A tax lien certificate sale is a sale of a property’s unpaid tax debt to an investor. The investor then becomes responsible for collecting the debt, with interest, from the property owner.
How do tax sales work in the United States?
Tax lien certificate sales are used by local governments to collect unpaid taxes from property owners. The government sells the right to collect the unpaid taxes, plus interest and penalties, to investors. The investor then pays the government the amount of the unpaid taxes.
Benefits of tax lien certificate sales:
Tax lien certificate sales offer investors the opportunity to earn a return on their investment while helping local governments collect unpaid taxes.
Disadvantages of tax lien certificate sales
There are some risks associated with investing in tax lien certificates, including the possibility that the property owner may never pay the debt, or that the value of the property may not be enough to cover the amount owed.
Differences between tax lien certificate sales
Risks of tax lien certificate sales: There is a risk that the property owner may never pay the unpaid taxes, in which case the investor would not receive a return on their investment.
Differences between tax lien certificate sales and tax deed sales:
Tax lien certificate sales involve the sale of a property’s unpaid tax debt, while tax deed sales involve the sale of the property itself.
8 to 50% Return on Investment
Investors can buy a tax lien certificate to earn an 8-50% interest rate, or they may bid on deeds. Deeds represent actual ownership in the property and do not include any bonuses like those found with stocks; rather investors receive everything remaining after taxes are paid by purchasing these documents at only penalties plus interests owed – sometimes even below market value!
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