Top 3 Tax Lein Auction Benefits

In Blog, FAQ by TSL TeamLeave a Comment


If you win a tax lein auction, there's a whirlwind of things that you need to follow up on. Proper research is critical if you want to invest or try your hand at your local tax lein auction. Tax lien purchases are often good financial deals but may have other problems if you haven't done your homework.

When you buy properties that are being sold as the result of a tax lien has the potential to produce lucrative returns. Keep in mind however that there can be issues should you not have the right amount of research done. Many people also do not know that there can be disadvantages when it comes to buying this type of property. Because most homes are known as distressed properties, often times that could mean they suffer from poor upkeep.

Regardless of this fact however, knowing just what you are walking into when you go to bid in your first tax lein auction can mean the world. Let's begin.

Benefits of a tax lein auction

The US Government will place tax liens on properties when owners don't pay their property taxes. Once they are not paid and lapse in any potential payment arrangement, they also have the right to seize and then sell tax lien-encumbered properties to pay off back taxes.

This in essence is what drives all tax lein auction events. Homeowners who lose their homes through tax lien sales have the opportunity to pay back the amount during a redemption period. Tax liens when bought through an auction are also known as tax lien certificates.

Potential to earn

One of the advantages of buying a tax lien property is that if the property is redeemed, your money could earn a high rate of interest. In some states, tax lien certificates held during the homeowner redemption period earn 18 percent. Buying a tax lien property also means you may be able to secure a property for well under market value.

This represents a great investment opportunity, whether you have real estate experience or do not.

Potential Monetization Avenues

After the winning bid in any tax lein auction, successful bidders at a tax lien sale usually have only 24 to 72 hours to pay the full amount. Should the winning bidder lack the funds or an emergency occur where the funds are needed, there are many ways to get out should you need it.

Tax liens on choice properties are often purchased by large institutional investors who can afford to outbid smaller investors. If you haven't figured it out by now, investing in the tax lein auction process means you need your information and to educate yourself.

Get the facts


When you aren't armed with the information on tax lein properties that you need, it can be easy to fall victim to pitfalls. Use our tax sale list to get the information in the county that's closest to you. Without the right amount of research, any number of these terrific benefits could backfire.

For instance, you may be responsible for any other liens on a tax lien-encumbered property you buy. Without the right research or tax sale list, this could potentially derail any plans you have with your investment. Want to learn more? Subscribe and learn more about tax sale lists and tax auctions today.


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