Tax Lien States: A Complete List

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  Written by Ben Mizes

When a local (typically county) government needs to collect past-due taxes from a property owner, they ask investors to come pay the bill.

In exchange for paying the past due taxes, investors become lien holders of the property–which means if the owner wants to get their property back, they must pay back the investor–including interest.

Below is a complete list of states that have tax lien sales:

• Alabama
• Arizona
• Colorado
• Florida
• Illinois
• Indiana
• Iowa
• Kentucky
• Maryland
• Mississippi
• Missouri
• Montana
• Nebraska
• Nevada
• New Jersey
• New York
• Ohio
• South Carolina
• South Dakota
• Vermont
• West Virginia
• Wyoming

How to make tax lien investing way less risky

If you’re interested in tax liens as an investment, you’ll want to make sure you’re completely educated on the process before diving in.

Investing in anything without being educated and knowing what you’re doing is a great way to lose a fortune.

I wrote a guide on investing in tax liens without getting burned–you should check it out if you’re into this stuff.

To summarize that post here, there are 3 key things you need to know:

Know what your goal is

Do you want to actually own the properties you’re bidding on, or do you want to collect the interest the lien will generate?

Understand what you want before going in. A lot of worthwhile properties will have the owner redeem the property before the sale, or will have the mortgage holder (if there is one) step in and outbid you to protect their interest in the property.

If there is a mortgage on the home, and you manage to get your hands on the lien, some states will allow the mortgage holder to redeem the certificate. In this case, liens you have on a home with a mortgage is a really solid bet that you will get paid back, with interest, on the lien.

Dont buy junk

Whatever your goal for investing (interest rates return on your money or owning properties) you’ll lose if you’re buying total junk.

Let’s face it–there’s a reason why folks are just letting their properties go. Sometimes it’s because they aren’t worth anything.

Do as much diligence as you can on properties before you bid.

Understand that it’s all local

Every single county has requirements, dates, deposits, fees, etc. for their auctions.

If you try to spread yourself too thin, you won’t be successful.

Stick with what you know. Pick a a few counties to focus on at first and build your experience.

Try attending a few auctions just to get your feet wet.

A Note on Tax Deeds…

If you want to own the property right after the auction, then you’ll want to look for states that sells tax deeds at auction.