Please try to explain this like you would to a high school student.
What are tax sale properties?
What are the advantages/disadvantages?
What are the risks? How do you reduce them?
What are the steps in detail on how to approach this?
OK, if people don't pay their property taxes, then it reverts to the city. About twice a year the assessor's office publishes the delinquent taxes in the paper and there's an auction. So if you didn't pay $500 of taxes, then someone could snap up your house for $500 for a $100K home! There is a redemption period (varies state to state) where the owner can scrape together the money. If they do, you get like 18% interest on your $500 and they keep the property.
Disadvantage is (and this is the major one) if the people who lost their house are really ticked off and vandalize it or come after you for "stealing" their house.
I bought a lot once on tax sale. I just talked to the assessor and asked what all was up for sale in my town. I got a building lot for $100. They just want to get it back on the tax roll.
If you pick the "right" kind of property, it can be lucrative. I sold my lot 6 years later to a neighbor for $800. Not a bad return!
OK, if people don't pay their property taxes, then it reverts to the city. About twice a year the assessor's office publishes the delinquent taxes in the paper and there's an auction. So if you didn't pay $500 of taxes, then someone could snap up your house for $500 for a $100K home! There is a redemption period (varies state to state) where the owner can scrape together the money. If they do, you get like 18% interest on your $500 and they keep the property.
Disadvantage is (and this is the major one) if the people who lost their house are really ticked off and vandalize it or come after you for "stealing" their house.
I bought a lot once on tax sale. I just talked to the assessor and asked what all was up for sale in my town. I got a building lot for $100. They just want to get it back on the tax roll.
If you pick the "right" kind of property, it can be lucrative. I sold my lot 6 years later to a neighbor for $800. Not a bad return!
References :
A tax sale property is one that has been repossessed by the local government for nonpayment of real estate taxes ( or other things governed by the jurisdiction, like utilities) and is being offered for sale. It is no different than buying any other real property except that the seller is the government; the same investment risks that are inherent is any real property transaction apply.
References :