Buy Tax Lien Certificates – A Multi Faceted Investment
Tax deed of covenant is a standard mode of investment for most people. Though they are trendy, yet they have only one method to give the return. If you buy tax lien certificates, you can get the return in some ways. There seems to be only one reason that people still invest in tax deeds when tax lien certificates are a way more lucrative option. It is because people are just unaware that tax lien certificates can earn through multiple channels.
The most common mode to get money out of a tax lien certificate is the condition where the lien gets redeemed. Most of the people do not get into tax problem deliberately. You shall notice that in almost every case, it is due to reasons out of their control that people are unable to pay the taxes. There is a common saying that bad times do not last forever. People get out of their financial trouble in most cases.
As soon as most of the people can sort out their financial issues, they attempt to get their lien property back. This happens in more than two-thirds of the cases. Once the original owner of the property receives enough money, he can pay back the lien amount as well as any interest and penalties accrued thereof.
The second common way to get money out of your tax lien certificates is available when the redemption period is over. All of us know that the basic concept behind tax lien certificates is that when you buy tax lien certificates, you purchase a prospective opportunity to have the title of the property transferred to yourself. There is a redemption period post which the tax certificate allows you to take control over the said property.
After the redemption period is over, the person who has purchased the tax lien certificate can move to the court of law and get the foreclosure orders passed. Once the foreclosure order is passed, the ownership of the property gets transferred to the person who bought tax lien certificates. He can now make money out of it by giving it out on a lease, or he can sell it away if he wants.
The third way is available in some states in the US. If you buy tax lien certificate, but subsequently decide against keeping it, you can easily transfer or assign the tax lien certificates to anyone you want in exchange for the appropriate amount of money.
As you can see, when you buy tax lien certificates, you purchase a much better investment vehicle as compared to a tax deed sale. We hope that next time you have to choose between the two, you shall go for tax lien certificates instead of tax deeds.