How To Buy A Tax Deed Property

It is important to understand the basics of how to buy property tax deeds before we get into the steps of purchasing such a property. An example will elaborate the process in a better manner. Suppose that an individual purchases an apartment and then fails to pay off taxes applied by the government. As a result, the relevant county issues a property tax deed which means that the property cannot be sold to another buyer or refinanced till the taxes are paid off.

After a certain time span of property tax deed issuance, the property is auctioned where the highest bidder gets the ownership. However, the process is not as simple as it seems.

Do Property Tax Deed Regulations Differ From One  County To The Other?

It is commonly said that rules should be understood before you play a new game. Buying property tax deeds is a procedure with implication of numerous conditions. For instance, the rules for selling a property tax deed in New Jersey may not be the same as California. Some counties reauction the property if it remains unsold at the end of the auction. In case of re- auction, the price is reoffered after approval from the tax collector’s office. Hence, if you are interested in going for a re-auction, ensure that you have gone through the necessary conditions.

How To Buy Property Tax Deeds

There are high chances that property tax deeds may have major repair requirements which the owner would have to fix. Once you learn how tax deed auctions work, there is absolutely no turning back. Hence, get in touch with a realtor who can schedule visits for the property. Have a close look at the plumbing conditions, standard of electrical infrastructure, wall paints and other aspects as well. At times, buyers who know how to buy property tax deeds at low prices and end up with too much repair work. Thus, ensure that you have examined the property before advancing.

Do You Have A Well Defined Purpose For Buying Property Tax Deeds?

Buying property on tax deeds or under standard options is not something one does on a daily basis. Even if you are an experienced investor, have a well defined purpose in mind. For instance, consider that you want to resell the property after necessary furnishing / repair work and generate one time profits.

In that case, get a feel of what the area is worth in terms of property selling. As you learn how to purchase tax deed properties, be sure to have a clear analytical calculation about profit margins. You can even consult a local realtor to give you an idea. Similarly, if renting out is the purpose, get an estimate of rental incomes in that area. You may be getting a property at very low rates due to a commercial site located nearby. In that case, rental incomes would be low.

To sum it all up, there is nothing bad about learning how to buy a tax deed but if you are new to this, do your homework first. Understand the process including auction participations, possession and paperwork involved before venturing into this niche.