Tax Liens: Real Estate Investing for Beginners
Many people have never heard of such a thing as a tax lien. If you were to mention it to someone on the street, they would probably ask you what it is. A tax lien is a lien placed on a property when the owner does not pay their property taxes. A common way to invest into real estate, perfect for beginners, is to purchase a tax lien and get paid the interest on the lien! The investment rate depends on the state and is usually what gives the investor their profit.
- 1. Decide on a location.
There are many states who do not offer tax liens. You also want to choose a location where the property would sell easily if need be. In most cases, it is better to start off by choosing a property near where you live. If the original owner defaults, you will become the new owner of the property!
- 2. Research prospective properties.
Call the local county’s office and find out how they market their tax liens. Look at their offered tax lien properties. It is usually smarter to visit the property in person to ensure you are getting what you expected.
- 3. Register a bidding number.
Register yourself in their system as a bidder. Some tax liens require auctions while others can be bought online. If you are bidding, decide on your maximum bid beforehand.
- 4. Purchase your first tax lien!
Once you have completed these steps, you will officially be a real estate investor!
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