| Most investors know the difference between a | | | | |
| tax lien and tax deed. They understand that when | | | | A redeemable tax deed is very similar to tax |
| they purchase a tax lien they are not buying the | | | | liens, but there are some important differences |
| property, but paying the taxes on a tax | | | | that I believe make redeemable tax deeds a |
| delinquent property and putting a lien on the | | | | better deal for the investor. I will point out that |
| property so that if the property owner doesn't | | | | every redeemable state treats these deeds |
| pay the amount of the lien plus interest and | | | | differently. In some states, like Texas for |
| penalties, in a given amount of time (the | | | | example, when you purchase a redeemable deed |
| redemption period) they can foreclose on the | | | | you are considered the legal owner of the |
| property. And they understand that when they | | | | property and can evict anyone who may be in |
| go to a tax deed sale and purchase a tax deed, | | | | the property once you record the deed. The |
| they are actually purchasing the property. But | | | | previous owner has redemption rights, but is no |
| many would be tax lien investors do not | | | | longer considered the rightful owner of the |
| understand what a redeemable tax deed is and | | | | property. But in Georgia, which is another popular |
| how it differs from a tax lien. | | | | redeemable deed state, when you purchase a |
| | | | | deed you are not the legal owner of the property |
| What Is a Redeemable Tax Deed? | | | | until the redemption period is over and you |
| | | | | foreclose on the property. In Georgia you must |
| A redeemable tax deed is something in between | | | | foreclose the redeemable deed much like you |
| a tax lien and tax deed. When you go to a | | | | would a lien in order to take ownership of the |
| redeemable tax deed sale, you are actually | | | | property. |
| purchasing the deed to the property. If you are | | | | |
| the successful bidder, you will receive a tax deed | | | | But in both states and in most other redeemable |
| to the property. That deed, however, is | | | | deed states, in order to redeem the deed, the |
| encumbered for a period of time known as the | | | | owner must pay the investor what they bid at |
| redemption period (not to be confused with the | | | | the tax sale plus a hefty penalty, not interest. |
| redemption period for tax liens). The owner can | | | | What this means is that if you purchase a |
| redeem the property by paying the amount that | | | | redeemable tax deed and it redeems a few days |
| was bid for the deed at the tax sale plus a hefty | | | | after you record the deed you still get the full |
| penalty. If the deed is not redeemed during the | | | | penalty amount. You make the same interest on |
| redemption period then the previous owner is | | | | your money if it redeems in 2 weeks or 2 years. |
| barred from redeeming the property and the tax | | | | A penalty is not annualized like an interest |
| deed holder is the owner of record and the legal | | | | payment would be. |
| owner of the property. | | | | |
| | | | | What are the Drawbacks to Investing in |
| Which is Better, Redeemable Deeds or Tax Liens? | | | | Redeemable Deeds as Apposed to Tax Liens? |
