Sometimes I’m asked, “Why invest in tax lien certificates?” I have a one word answer to this question, SAFETY. There is no other investment I know of, that gives me such a high rate of return with the degree of security that I have with tax liens. Tax Lien Investing offers other advantages that I like as well. Like the following…

1. Consistent Return. Regardless of what the stock market does or what the housing market does, you get the same high return on your investment. Your interest rate does not go up and down with the market.
2. Low Initial Investment. Unlike other real estate investments, you don’t need tens of thousands of dollars to get started. You can purchase your first tax lien for under $1000.
3. No Liability. Unlike other types of real estate investing, there is no liability with a tax lien. When you purchase a tax lien, you are not purchasing the property and you don’t have any liability for it. You don’t need property insurance.
4. No Brokerage Fees. Unlike investing in the stock market or other types of securities, you don’t need a broker to purchase a tax lien. There are other costs, like recording the lien with the county clerk, but this is paid back to you when the lien redeems.
5. Higher Interest Rates. Rates on tax lien certificates are higher than you can get with other safe investments, like a money market account at a bank or a CD.
6.  Tax Free Investing. You can legally avoid paying taxes if you invest through a self-directed IRA. If you use a self-directed Roth IRA, your profits can be totally tax free.
7. First Position. In most states a tax lien takes first position over other liens. That means that if the lien doesn’t get redeemed and it goes to foreclosure (which doesn’t happen very often), you are first to get paid.

Why invest in tax lien certificates? Because we have a better place to put our hard earned money, to make it work harder for us. The stock market does not have a very good track record. And right now the real estate market in a lot of states is taking a licking. But if you have a tax lien on a property, it doesn’t matter if the value of the property goes down, the tax lien still makes the same interest rate that you got at the tax sale.

As long as I buy tax liens on good properties, in good areas, and get great interest rates, the return on my investment will help me live a very comfortable life and meet my financial goals.

I am frequently asked the question “How much money do I need to get started in tax lien investing?” How much money you need to have to start investing in tax liens depends upon your goals and the state that you are investing in. Listen to this podcast episode to find out how much money you need to get started and to get an idea of what kind of return you can expect from investing in tax lien certificates or redeemable tax deeds.

Click the blue link below to download the MP3 to your computer.

How Much Money do you Need for Tax Lien Investing?

By Joanne Musa, The Tax Lien Lady

I am frequently asked, “How much money do I need to start investing in tax liens.” Well, that all depends on what your goal for investing is. If you’re using tax lien investing as a way to invest for the future, then you can get started with a couple of thousand dollars. But if you want to create an income from tax lien investing than you need to invest much more.

One thing that you have to remember is that tax lien investing is not a get rich quick scheme. It’s not like other types of real estate investing like buying and flipping properties, or owning rental properties. With foreclosure properties, you have an idea of when you’re going to cash out of your deal, and with rental properties you have a steady income. With tax liens, you don’t get paid until the delinquent taxpayer decides to redeem the lien or redeemable deed. This may not be until the redemption period is over and foreclosure notices are delivered.

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