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Your Guide to Tax Liens

Whether you are looking for ways to invest for the first time, or you’re a real estate professional who wants to expand your portfolio, tax liens can offer a wonderful opportunity. While real estate investment and “house flipping” are becoming more and more well known methods of making extra cash, tax liens tend to be less understood.

GA Tax Lien Boot Camp is here to help! In today’s post, we’ll be breaking down the basics of tax liens so you can better understand this niche of real estate investment, and decide whether or not it’s the right opportunity for you. Continue reading to learn more, and contact us today to sign up for your first tax lien bootcamp!

What Is a Tax Lien?

Tax liens are issued by the city or county when a landowner fails to pay their property taxes. It is a legal claim made against the property for the amount of unpaid taxes, and the property in question cannot be sold or refinanced until those taxes are paid and the lien is removed. Tax lien certificates, which are records of the amount of taxes owed as well as any applicable interest and/or penalties, can be bought and sold just like the property itself.

How Tax Lien Investment Works


Potential investors can buy tax lien certificates at auctions. The municipalities want to recover that money, and will sell tax liens to the highest bidder. The investor then pays the amount on the certificate to the city or county, and acquires the right to collect repayment and interest for the lien from the property owner who didn’t pay their taxes.

Your Return on Investment

Regardless of who has ownership of the tax lien, the property owner is responsible for repaying the amount of taxes they owe in addition to interest. In the case of an investor buying the tax lien certificate, the investor will receive payments toward that amount from the property owner and can charge an interest rate. If they paid a premium for the lien, the investor can also add that to the bill. If the property owner cannot pay the amount within the set timeline, then the investor can foreclose on the property in the same way the municipality would have.

Advantages of Tax Liens

There are many reasons why investors choose to work with tax liens. For one, tax lien certificates are not connected to the market, so they don’t have the same vulnerability to fluctuations in value like stocks do. You receive a consistent rate of return from the interest you charge. They also come with a low buy-in in some cases, and most tax liens are paid back without the hassle of foreclosure. However, as with any form of investment, there are some risks you need to be aware of.

Warning Signs to Watch For

One of the biggest traps in tax lien investment is when an inexperienced investor buys a certificate that actually has more value than the property itself. In that case, the property owner often has very little incentive to pay back the amount owed. Foreclosing on a property can also be a mess of legal fees and other complications for those without much expertise in real estate.

If you want to take on tax lien investment, you need to understand the benefits and the possible pitfalls, as well as your responsibilities as an investor. You also need to understand the local rules that apply — the guidelines around tax liens change with every state. If you live in Georgia, then you already have a tax lien investor ready to help you make the leap! Find a GA Tax Lien seminar near you, and sign up today to get started!