Your Comprehensive Guide on How to Buy Tax Lien Properties

Hello there! Interested in investing in real estate? Have you heard about buying tax lien properties? If not, then you’re at the right place. Our aim at Tax Lien Code is to guide you on this unique investment path.

What is a Tax Lien Investing?

First, let’s understand what tax lien investing is when property owners fail to pay their taxes, the government places a lien on the property. This lien is then sold to investors who hope to earn interest or even secure the property if the lien is not redeemed. Now that you know what it is, let’s delve into how much you might need for tax lien investing.

How Much for Tax Lien Investing?

You’d be surprised that tax lien investing can be pretty affordable. The cost to buy tax lien properties depends on various factors such as location, property value, and unpaid tax amount. In some states like Texas, tax liens are auctioned starting from unpaid taxes, which can be a few hundred to a few thousand dollars.

Benefits of Property Tax Lien Investing

Put on your thinking caps! We’re about to dive into why buying tax lien properties could be smart for you.

More Money in Your Pocket

Let’s imagine you’re at a yard sale and find a rare, expensive toy being sold for just a dollar. You buy it, and later someone who collects these toys offers you $20. That’s a big win, right? This is like what happens when you put your money into a tax lien.

When you buy a tax lien, you’re lending money to the property owner to pay their taxes. In return, they promise to repay you with extra money, called interest. This can mean more money in your pocket. This is what we mean by ‘profitable returns.’

Maybe even a New House!

Let’s say that rare toy you bought at the yard sale is never collected by the person who wanted to buy it from you. Now, you get to keep that special toy. This can happen with a tax lien property too.

If the property owner doesn’t pay their taxes and the extra money they owe you, the house or land becomes yours. This doesn’t happen very often, but when it does, you could get a house or land worth more than what you paid for the tax lien. This is what we call ‘potential ownership.’

It’s a Safer Bet

Have you ever played a game where you knew you had a higher chance of winning? Buying tax lien properties is a bit like that. When you put money into other types of real estate, like buying houses to rent out, there’s always a risk that something could go wrong. Maybe the house needs expensive repairs, or you can’t find anyone to rent it. But when you buy a tax lien, your money is safer. This is because the government is involved, and you earn money as interest or even get the property. This is why we say it has ‘lower risk.’

Ultimately, investing in tax liens is like playing a smart game where you have a good chance to win. It’s a way to grow your money and maybe even become a property owner. So, ready to play?

Remember, Tax Lien Code is always here to help you learn more about investment in tax liens. Let’s make smart moves together!

How to Buy a Tax Lien Property?

Step 1: Do Your Homework

Before you jump into this adventure, it’s important to learn about the rules. Tax lien investing is not the same everywhere in the US. Some states have different laws about buying tax liens. Do a lot of reading and ask a lot of questions. Your investment in tax liens will be safer and smarter with good research.

Step 2: Go to a Tax Lien Sale

A tax lien sale is a bit like a big market where people bid on tax liens. These sales can happen in a town hall, or sometimes on the internet. You have to tell the people running the sale how much you want to pay for the tax lien. This is called bidding.

Step 3: Winning the Tax Lien

The person who says they will pay the most money gets to buy the tax lien. This is called winning the bid. But remember, you shouldn’t pay more than you can afford. It’s a good idea to think about how much money you can spend before you start bidding. Then, try not to spend more than that amount.

Step 4: The Waiting Game

Now comes the hard part: waiting. After you buy the tax lien, you need to wait for the property owner. If they pay their taxes and the money you paid for the tax lien, you get your money back. Plus, you get extra money called interest. This is how you earn money when you buy tax lien properties.

But what happens if they don’t pay? Then, you might get to own the property! That’s a big win from your tax lien investment. But remember, this doesn’t always happen, and the rules can be different in different states. So, always do your homework!

These are the main steps on how to buy a tax lien property. It may sound a bit complicated, but with some time and patience, you can get the hang of it. And remember, if you need help understanding tax liens, or if you want to learn more about property tax lien investing or tax lien investing in Texas, feel free to reach out to us at Tax Lien Code!

What Happens When You Buy a Tax Lien Property?

Once you buy a tax lien property, you essentially hold a claim against it. You can earn a decent interest rate if the property owner repays the lien. If they do not repay within the redemption period, you can start proceedings to take ownership of the property.

Remember, each state has different regulations, so it’s crucial to understand the tax lien investing laws in your target area. For instance, the rules of tax lien investing Texas may vary considerably from those in other states.


Tax lien property investing is a unique and profitable venture when done right. With Tax Lien Code as your guide, you’re one step closer to making an informed and wise decision in your journey of tax lien investing. If you want to dive deeper into tax lien investments or have any questions, please contact us. We’re here to help you make the best investment decisions!

Remember, knowledge and patience are the key to success in tax lien investing.