Which is the better investment: tax lien certificate or tax deed sale?

It has been said that investing in stock and shares, money market and jewelries, specially gold and diamond are good investment as their values continue to rise. But one undeniable fact is that the real estate business seems to outpace all present investment portfolios. One obvious reason is the ever growing global population that people tend to focus more and more on better living conditions over and above anything this world can offer.

As such we are giving a list of US States that engage in selling Lien Certificates and Tax deeds for millions of prospective investors worldwide.

• Maryland, Mississippi, Missouri, Montana, Nebraska, New Jersey, New York, Nevada, South Carolina, Vermont, Washington D.C., West Virginia and Wyoming.

But first, in a nutshell, let us distinguish Tax Lien Certificates from Tax Deeds to give would-be buyers/investors a general idea, as nobody but themselves will decide later on, which one best fit their desires and needs.

HERE’S HOW IT WORKS : A. For Tax Lien Properties

• Every county or city in the United States has to collect property taxes otherwise, if a county cannot collect property taxes it will go broke. To be sure this doesn’t happen, in tax lien states the county places a lien on any property with delinquent property taxes and sells the debt to investors. You, the investor, are essentially loaning money to the county. This creates a win-win situation for everyone. The county gets its property tax money, property owners get extra time to pay their overdue taxes, and investors get a low-risk, high return investment.

HOW HIGH IS THE POTENTIAL RATE OF RETURN ON TAX LIEN CERTIFICATES?

• Arizona: tax liens can pay an annual return of 16%.
• Illinois: tax liens can yield 18% over 6 months – that’s 36% per year
• Indiana: tax liens pay out a flat fee of 10% for the first 6 months or 15% for the second 6 months.
• Florida: tax liens can pay 18% per year. On an annualized basis, your return can be an impressive 60%.
• Iowa: tax lien certificates can pay an annual return of 24%.

What makes tax lien certificate investing Safe is that the sales are governed by state law and conducted by the tax collecting jurisdiction (typically the county, sometimes the municipality), and your investment is backed by real estate. This simply means that If the property owner pays his/her taxes plus interest due to the county within the time allowed following the tax lien sale (the “redemption” period), then the county receives its property taxes and you receive your money back plus interest.

1. For Tax Deed Sales

Here is a list of U.S. states and Canadian provinces that have tax deed sales: Alaska, Alberta, Arizona, Arkansas, British Columbia, California, Connecticut, Delaware, Florida, Hawaii, Georgia, Idaho, Kansas, Louisiana, Maine, Manitoba, Michigan, Minnesota, Nevada, New Brunswick, Newfoundland, New Hampshire, New Mexico, New York, North Carolina, North Dakota, Nova Scotia, Ohio, Oklahoma, Ontario, Pennsylvania, Prince Edward Island, Quebec, Rhode Island, Saskatchewan, Tennessee, Texas, Utah, Virginia, Wisconsin and Washington.

• Instead of placing a lien on a property with delinquent taxes, counties in some states foreclose on the property and sell it for literally only the taxes owed. You can buy properties at tax deed sales for 50%, 75%, or more than 90% below market value. And here is a little known secret. In states like Texas, Georgia, Delaware and Rhode Island, tax deeds carry a right of redemption bearing an interest rate penalty that can be as high as 25%. This means you get the full interest rate even if the tax deed is redeemed right after the sale, giving you annual returns as high as 300% per year.
• When you study the facts, investing in tax liens and tax deeds is one of the safest and quickest ways to achieve wealth and financial independence. Even financial institutions have found tax sale investing to be lucrative.