Tax Lien Investing
March 19, 2009
When you invest in tax liens, the process by which you profit is very similar to the process used by banks when lending money. It comes down to simple interest. You purchase a tax lien by paying the back taxes and all other applicable fees currently owed by the property owner. This gives the county the money they need to continue with operations while offering regular citizens the opportunity to turn a quick profit and giving home owners an extended opportunity to pay their debts prior to foreclosure. It’s a win-win situation.
The interest you can charge varies from state to state and may be as little as 10% or as much as 50%. The best part is that you do not even have to impose the interest yourself. Once you purchase the lien, the county will raise the interest to the agreed amount and will collect the final sum for you. You will never have to communicate with the property owner.