Why Invest?

1. Rate of Return



In many jurisdictions, the tax lien investor can get returns of 10 to 25 percent or more. While it is possible to get lower returns because of an investor's desire to buy more liens, savvy investors also can get higher yields by investing in "penalty" jurisdictions.



2. Flexibility



Investors can choose the type of jurisdiction in which they would like to purchase a lien, the size of the lien they would like to purchase, the type of property they would like as a collateral, and the interest rate they would like to receive. Whate these investors cannot control is the time within which the property tax is paid.



3. Collateral



Not only are investors' investments secured by real estate, they also have a first position lien. That is, the lien comes before a mortgage or trust deed and any other liens on the property, other than something like a "weed" lien where the property was abandoned and the county had to mow it for sanitary purposes.



4. Time



Time involved is light to moderate. In fact, the investor may initially spend more time learning how to invest than investing itself.



5. Liquidty



Unfortunately, a tax lien certificate is illiquid and investors cannot expect to receive their principal and interest until the full redemption period has expired which can be as much as 2 years. However, if an investor buys multiple liens at multiple times, the redemption periods can be coordinated. In addition, many liens are transferable and can be sold to another interested party.

6. Stability

The tax lien certificate does not flunctuate in value. The interest rate is fixed. In penalty jurisdictions, the interest is actually is a penalty which means that the yield will increase if the owner pays off hte lien faster.

7. Commissions

Unlike other investment opportunities, tax investing does not involve a broker and thus no commission to be paid.

8. Government

This type of investment is administered by the government.

9. Enforcement

The statutory remedies almost never require any kind of formal legal action but usually just involve legal notices and county-assisted procedures.