Buying and Selling at Auctions 

 

Tax Lien Investing-A Safe, Low-risk Opportunity For Prosperity

Tax Lien Investing-A Safe, Low-risk Opportunity For Prosperity

 

In a society built on consumerism, we hear the word "guarantee" almost ad nauseum. But most of us know by now that any "guarantee" comes with a couple pages of fine print or some clever loophole rendering it to all intents and purposes utterly worthless to us. But in the world of tax lien investing, a guarantee has real merit. The government regulates these auctions, and they are essentially borrowing money from you to cover what someone else failed to pay. And as we all know, the IRS takes its money very seriously. They depend on investors like you and they want you to keep investing, so their guarantee stands on a solid, legal basis. When you purchase a tax lien, you are assured of receiving compensation in some from-either in monetary form or in the form of real estate that becomes your legal possession to sell, rent, demolish, build on, or whatever your heart desires.

This goes beyond the word "guarantee" stamped onto a piece of paper. This is a guarantee regulated by two distinct IRS sections, section 6321 and 6322, which describe the legalities of this security to the fullest extent of the law. The law is on your side as an investor-making tax liens a singularly safe investment.

Too Good to be True?

The only gamble you have to take as a tax lien investor is on the length of time the owner is granted to either pay the taxes or relinquish the property. Redemption periods vary from state to state, ranging anywhere between 6 months and 3 years. The majority of owners ultimately do pay their back taxes at the end of the redemption period, but some fail to do so, in which case you become the property owner. At present there is about a 2% chance of acquiring property through tax lien bids. This percentage is likely to increase, though, if the

current downward trend in the economy continues.

Tax liens are a peerless investment in terms of security. Businesses close, the stock market plunges, but tax liens are a consistent win-win situation. On the one hand, you invest are then reimbursed for your initial investment and also earn interest and accrued fees. On the other hand, you acquire property at very low cost and then turn around and sell or lease it. Consider this: the average rent for a home falls between $850-$2000. That's a pretty sizeable income. Imagine if after a few months you took this rent money and then used it to buy two or three more tax liens. A couple of wise investments could mean the end of the nine-to-five for you. Many of these properties, while not luxury mansions, are high-quality homes available to you at a safe, secure investment.

In most cases, a guarantee does not equate the safety of your investment. Your money can still be lost. This, however, is not the theme of investing in a tax lien.

Brent Crouch is the owner of TaxLienProperties.net. He has dedicated this site to providing tax lien articles and purchasing real estate at pennies on the dollar. http://www.taxlienproperties.net/articles/articles.htm

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