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|Amount invested (winning bid amount)||$2,000.00|
|11 months of interest at 8% per annum||$146.67|
|Total Amount at Redemption||$2,221.67|
|Delinquent taxes owed with interest||$4,900.00|
|Current property value||$50,000.00|
|Winning bid amount||$38,500.00|
|Total collected by jurisdiction after sale||$4,900|
|Total collected by lender/mortgagee after sale||$33,600|
|Tax Lien Investing||Tax Deed Investing|
|• Does not transfer ownership at public auction; the lien acts as a loan accruing interest and penalties until redeemed.
• Inexpensive, with tax lien certificates costing as little as a few hundred dollars to a few thousand.
• Passive investment requiring very little work after initial due diligence and auction participation.
• Redemption period or expiration date of the lien varies by jurisdiction.
|• Transfer of ownership at public auction, where the property is deeded to the winning bidder.
• More expensive investment than a tax lien, costing anywhere from a few thousand to tens of thousands of dollars.
• Active investment requiring investor participation after the property is sold at auction.
• Sales can be redeemable or not depending on the state.