There are several options open to those with an interest in investing in tax delinquent properties. Among these options are the right to purchase the outstanding property taxes in exchange for a tax lien, the right to collect a high interest rate on the outstanding taxes of anywhere from 12% to 24%, the right to foreclose on the property if the owner does not pay off the lien and interest in a reasonable amount of time, and the right to sell the property at public auction.Investing in tax delinquent property is almost always a winning situation for the purchaser of the tax lien. No matter which of the scenarios we have outlined above, the investor stands to walk away with a good profit on his or her investment. This profit is realized either when the property owner pays back the investor with interest or when the investor is forced to foreclose and sell the property.When you initially purchase tax delinquent property, you are not really buying the property. Instead, you purchase a tax lien certificate. This certificate attests to the fact that you have paid the taxes on the property and that the homeowner owes you the total tax cost, plus interest. In the event that the owner fails to pay you your investment plus interest, you may then foreclose and sell the property at public auction. Whatever money you make above your tax lien investment and foreclosure costs, is your profit.Let’s say that you bought a $10,000 tax lien certificate and the homeowner did not pay you the money plus interest by the end of one year. You then foreclose on the property and sell it at auction for $100,000. The foreclosure and associated fees cost you another $10,000 until all is said and done. You walk away with a profit of $90,000 on the sale and subtract your initial investment of $10,000 for the tax lien certificate. Your profit, overall, on this property would be $80,000.Very few property investments can be made in this day and age that almost guarantee a profit. In the event that the homeowner is able to make repayment, you have realized a profit of 12% to 24% on your investment. In the event that the homeowner does not repay you within a reasonable amount of time (generally, no more than one year) you can sell the property and make a profit of whatever you get above the unpaid taxes you purchased at the tax lien certificate, less foreclosure costs like the example above.The profit potential of foreclosing and selling the property is astounding because you, basically, acquired it for whatever was owed in property taxes when you purchased the tax lien certificate.
In theory, real estate and investment cannot be separated. When it comes to investment properties, it is not hard for an investor to notice real estate pieces that could provide a lot of earnings. Investing, on the other hand, is in itself a marketing world where benefits and risks are present at stage. But in reality, there is risk in all you do, so do your due diligence and get proper guidance from people who are doing successfully what you want to be doing.As you walk through the path of investing, you have to learn how to secure great profits with not much risk taking and this requires you knowing your numbers and the values of the surroundings properties that you are considering. With real estate investing, the income you could potentially make over time can be large. No wonder a lot of investors are opting for it.The only way to invest with low risk is to get the right training and to know your numbers. This will also help you to avoid the many scams that are designed to make a quick buck off of your ignorance in real-estate. However, with the right education, you won’t fall victim to these schemes and will see them a mile away.The same goes with the investment market. You have to learn about the anatomy of the real estate and investment market. Whereas, when you start with investment properties, you can stick with safer options of mortgage, leasing and rental. As time goes on, the generation of gains may surpass the original value of your purchased land or property. Sky high rents and prices of different commercial units as well as other localities may give proof to the fact that much more may be anticipated to come. but commercial real estate is a different animal and requires separate training!In just a few years, the value of each property can increase exponentially or actually lose value, depending on the homework you did before acquiring the investment. Rental property cash flow is as excessive as the blood flowing in your veins! If you are wise enough to know and understand the ups and downs of what you are in to, there simply is no stopping of the profits you can gain if done correctly and with the right guidance. Experienced investors know very well the art of holding a land, and the learning the crucial skill of quickly finding qualified renters can result in successful property investment.Bear in mind that investing in real estate is not only about purchasing a land or house and then selling it but it is about being skilled at it just like learning anatomy for medicine. You really need to stay on top of the changes that are taking place in tactics that you can use and the way tax is handled because you don’t want to mess with the IRS!It is crucial for you to know that when it comes to real estate investment, you should aim to run for market capital gains. While the basics for investing in real estate are almost the same with that of other investment forms, you should still develop a strategy that will let you manage your money and assets. Keep in mind that you will be investing money by purchasing an asset that is held for quite some time and then cash out for profits or you may buy and flip short term, it really depends on the person and what your goals are. I’ve prepared some powerful investment tips for you below, enjoy!