Real Estate Investment Tax Lien Certificates Key Terms
Discover pros and cons of real estate investment through tax lien certificatesWhen you know real estate investment tax lien certificates key terms, you'll be able to identify whether or not the pros and cons of this type of investment are worth the risk. Tax liens are a specific way an investor can attempt to purchase property, but there isn't a guarantee that the investor will wind up owning it. There are other things to consider, such as the grace period and the redemption price.
Tax lien sale
Real estate taxesThe county and state determine the tax owed for properties that fall within their jurisdiction. The government bases taxes on the property's value as it relates to other properties in the area.
Grace periodThe grace period, or the redemption period, is the amount of time an owner has to pay the taxes and any fees associated with the tax lien. If the owner completes the payoff within the grace period, the title reverts to the mortgage lender or property owner. The redemption period varies by state.
Special assessmentA special assessment is a fee owed by an owner for certain improvements to the property. This can include installing city sewer or water to a subdivision. Failure to pay a special assessment may result in a lien on the property.
Redemption priceThe redemption price is the amount a property owner must pay in order to clear the tax lien. It can include the original amount for taxes plus additional fees like interest, special assessments or auction fees.
Tenant evictionWhen a property owner fails to pay the tax lien, the tax lien holder, or investor, gets the title to the property. In order to claim ownership, a tax lien holder may need to evict the owner and/or file for foreclosure.
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