Imagine waking up to find that your money made more while you were sleeping than it would have in a whole month sitting in a savings account. That's the magic of tax lien investing.
Many states offer statutory interest rates that soar into the double digits — 12%, 16%, even 18% or more. And unlike risky speculation, these returns are not just high, but also backed by the law and the property itself, providing a sense of security to the investor.
Here's how it works: When a property owner fails to pay their taxes, the county sells a tax lien to recover that debt. You, as the investor, pay the taxes owed, and in return, you receive a certificate that entitles you to repayment plus interest and penalties.
It's a straightforward process that anyone can understand and participate in.
The owner must pay you back to remove the lien — and until they do, your money is working harder than ever.
The best part? These returns are passive. Once you've done your due diligence and purchased the lien, the process is handled by the county.
No tenant calls. No stock charts to watch. No daily management. Just sit back and let the interest accrue.
Action Step: Research states with the highest statutory rates and redemption periods. For example, Iowa and Illinois are known for their high rates. Build your auction calendar to prioritize them.