Tax lien investing entails investing in tax liens, that are authorized claims in opposition to a property that has unpaid property taxes. Tax lien investing is usually a profitable funding technique, as traders can earn curiosity on the unpaid taxes and probably purchase the property if the taxes stay unpaid. The perfect states for tax lien investing are these with favorable tax lien legal guidelines, reminiscent of excessive rates of interest on unpaid taxes and a brief redemption interval for property homeowners.
A few of the key elements to contemplate when evaluating tax lien states embody the rate of interest on unpaid taxes, the redemption interval, and the foreclosures course of. The rate of interest on unpaid taxes varies from state to state, and it will possibly have a big influence on the potential return on funding. The redemption interval is the period of time {that a} property proprietor has to repay the taxes and redeem their property. A shorter redemption interval advantages traders as a result of it reduces the chance that the property proprietor will redeem the property earlier than the investor can foreclose.
