Tips for buying a tax lien certificate are checking out the property beforehand and understanding the auction and purchasing process, explains the Tax Lien Certificate School. Investors should stay away from dilapidated properties or properties that have suffered environmental damage, according to Investopedia.Continue Reading
Investors should familiarize themselves with the property before the auction to ascertain that it is a profitable investment, reports the Tax Lien Certificate School. Though these properties are often cheaper, there are situations where property owners allow their property to be auctioned to purposely evade taxes for unusable parcels.
The investor should inspect the property to ensure it is in good shape and in a good location, according to the Tax Lien Certificate School. This ensures that the property is usable and resalable, thus guaranteeing profits for the investor. Investors should stay away from properties that have suffered environmental damage, particularly if hazardous or chemical materials caused the damage, reports Investopedia.
Investors should understand the purchasing process of tax lien certificates in their state county or state, explains the Tax Lien Certificate School. Different states have different laws, and the investor should understand that he does not own the property simply because he purchased the tax lien certificate.
The investor should understand his responsibilities after purchasing the tax lien, states Investopedia. He should notify the property owner in writing within a specified period that he has purchased the tax lien and at the end of the redemption period if the property owner does not pay the amount.Learn more about Investing