The Pros and Cons of Tax Lien Investing

Investing in tax lien is one of the best choices any American citizen can take nowadays. Investors from across the country praise and criticize this lucrative investment because of its high returns.

In order for you to be ahead of the competition, here are some pros and cons commonly associated with this type of investment:

Pros

• Offer high returns of investment with as low as 18% and as high as 36% interest rate depending on the state.
• The tax lien certificates of the properties that exceed the redemption period, and was not redeemed by the delinquent homeowner would be foreclosed by the government, and awarded to you as the investor.
• Tax lien investing is government guaranteed.

Cons

• Tax lien properties located in a hazardous area, environmental issues, or noisy neighbors are not beneficial to your investment plans.
• If the homeowner redeems the lien, you cannot own the property anymore.
• Earnings may turn into a financial loss if you invest in not properly researched tax lien properties.

Now that you know the pros and cons of tax lien investing, you’re going to have confidence in dealing with the process as well as enjoy your earnings.