Why Invest
The current housing market will provide the optimal setting for tax lien investments. This market makes tax liens even more lucrative for a few reasons:
- Because there is less equity in peoples’ homes for them to pull out for investment opportunities, there are fewer individuals with capital available to purchase tax lien certificates, so there is less competition now than in the past.
- The majority of sub-prime loans given out in the past several years did not have escrow accounts set up to pay for increasing property taxes. This means that more properties are behind on property taxes in this market than previously.
- 3. Mortgage lenders have been securitizing many loans, selling off pieces of the debts to many different investors. Because of this, mortgage lenders are having a hard time proving who really owns the note, and will generally not get notice of the liens, preventing them from redeeming the debt.
- 4. Tax liens are not subject to the up and down trends of the stock market and interest rates. Tax lien interest rates are mandated by each state, so the return on investment is stable and backed by real estate.