tax certificates and applying for the tax deeds on the properties where the taxes remain unpaid for a certain amount of time.