Tax Title Sales - Lucrative Yet Low Risk Investments

A tax title sale is a type of lien certificate sale that allows the State to recompense any taxes liens and dues by confiscating the immovable assets of a homeowner. Typically conducted via the platform of a community auction, the land parcels or properties are advertised open for public bidding and can be quite a lucrative venture for the seasoned investor.

Investing in Tax Title Sales

Delinquent taxes are the prime reason a property is auctioned and deed sales of this nature allow the debtor to be cleared of further liability. The investor is, in general, purchasing not just the lien itself but any statutory costs associated with it.

Foreclosure sales are usually one of the most profitable investments in terms of ROI, given that the land parcels are sold much below their original evaluation. The minimum bid figure is set depending on the adjusted market value and an independent property review undertaken by a state-employed assessor. Given that foreclosure auctions are public events, they are typically advertised in national dailies or on the Web and the final sales confer the treasurer's deed to the purchaser.

Property Insurance

Title insurance helps protect the buyer from any potential problems with the property investment. While the lien itself may be devoid of any concerns at the time of purchase, insurance is vital to keeping the purchaser's as well as the lender's best interests in the event that there are legal claims to the property at a later date.

In addition, insurance can help compensate the investor against any fraudulent cases or municipal work orders that were pending at the time of foreclosure, which can affect ownership of the land even after the purchase is legally complete. For instance, depending on the past ownership changes, any forged deed transfers or even payment defaults on the property itself or the land on which it was built may need to be incurred by the current owner which vastly complicates the matter of future sale of the asset. Thus insurance is an absolute must to help ward against any possible losses and cover any legal claims that may crop up.

Who Needs Insurance

Title insurance is not obligatory, but it becomes essential if the property needs to be mortgaged. Regardless of whether you re-mortgage the property, insurance is recommended to help cover any liabilities against past ownership claims. Since policies protect the buyer from any losses or claims made prior to policy inception, the investor is protected from any issues with past ownership transfers or even in unpaid loans.

While the significance of insurance is undeniable, in most cases understanding the nuances of indemnity coverage and interpreting the fine print can be crucial. Also if the titles come with any pre-existing concerns, choosing an insurance carrier may become even more complex. Conferring with a qualified professional such as your attorney or with an unbiased advisory service is a sensible alternative.

There is little doubt that with careful business judgment and prudent analysis, investing in a tax title sale can be a rewarding investment area. Be sure to choose appropriate title insurance to keep risk minimal while still keeping long-term resale value intact.