Why Tax Lien Investors Love Texas
Many people have been writing into the blog asking about how to get started investing in tax liens. One of the first things that you will need to do is to get familiar with your location options for investing. While it would be nice if you could just invest in your own hometown, that may not always be the best option for you. Not every local area has tax lien auctions, and even those that do may not have the right properties for your investing strategy.
If you find that you need to look further afield for your tax liens, then you should evaluate the areas in which you decide to invest based on how advantageous their tax lien procedures and regulations will be to you. For example, there are some really big advantages to bidding on tax deeds in Texas:
- Texas has tax deed sales each month
Many states only have them a few times a year, or wait until they have a certain number of liens in default before having an auction. - Texas charges a 25% penalty instead of interest.
This means that it is not interest that is bid down, and that it is assessed on everything: premium and costs associated with administration. - Texas has a short redemption period.
Unless the property in question has an agricultural or homestead exemption, the property owner has only 6 months to redeem the lien before you can start the foreclosure process.
As you can see, a state with regulations like those in Texas is ideally suited for tax lien investors whether they hope to simply redeem the lien or take over the property. In the coming weeks, we will talk more about other states that are ideally and not-so-ideally suited for tax lien investing.
Where is your favorite place to invest in tax liens and deeds?
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Please leave comments and thoughts on the best place to invest in tax liens below.
You have some good points about investing in Texas, but you’re missing something major. Texas is a redeemable deed state, not a tax lien state, so you are actually purchasing the deed to the property at the tax sale. And here are 2 more advantages to investing in redeemable deeds in Taxes: 1)unlike in other redeemable deed states you are considered the owner of the property when you record the deed, even though the previous owner has the right of redemption 2) If the lien doesn’t redeem, you don’t need to foreclose you are automatically the owner of the property, you already have a recorded deed that is valid, all you have to do is clear the title to the property. This is an advantage over other redeemable deed states where you have to foreclose and then clear the title to the property.
Happy and Prosperous Investing,
Joanne
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