Tax Certificate Auctions

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Purchasing Tax Lien Certificates

By Yusoff Allian

It is never a pleasant experience when a property owner loses the ability to pay their annual property taxes. However, when a property owner does becomes a delinquent taxpayer, it is up to the municipal government to collect owed property taxes. As such, the local government initiates a tax sale where a tax lien certificate, representing your unpaid taxes, can be auctioned off to the highest (or lowest) bidder.

Tax lien auctions work like this: A jurisdictional court orders a tax lien auction to sell tax lien certificates representing all the unpaid property taxes in the county. Depending upon the state, and the nature of the tax sale (it can be an auction for Tax Deed Sales or Tax Lien Certificates), you can buy a tax lien at these tax sale auctions held once a year by the taxing authority. Depending upon your operating jurisdiction, there may be several types of auction bidding. Sometimes, not all Tax Liens are sold at the auction. This could be because of either a lack of bidding or because there were no acceptable bids. In this type of scenario, the Tax Lien can be purchased over the counter at a later date.
An investor is not required to attend the auction to make a purchase. A tax lien can be bought over the web and by mail. However, it is highly recommended that tax liens be bought in person over the counter to eliminate any confusion or error.
Buying tax liens is a very well hidden real estate investing secret. Many Americans are still not aware of the profit potential of such investment. Depending on the state where you buy the tax lien you can more often than not earn 18% to 50% or more per year. And if the delinquent taxpayer does not fall through the repayment, you still have the court backing the foreclosure of the property. Therefore, buying a tax lien allows you to have either the higher yield from repayment of tax or the actual title to property at a substantial discount.

However, before you jump into this lucrative industry, it is advised that you do all the required due diligence. Contact your local tax assessor's office to find out when the next tax sale is scheduled.

Yusoff Allian is a Tax Lien Investing Expert and Consultant who works with investors who want to learn how to profit by purchasing tax lien certificates and tax deeds. He is the president of Alliax Holdings, LLC, a real estate & investment holding company. He is the author of the e-book: Tax Sale Wealth - The Essential Beginner's Guide To Profitable Tax Lien & Tax Deed Investments, available at http://www.taxsalewealth.com/sales.php