Find out why you should invest in tax liens.
Heard about tax lien investing? Not sure if you want to get into it because you’ve heard both pros and cons? Read the article below to find out three reasons you should invest in tax liens.
If you’ve been looking for ways to make some extra money, you’ve probably come across the concept of tax lien investing a time or two. After going around the horn a few times and realizing that most investment opportunities aren’t worth the internet space they’re taking up, maybe you’ve come back to this concept to find out if it is any more worthwhile. The good news is that is definitely can be. For the person who does their research, it can be a gold mine. There’s no such thing as easy money (unless you win the lottery), but if you’re willing to put the work in, few opportunities have quite the upside. Here are three reasons you should be interested.
Interest Rates
Put your money into a savings account and you’re going to get very little return on your investment. One would have to stretch the definition of the term to even apply it here, actually. The stock market can be a better place to put your money, but it is slow growing and the days of exorbitant dividends are largely behind us. Tax lien investing gives you the opportunity to take advantage of high interest rates to make your money back at a much faster rate, with a higher ROI in the first place. If you don’t want to wait for retirement to see a return on your money, there are few opportunities that will better serve your needs.
Risk
There is no such thing as a risk-free investment. You can put your money in the safest mutual funds and still risk losing it all if things go south. And that’s one of the safer opportunities out there. If there was no risk, there would be no reward. Having said that, however, tax lien investing gives you a safer opportunity than many others will. Is it possible that you could lose money? Absolutely. But if you take your time, do your research, and let those with experience in the field guide your progress, you’ll be much more likely to succeed than you would be in the traditional real estate market.
High Redemption
If you’re trying to get your hands on some inexpensive properties, tax lien investing is probably not the best way to go about it. It could be years before you finally bid on a lien that eventually turns the deed over to your hands. That’s not what this type of investment is about. You want the homeowners to cover what they owe. You pay the government, they pay you, and you move on to another opportunity. It’s cleaner and the hassles aren’t nearly as prominent.
About the Author
Andrew Stratton
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