| Most people have not heard of tax lien investing. Yet | | | | interest rates alone would be worth the investment. |
| there are millions of people across the country | | | | But there's more. In most cases you won't have to |
| earning safe, secure, and most importantly, high | | | | wait a whole year to earn your 15% interest. If the |
| percentage interest returns by investing in tax lien | | | | property owner pays off their taxes in one month, |
| certificates. To put it simply, investing in tax liens is | | | | you'll still earn that same 15% interest, but you'll get it |
| an easy, high profit way to invest in real estate, | | | | one months time. Freeing up your money to invest |
| without needing large sums of money to do it.So | | | | again. Lets say you take that money, and each |
| what are tax lien certificates?Each year property | | | | month invest in a tax lien certificate and get paid off |
| taxes are due on all properties. The local government | | | | right away. That's 15% interest, 12 times, giving you |
| uses the money from property taxes to pay for | | | | a final return of 180% over the period of the whole |
| various things in the community. If an owner doesn't | | | | year. Because interest rates are always calculated |
| pay their property taxes, the government still needs | | | | over the period of one year, this is what's called your |
| that money to be able to run their county | | | | effective return on investment. This is why investors |
| effectively! So what's a government to do? They | | | | love tax lien investing. In a state like Texas your |
| levy a tax lien against that property and auction it | | | | effective return on investment can be up to |
| off at a tax lien sale. An investor, YOU, will purchase | | | | 300%!Examining the alternativesHere are some |
| that tax lien with the understanding that you will earn | | | | alternative investing options that the majority of |
| a certain percentage interest rate. When the owner | | | | americans invest in. Included with them is an average |
| of the property finally pays off their taxes(plus | | | | interest rate and the degree of safety of the |
| penalty fees), the county then cuts a check to the | | | | investment.Savings account - 1% - safe |
| investor for the principle amount invested, plus any | | | | Money market - 1-2% - safe |
| interest or penalty fees accrued. The county makes | | | | CDs - 1-4% - safe(interest rate depends on length |
| out because they get the money they need to run | | | | of CD |
| things, the home owner or business makes out | | | | Stock market - average growth 11% - unsafe, |
| because they are given more time to pay off their | | | | percentages vary wildly from year to year |
| taxes, and the investor makes out because they just | | | | Tax lien certificates - 5%-300% - Safe. Government |
| earned a lot of money without really doing much at | | | | run. Enforced by state law. Fixed interest rates.The |
| all!Why should I invest in tax lien | | | | ultimate win/win situationSo what happens if the |
| certificates?SafetyTax liens are sanctioned and run | | | | owner doesn't pay off their taxes? Well in many |
| by the government. Your investment is protected by | | | | states you would initiate a foreclosure on the |
| state law and secured by actual real estate! What | | | | property. The property gets auctioned off at a tax |
| other kind of investment option provides that kind of | | | | deed sale, and as the tax lien certificate holder, you |
| backing? Take a look at it from the other end. | | | | get paid off first. But in other states the property is |
| People do NOT want to lose their homes. So odds | | | | signed over to you free and clear! That's right, your |
| are they'll pay off their taxes, thus paying you off. | | | | small investment geared to earn 15% just earned |
| And if they don't...you just may end up with a free | | | | you a free house with which you can do as you |
| property.Minimal CompetitionThe great thing about | | | | please. Live in it, rent it out, sell it, whatever you |
| tax lien investing is that, for the most part, it's a | | | | want.ConclusionSo why should you invest in tax lien |
| completly unknown investing option. Most people | | | | certificates? Because it simply doesn't make sense |
| think that stocks, bonds, mutual funds, CDs, money | | | | not to. If you'd like to learn more about the ins and |
| markets, and traditional real estate investing are the | | | | outs of tax lien certificates or specifically about tax |
| only ways to invest their money. So what you have | | | | lien auctions, more detailed information is |
| is a very small number of people "in the know" | | | | available.Gregory Nirshberg owns and operates Tax |
| making tons of money in an extremely low risk form | | | | Lien Investing Resource. A website dedicated to |
| of investing.High Return on InvestmentYour return on | | | | providing free quality information about tax lien |
| investment will vary largely depending on what state | | | | certificates and the tax lien investing process.With |
| and county you are in. But to give you a rough idea, | | | | analysis of tax lien auctions, tax deed sales, and even |
| interest rates will vary from about 5% to 25%. Now, | | | | tax lien investing tips for the newcomer. |
| given how safe and easy this is, these kind of | | | | |