The American housing market has done very little to recover since the bubble popped in 2007 and governments’ growing desperation to prevent mass default has led them to be extremely impatient with homeowners who have any amount of back-taxes. However, in the government’s desperation lies investor opportunities to make big profits by buying up real estate with tax liens. Business Insider reveals the growing trend:
…state and municipal tax offices scramble to meet their bottom line by aggressively pursuing unpaid property taxes––even if it means foreclosing homes to recoup a few hundred bucks.
As a result, annual tax lien sales have topped $15 billion per year, according to a report released by the National Consumer Law Center on Tuesday.
Take Florida for example, which has become the poster child for foreclosure since the housing crisis took hold in 2008. The state sold a whopping $1.8 billion of a total $2 billion in back tax liens in 2009 alone, according to the NCLC.
For savvy investors, tax lien sales are nothing less than a gold mine. Big purchasers––for example, debt collectors or large retail banks––can snap up the properties at deeply discounted rates, then sell them at a ridiculous profit.