Last Updated on September 9, 2025
When you invest in a tax lien certificate, you are paying someone’s unpaid property tax bill. In most cases the owner will redeem the lien by paying back the taxes plus interest, which means you collect your investment and a healthy return. But there are situations when the owner never pays. In that case you receive the deed and become the owner of the property. This guide explains what to expect, how to prepare for owning a tax deed property, and how to sell it fast without sacrificing profit.
Why do most property owners redeem tax lien certificates?
Statistics from tax sale authorities show that roughly 97 % of property owners pay the delinquent taxes before losing their deeds. These redeemers reimburse your principal and interest, which can range from 16 % to 36 % per year, depending on the state. This high redemption rate means that you need to plan for both outcomes: earning interest if the lien is redeemed or acquiring a property if it is not.
What happens if the owner does not redeem the lien?
If the owner fails to pay during the statutory redemption period, you take title to the property. At that point you must decide whether to keep the property or sell it. Before bidding at auction, always research the parcel’s condition, market value and any other liens. Being prepared ensures you are comfortable owning the property if the redemption does not occur.
Should you keep the property or sell it?
Owning a tax deed property can be profitable in two ways:
- Rent for cash flow – You can rent the property to generate monthly income. This may suit investors who want recurring revenue, but remember you will be responsible for maintenance, insurance and property management.
- Sell for a lump sum – Many investors prefer to sell quickly to free up capital for the next deal. Selling fast means pricing the home below full market value and marketing it aggressively.
A good rule is to decide your exit strategy before you buy. Factor in your available capital, time and tolerance for being a landlord.
Minimal repairs bring maximum gain
The video suggests you do not need to spend a lot of money fixing a tax deed property. Simple tasks such as mowing the lawn, pulling weeds and picking up trash can dramatically improve curb appeal. Sweeping driveways and removing debris cost only a few hundred dollars but can add thousands of dollars to the sale price.
Basic cleanup checklist:
- Cut grass and trim bushes.
- Remove weeds and dead plants.
- Pick up litter around the yard.
- Sweep driveways and porches.
- Wash windows and replace broken hardware.
For properties in livable condition, you often do not need major renovations. However, always inspect for safety issues, and hire a professional if structural or electrical problems exist.
Pricing to sell: why less can be more
Successful tax deed investors understand that time is money. Holding a property for months while waiting for a higher price ties up capital. The recommended strategy is to sell low relative to market value, provided you bought the property at a deep discount. For instance, if a house is worth $100 000 and you acquired the deed for $15 000, selling it for $45 000 still triples your investment. In this scenario you make a 300 % return while freeing funds for your next deal.
Here is a sample comparison:
| Market value | Price paid at tax sale | Suggested sale price |
| $100 000 | $15 000 | $45 000 |
Selling at a discount appeals to buyers and shortens the time to closing. It also avoids the risk and expense of owning a vacant property longer than necessary.
Example timeline from purchase to sale
- Winning the tax deed – You submit the lowest acceptable bid at the auction and receive the deed once the redemption period expires.
- Inspect and clean – Visit the property, change locks if needed and perform the quick fixes listed above.
- Set a price – Research recent comparable sales to determine a fair but attractive asking price. Aim to sell for about three to five times your purchase price.
- Market the property – List the house on real‑estate websites, put up a sign, contact local investors or sell through a real‑estate agent. Highlight that the property is a bargain.
- Close the sale – Screen buyers for proof of funds, accept a reasonable offer and close quickly to release your capital.
Frequently asked questions
You receive your principal plus interest. Depending on the state, the interest rate can range from 16 % to 36 %.
Redemption periods vary by state. Some states allow only a few months, while others allow up to several years. Always verify the timeline before investing.
Tax liens usually take priority over mortgages, but there can be other encumbrances. Research local records for any additional liens or code violations before bidding.
If you do not wish to own the property, consider assigning your interest to another investor or list the property immediately after receiving the deed. Pricing it lower than similar homes encourages quick offers and frees your funds.
Final thoughts and next steps
Selling a tax deed property is about speed, not chasing every last dollar. By purchasing the property for pennies on the dollar, doing simple clean‑ups and pricing it attractively, you can realize strong profits. At the same time, you should always research properties, understand local laws and decide whether to hold or sell before bidding. If you are ready to learn more, explore our free resources for step‑by‑step mini‑courses and guides. You can also book a free call to speak with our team about buying your first tax deed property. We have more than 20 years of experience and complete multiple deals every month. Let us help you start your tax deed investing journey today.
