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How to Get Started in Investing in Tax Liens

Tax liens can be a risky form of investment, but many investors enjoy an excellent return on them. However, engaging with this form of investment isn’t an easy exercise that you can jump right into. Just like any other investment avenue, tax lien certificates require lots of preparation and research before you can start buying them. You need to make sure you know what you’re doing and the important things to pay attention to before you make your first purchase. If you’re interested in tax lien investing, read this guide to find out how to get started.


Try an Investing Course

You can, of course, learn everything on your own by researching on the internet and talking to other investors. But the faster way to learn everything you need to know is to buy a tax lien investing course, whether it’s something you attend in person or do at home. If you purchase a course, you know that everything you need to know to begin will be included. Whereas, if you decide to strike out on your own from the beginning, you might miss something important that you didn’t realize you had to know.

Decide Where to Invest

If you have decided that you want to invest in tax liens, and not tax deeds, you will have about half the states in the US in which to invest. Look for a list of the states that use tax liens, which include Florida, Texas and New York. Once you have decided which state you would like to use to begin investing, you need to become familiar with the laws and regulations governing tax liensbid on itbid on it. Using a local lawyer may help you with this task. You should then narrow down your locality even further to different counties and municipalities. Talking to realtors, the Visitors’ Bureau or Chamber of Commerce can help.

Look at Sales Listings

After you have chosen the areas in which you want to begin investing, you need to find the sales list of tax liens for sale. The first thing you should do is contact the county tax department and ask them about how to apply for the list you need. One of the standard procedures for this is sending a letter to the tax authority with a pre-paid envelope, which they will then use to send you the next tax sale list.

Bidding on Tax Liens

All the previous tasks were the easy bits, and now you come to the difficult part. You should put a lot of work into researching each listing before you bid on it. It’s essential to find out about the title of the property, as well as its value. If you buy a tax lien certificate and the homeowner doesn’t pay the money back, you want to make sure you aren’t stuck with a property that’s worth much less than you hoped.

Tax lien certificates can be an excellent form of investment, but you have to go about it carefully. Do plenty of research before you make any purchases to minimize the risks you take.

About Stephanie

Stephanie Rosen is a financial market analyst and a blogger. She writes about stock market and investment opportunities around the world. You can find her latest ideas on here. Just signup our news letter today and receive regular updates of Stephanie.