Keep This In Mind Before You Bid For Tax Sale Properties
Just like any mode of investment, it is recommended that you should be cautious when you invest your hard earned money in tax sale properties. The difference that caution makes is the one between having a high return on investment and losing all that you had directed to tax sale properties.
You should know that tax sale property is not transferred to the person who purchases a tax lien certificate. A tax lien certificate is a mutation of the tax amount in the form of a loan where the property can be considered a mortgage. You do not get any immediate right in the park. The actual owner of the property gets time to get a lien release on his property by repaying the loan in this period and take back his property.
Secondly, it is recommended that you only do a lien search on those properties which have some market value. A lot of people make a very obvious mistake. They buy tax lien certificates for those properties which have little or no market value. The result is that the actual owner does not redeem the voucher and it is passed to the certificate holder.
Because the property has little or no commercial value, the money which was spent in the purchase of tax lien certificates gets stuck in the park. The certificate holder cannot make any money out of the property, and his investment becomes a waste of money.
The third thing is to check if the proper tax rates have been applied to the property or not. In some cases, the tax authorities are known to overtax any property. The result is that the person who purchases these property tax relief certificates has to pay much more than what is due. If you are aware of the actual property tax records of the property, you can be sure that you do not buy over expensive property tax certificates.
The fourth important thing to check before you bid for tax sale properties are any special payment provisions. In some cases, the payment provisions tend to differ. Some auctions may accept only cash while some auctions also accept cashier’s check along with money. If you are aware of the acceptable mode of payment, you can easily carry the test or enough greenbacks to make the payments.
Finally, you should also confirm that the property has not been subject to multiple lines. Although a rare scenario there are some instances when more than one lien was slapped on a farm. Here the matters get very complicated and are dragged to courts. Check that the property is not subject to multiple lines.
Tax sale properties can also be a significant investment of real estate broker who can use the features to improve his portfolio provided that he considers all the things mention