Can Buying Tax Lien Certificates Really Be Profitable
Property tax lien certificates can be a very profitable means of getting into real estate investment, so I thought I’d share some background information to explain what property tax liens are and why they offer such profitable returns. When a property owner is unable to pay their taxes for example, they can be issued with a tax lien certificate which simply provides a means to guarantee the creditor (in this case the tax collector) will receive the money they are owed.
The most common type of tax lien is a mortgage lien – this is where the lien is secured against the property on which the debtor holds a mortgage. If the debtor – in this case the property owner – is unable to repay the taxes owed against his property he risks losing his property.
Of the property liens we are considering here, there are two types – namely the general lien and the particular lien. The particular lien comes into play when an investor claims the right of access to a property in return for services or money which they invested in the particular property. Most liens can also be divided into two main groups – namely legal and federal liens (which can be enforced in a court of law) and equity liens which are valid only in courts dealing with equity.
