Make Money With Delinquent-Taxes

Delinquent-Taxes could cause abandonment of property by owner and opens up opportunities for investors. Now you can get in on the action! It often happens that someone else's misfortune can build your fortune.

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Delinquent-taxes place the government in a forced position to collect. So how do homeowners become delinquent? For reasons, ranging from the high cost of upkeep, to unexpected economic difficulties, or to simple disenchantment with an investment, every city or State has land on its hands that has years of unpaid taxes on it. The sooner the governmental unit can sell it,the happier it is, regardless of how low the bid is relative to the worth of the property, as long as the bid covers the delinquent-taxes.

If delinquent-taxes are not paid some counties add a twist to the back tax problem. If a person is late in paying their taxes, the County sells a "delinquent-tax bill" to another individual. The property owner must redeem these tax bills through the County and pay interest, which goes to the tax bill holder. Thus, the County gets its delinquent-taxes money when the tax is due, from the tax bill holder, and the tax bill holder gets his money back from the late taxpayer, with interest.

After a period of time (which varies in different States), if delinquent-taxes have not been paid by the property owner, the tax bill holder can take over the property.. Looking over city or county tax rolls or looking for abandoned buildings can clue you in on some of these properties.

Delinquent-taxes for properties are regularly sold in auctions held by the city or county. Contact the treasurer of the city or county in which you are interested. Legal notices of such auctions must be listed in local newspapers; for example, New York City auctions of forfeited properties up for are listed in the Wall St Journal and the New York Times.

Auction rules are simple, but bidding is quick, so be prepared. Know which properties you want to bid on (after you've already visited them and walked through them, of course) How much you think the property is worth, and have some idea of what you plan to eventually sell it for, so don't get carried away and bid more than you have previously decided to.

If you're thinking of attending an auction, have your financing lined up ahead of time, so that if you actually buy a property, you know how you are going to pay for it, and of course you will have to come up with a deposit in cash or certified check on the auction day, the percentage varying according to the auction practice in your city.

And even if you have your own money, use as little as possible--borrow as much as you can. Borrowing is much more profitable; and not very difficult on real property, especially rental properties with rent rolls as "security" to the lender.

Investigate how your local government units dispose of properties seized for non-payment of taxes. You may find some great bargains can be picked up in your back yard! Now that we are in the days of the world wide web we can receive information much faster.

Discover many more facts about delinquent taxes and how to profit from them as an investor.Real Estate Investing For Dummies

You might want to obtain additional information from easy to find books as "Real Estate Investing For Dummies" by Eric Tyson & Robert S. Griswold, published by Wiley.

In chapter 3 it is stated:

"Tax lien certificates can be a good investment regardless of the economic cycle, because some property owners will always be unable to pay their property taxes. When you buy a real estate tax lien, you're simply providing the government entity with the funds for the delinquent-taxes and buying the rights to collect those taxes from the property owner, plus penalties and a fixed rate of interest that can range from 12 to 14 percent per annum."

"The property owner can't sell or pledge her real estate without paying the outstanding tax liens, so over 90 percent of the tax lien certificates are redeemed within 24 months (or the maximum allowable redemption period set by each state or county}. Look for tax lien certificates in certain types of real estate, such as owner-occupied properties, because these tend to have nearly 100 percent redemption rate."