What Are Redeemable Tax Deeds?
Are you familiar with redeemable tax deeds? In most states offering tax deeds, the redemption period ends one day before the tax deed sale, but there are a couple of notable exceptions, including Texas. In Texas you can find “redemption tax deeds” also known as “redeemable tax deeds.”
In Texas, counties can auction property after it has been tax delinquent for two years. Many counties in Texas conduct auctions as frequently as once a month, and there is a continuous stream of valuable real estate available to the highest bidder. Contact your local clerk’s office or central appraisal office to find out how often that they auction property.
The distinction of Texas tax deed sales is that the previous owner has the option to redeem the property for up to six months in most cases, or in some cases, up to two years if the property was classified as a homestead. If the property is redeemed within the redemption period, the property owner pays a hefty penalty equal to 25% of the highest bid.
To put it in perspective, if a property sells for $20,000 at a tax deed sale, and the owner redeems it within one month, he pays $20,000 plus the 25% fee of $5,000 for a total of $25,000. As the investor, you can earn a 25% return within a month which translates to an annual return of 300% if done repeatedly.
Here’s a quick money saving tip for you, do not put any money into the property that you purchase until the redemption period is over. If you do, and the property is redeemed, you will lose the money that you have put into improvements.
To learn more about redeemable tax deeds or my course, the Land Profit Generator, please visit http://www.landprofitsreview.com . Also, you will have the opportunity to sign up for our free list that brings real estate investing tips and discounts right to your inbox. No spam, just content!
