Tax Deeds Plus Investing Equals Win-Win For Everyone

Tax deeds are one more way to invest in the troubled real estate market. The downward spiral in the global economy is problematic on many levels. Many individuals have lost their jobs and homes. Consumerism is way down and citizens are beginning to take a look at the ways they've lived their lives past in order to look ahead to the future. While some may consider this valley to be a terrible thing, others are seeing it as a way to re-evaluate what really matters and to learn to tighten our belts a bit. Does anyone really need a closet full of brand new clothes purchased on their credit card? Does anyone really need to eat out at 5-star restaurants seven days a week? Not only are people rethinking their spending habits and values, many of them are actually relieved to have lost their massive house with the gigantic house payments. Rather than being a devastating earthquake, this rumbling may instead be a recalibration and an entry into better things such as freedom and flexibility. On top of that, investors are able to buy foreclosed, tax deeds sales or repossessed properties at a fraction of the real estate value. In many ways, this economic recalibration is a win-win for all concerned. Here are some things to think about:

- Delinquent taxes: Property taxes are paid to county treasurers in the fall and spring of each calendar year. If they're not paid, the homeowner will get delinquency notices and have fines layered on top of the overdue tax payment.

- How they're paid: If a home is mortgaged, the mortgage company will collect a 12th of the annual amount due with each monthly payment. Homeowners typically pay P.I.T.I. which means payment including taxes and insurance. The bank holding the mortgage pays the taxes in the fall and spring. If a house is paid off, it's the property owners' responsibility to pay the country treasurer as the bills become due.

- Why P.I.T.I.: Some people might wonder why individuals would pay their taxes and insurance to a bank rather than an insurance company and the county treasurer. The answer is two-fold: For one thing it's more convenient for the homeowner; for another, it protects the banks' investment. Insurance will cover any damages that may occur along the way. Paying the tax-man will ensure that liens don't appear against the note the bank holds.

- How the former homeowner wins: Some individuals think that losing one's house might be the most horrible thing that could ever happen. While it will be difficult initially, if the families are able to find more affordable housing and get out of their bloated mortgage, they will eventually have a higher quality of life.

- How an investor wins: Sometimes properties are auctioned off for only the cost of back taxes and fines. This is an opportunity to snap up bargains like never before.

The downward cycle of the economy has its positives as well as negatives. Homeowners who were in over their heads can move toward freedom and flexibility. Investors are able to purchase real estate at bargain rates due to foreclosures and tax deeds sales.