Are Tax Liens worth the Time?

I went to my county web site to understand how they do tax liens. I had been reading anything I could find on tax liens and they sounded interesting. I also understood that “Public Oral Bid Auction” will start at a designated interest rate i.e. 18% and work its way down during bidding to as low as 0%. When I went to the county web site they actualy posted what the average tax lien interest rate is. This is a copy/paste of that there post -
“”“The bid represents the rate of interest that would be earned by the taxbuyer on the purchase amount during each six months of the redemption period, if the owner redeems the sale. By law, the maximum interest rate bid is 18%. The sale is to the person who bids the lowest percentage of interest. In the last several years the average successful bids ranged from 0% to 3%.”“”

Is there something I am missing with understanding why these bids are so low on the rate? All these people cant be going after possesion of property can they? I wanted to make a rate return on money.

This link to County Rules

I need to study it more to understand it but if you can look and offer insite I would be Thankful ???

3% return is not a good investment at all! I would rather put it in a CD or private lending to other investors for that, Its safer. Keep in mind… Most homeowners will never redeem the property and only get a return if they redeem, you get the property if they do not.


Yes, they are, but you have to decide which state to pick up the tax certificates. I have never picked up any certificates in illinois so I cant comment. I can say that I have looked over the list of certificatds that are avialable to to on the tax collectors website, or I paid for the information. Remember, for most states, it tends to accumulate. So you need to divide 18% by 12 months to get the montyly percentage. So as each month goes by, your investments increase by that amount. Also, you are usually offered first dibs on the following years taxes if they are not paid on time again. Then again, the percentage would accumeulate on whatever you decide to pay for the tax lien. Hope that answers your question. FYI, try to reserach texas. They have an intersting system. 25$ return the first year, and 50$ the second if the homeowner decides to pay the taxes back. Darius B had an audio interiview on REI club taht might be of interest to you. Search for it, if you cant find it, ask the rei people if they can provide it to you. I thought it was pretty informative