by Charlotte Wood
(last updated February 21, 2009)
It's not uncommon to hear of people buying foreclosure property at super low prices and then proceeding to make a profit. How that property is acquired is through what is called a tax sale and can be a rewarding investment for those who have the means to do so. If you can note the distinctions in the different types of sales you participate in and know what's what with the property you want to buy, you could be in a good position to make some money off of foreclosed property.
A tax sale is basically just the sale of a foreclosed property. Tax sales further fall into two separate categories: tax lien sales and tax deed sales; with whatever sale you participate in however, you are in essence paying the taxes for the delinquent homeowner. With a tax lien you receive the right to the lien, allowing someone else to bid on the tax debt. With a tax deed sale however, the deed to the property is given outright to the buyer. When you buy a tax lien or deed you're essentially taking the pressure off the bank or government and making the homeowner indebted to you. With these a lien sale you can receive rights to the principal plus any interest and then if the homeowner doesn't or can't pay what they owe, you can foreclose and take the property outright. Both options—the lien and the deed—have their benefits and perks.
Before you go into a tax sale though, make sure you know what kind you're going into and what rules apply. Different counties have different rules and you should know those before you go in. Tax sales are a great way to make money and are great ways to invest. If you have the money, you should definitely look into tax sales and you could succeed in making a significant profit!
Tax planning is a great way to minimize federal income tax liability. There are several legal methods of postponing ...Discover More
If there is one thing that just about anyone can agree too, it is that time has a tendency to get away from us. This ...Discover More
If there is one aspect of taxes that causes the most confusion among people then it has got to be tax deductions. ...Discover More