The Difference Between Tax Liens and Tax Deeds

There are numerous investors out there that do not have any idea on the actual distinction between tax liens and tax deeds. Indeed, tax liens and tax deeds are a wonderful investment and many investors notice that it's one of the easiest ways to get a property at a huge discount. But, some are still confused between liens and deeds. The question is, which one of these is the wisest way to acquire a property? Is it tax lien? Or is it tax deed? Let's try to find out.
Let me present to you several facts. A Tax deed is a specific form of deed resulting from non-payment of taxes. It directly transfers ownership to a property. Government agencies conducts tax deed sale in a compelled way. Governed by law, these properties are pulled out due to non-payment. This is a proven technique used by government firms to accumulate delinquent taxes owed from real estate. But, taxpayers are granted an allotted time period to pay his/her obligations. Warnings and notices are given before the particular county offers the property to investors. When it reaches the tax sale or the auction, and when someone buys the tax deed, the taxpayer not only owes the price of the deed but it also comes with fines, interest and penalties. Some counties give a predetermined amount of time for the taxpayer to redeem the property. If not redeemed in that given time, the investor becomes the owner of the property.
On the other hand, let's talk about tax lien. Tax liens are created to ensure the security of payments for taxes imposed in a certain property. The taxes are collected annually which are called liens, if the owner of the property cannot pay the amount due, the tax liens are sold to investors through an auction. The investors will pay, and the owner of the property will pay the investor with the amount paid during the auction together with interests and penalties. If these are not paid based upon the redemption policy period of the state, the property goes to the investor.
To simplify, tax liens is when you pay the tax amount delinquent by the owner, so you are not buying the property itself. You will eventually earn through a period of time due to the penalties imposed and by having a chance of being the legal owner of the property. With tax deeds, an investor is buying the property on a tax deed sale. One purchases the deed, and the property becomes yours.
Nowadays, the law provides secured interest rates to tax liens. If you want to regularly earn interest on your investment, then invest in tax liens. The Government guarantees that you will gain your returns on your investment. With a Tax deed, you to end up with the property. The initial investment is usually more, but redemption is less likely to happen.
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About the Author

Owner of Deluca Property Solutions, a real estate investment company who buys and sells property. Specialized in creative real estate and offer alternative solutions if you are looking to sell property and for investors who are looking to buy property. Have been in the industry for a long time. Also an expert in tax lien and tax deed investment. If you want to know more about the company he is handling, you may visit http://delucapropertysolutions.com/