Last updated on October 8th, 2023

The POWER of Tax Lien Certificates:
This is a basic overview of tax lien certificates, to help you get started earning a lot more money than what most banks are paying in interest for checking, savings, and CDs.

Tax lien certificates are an exciting, very safe, win-win investment.  There is no need  to pay someone $500.00 or more for a course for you to learn how to start making large returns on your hard-earned money, because most of the information you need will be available at a county government office or its website.

Across the United States, many counties hold yearly tax lien certificate auctions.  These auctions go by different names from county to county, but the process is basically the same:
Homeowners, business property owners, and land owners who have gotten behind on their county property taxes will have to pay interest on those taxes if they aren’t paid by a certain date after their due date.  100% of the interest usually goes to investors who have the successful bid for each property bid on at the auction.  Depending on the state the property is in, and how many years the taxes are delinquent, the successful bidder either receives his/her principal and interest, or the property itself ¹.

Some auctions are concluded in one day, where others may take several days.  It depends mostly on how many properties there are to put up for bids.

Why Tax Lien Certificates Are A Win-Win Investment: 

The only conceivable way that you can lose your investment principal is if the county where you won bids permanently shuts down / “goes out of business” for some unseen reason.  Although many things are possible, a county permanently shutting down isn’t likely to happen, especially for counties near large metropolitan areas.  Another reason for the win-win situation is that the property you bid on should be worth considerably more than the taxes owed.

In the county where I live, the interest is graduated, depending on how soon the delinquent property owner pays the county back after the auction.  Our highest rate of return was 12% per property.  A 12% return on an investment for one year is nothing to sneeze at, considering the very low rates that banks are paying nowadays.  These types of auctions can be another income stream in your Multiple Streams of Income.

One way you can become familiar with the auction(s) in your area before investing any money, is simply to go to one.  The date(s) for the upcoming auction(s) can usually be found on the counties’ Treasurer website(s).  If you have trouble finding the information, call the Treasurer’s office for assistance.

You are not limited to only investing in the county you live in.  Basically, counties all across the United States are available for you to become an investor in.  Before traveling, call the counties (or view their websites) that you are interested in attending an auction in, to see if they actually have auctions, and that they allow non-residents to participate in them.  If you are not able to travel to neighboring counties, or to counties in other states, some counties allow you to register as an investor and place bids online.

Do I need a college degree or something like that to get started? 

No.  This is the bare minimum you will need:  basic reading skills, basic math skills, the ability to see clearly, and to be able to hear what is being said at the auction.

How much money do I need to take with me to an auction? 

That will depend on what your financial situation is, but $800.00 is a good starting amount.  Please do not take your “last money”, life savings, rainy day funds, or your nest egg to the auctions, because it can take months or a year before you get any money back.  Instead, take some money you already have saved, or save up and then take your disposable income, by saving cash each payday that you won’t miss, until you have enough to start placing bids.  Go to an auction with the list of available properties that the county provides (sometimes they are listed in local newspapers) and get a feel for the bidding process.  Depending on where the property is located that is up next for bid, and how much taxes are owed, some investors will bid low, something like $300.00 for ponds, lakes, a small piece of land, or lower value homes, where other investors may start at $2,000.00 for SOME high-value single family homes.  After you get experience in participating in the auctions, I suggest that you have at least $5,000.00 in your local bank account for auctions if you are bidding in a local county, if you can afford that much, because the bidding process can become competitive at times depending on who the other investors are, and which properties are being bid on.  You will also need to pay to be registered as an investor/bidder, and it may be necessary to pay for a delinquent property list at the auction site.  Carefully read the documentation that the county gives you, know your financial limits, and try not to get caught up emotionally in bidding wars with other investors (if you are a beginner), because some of them have very deep pockets, and if you are the successful bidder and you don’t have enough money to cover the winning bid, the county can fine you.  You can also be fined if you don’t pay for your bids by the bid deadline time that the county sets.

Safety Note:  Please do NOT take large sums of cash with you to the auctions, get a cashier’s or certified check from your bank (or other financial institution) after you finish with your successful bids.  The auctions themselves are not dangerous, but others around may take note of how much money you are carrying when you are paying for your bids.

The property list you get from the county should have a description of the property, so, if you are a beginner, please do NOT invest in easements (another word for a driveway or path, long or short), ponds, lakes, and abandoned buildings, instead start with small acres of land, and lower-value single family homes.  If you are very familiar with the neighborhoods in the town, city, or county you live in, there should not be a need for you to drive around looking at properties you may want to bid on, unless you want to, because my advice to you is to invest in properties like single family homes in more well-to-do neighborhoods and sub divisions.  But, until you become familiar with the homes in the neighborhoods, and comfortable with everything, drive around and see the properties.

(¹ When I go to the auctions, my aim is to receive the interest on my investment, not someone’s property, because It can be even more difficult for that person to Prosper if his/her house has been taken away by a government agency.  I personally believe that government property confiscations for not paying property taxes is immoral.  For example, If the principal money earner in a family dies or is seriously ill, and bills can’t be met for months or years, if some government entity comes along and seizes a person’s  property (which the government paid nothing into) is cold.  At one auction, I saw a property owner go to the successful bidder on his property to work out some kind of deal.  Don’t worry, generally you will not see, or be contacted by a property owner.)

If you found this information helpful, or you know some others who would benefit from reading it, pass this Post on so that more may Prosper.

Keep checking back to this Blog for information that explains how you can turn your possible 12%+ auction earnings into at least one million dollars, in a Post that we will call “Make More Money Through Compounding POWER“, (no overpriced or $1,000.00+ scam course is needed).

Leave a comment below, and go Prosper!

(Disclaimer: I am not an investment advisor.  I am only giving you my experience with the subject of this Blog Post.  Financial investments can be very risky.  Please do your research and consult with a trusted advisor if you believe you need to, before investing in any financial product or vehicle you are unfamiliar with.)