Tax deed sales can by highly lucrative, but be careful of the dangers
Tax deed sales have been the method of choice for many investors. The reason is simple; you have the opportunity to purchase property for pennies on the dollar. All you pay is the tax bill plus a few fees and the property is yours!
Sounds simple enough, but there is much more involved with tax deed sales then becoming the winning bidder in a property. Many of the properties at the tax auction aren’t worth the amount of taxes owed on them so the owner decided to let it go. I have seen many lots that are narrow pieces of land between two homes or land that is covered by water for part of the year.
There is certainly a buyer for those types of properties, but what would they be willing to pay? $20 maybe or $100 if you’re lucky.
Then there are the gems in the mix. Single family homes that can be fixed and sold for a nice profit or land you can buy for $300 and sell for $15,000.
Many investors make their living purchasing property at tax deed sales, but they can only do it because of the research they put into finding the gems in the long list of properties.
Two important tips for researching the property before buying it at a tax auction are first check the county records for a plat map. Many counties are online and can show you satellite imagery with the property boundaries. This can quickly help you decide if it is time to move on or continue researching.
The second important tip is to call the county or a real estate agent and ask them about the area. They often can tell you whether or not it is a good area regardless of how the map looks.
There are many more important areas to research, but those are two quick tips that can help you get your research off in the right direction. This site has great information about helping you through the process of buying properties at tax deed sales.
