Drawbacks of Tax Deed Sales

Purchasing tax deed sales is a great method to get involved in the real estate industry. Additionally, it is also a very viable way to invest your money. Thousands of people all across the country purchase and sell tax deed sales as a means to support themselves. And in some cases, tax deed sales have made people earn millions of dollars.

And, even if you aren’t an investor, tax deed sales can still be of some benefit to you. Are you looking for a new home? If you are, tax deed sales can offer you great properties at lower prices.

However, before you begin to buy and sell tax deed sales, you’ll need to know about the drawbacks which are involved. Regrettably, the investing or buying tax deed sales procedure isn’t quite as simple as it appears to be. Below are listed a few drawbacks you should watch out for when you decide to look into tax deed sales.

1. Watch out for the so-called experts that think they know everything about tax deed sales. Although these people might have made a few transactions, it doesn’t mean that they know absolutely everything. These experts usually love to put information together on tax deed sales and try to sell it to the public at a cost. Of course, you might be able to get some useful tips from these people, but at the same time you will not be getting the best information. They will leave out all the drawbacks that go along with tax deed sales in order to make them sound more attractive; this is a way of helping themselves to make more profit.

2. Tax deed sales aren’t always of much value; many times they aren’t worth anything at all. More usually, valuable properties have a mortgage on them, which would of course be deleted from a tax sale. In this case however, the mortgage company will usually pay the taxes themselves in order to improve its losses. They will then own the property and it will no longer be for sale at the auction.

All tax deed sales aren’t however worthless. If you have sufficient time, you can buy tax deed sales, fix them up, and then resell them to the public at a cost. Most investors would rather stay away from this stage if they can.

3. In some cases a precious profit that doesn’t have a mortgage on it will reach tax deed sale status; there are indeed some rich people that simply don’t pay their taxes. At this point you might think that you might buy these tax deed sales and make a substantial profit.

The only problem this poses is that you will be competing against a lot of other investors. And, if you don’t have more money, the bids will soon enough be out of reach to you and you’ll be left with the lesser properties.

Tax deed sales can definitely be quite valuable to any investor. However, make sure that you bear these three tips in mind when you look into the subject. It is important to understand that tax deed sales aren’t always as easy as they may appear to be.


Ann Sommers is a contributing editor at RealEstatePropertyArticles.com. This article may be reproduced provided that its complete content, links and author byline are kept intact and unchanged. No additional links permitted. Hyperlinks and/or URLs must remain both human clickable and search engine spiderable.

Making A Tax Deed Sale Assessment

Investing in real estate can be an enjoyable time in a person’s life, as it can be the opportunity for you to make some money in very little time. But just as in any other investment that you try to make, when you purchase real estate as an investment you will be assuming a risk; that is why some people turn away from the industry altogether. This is particularly significant when it comes to tax deed sales. Despite the fact that you may be able to find some easy sources of income when it comes to tax deed sales, you will more than likely have to work in order to get what you would like.

Before deciding on whether to buy tax deed sales, you will first need to find out how to properly evaluate these properties. By gaining knowledge of how to do this, you will be able to enhance your chances of making a gain on every transaction. Evaluating properties isn’t too difficult, but there are a few tips you can bear in mind in order to better your situation.

1. When you begin to assess tax deed sales you will first need to realize that these properties are going, more often than not to need some work. This implies that you must be able to find out how much the property is worth, as well as how much money you think you will be able to sell it for. The difference between this, minus the cost of any repairs that you must make, will constitute your overall profit. On your first transaction you might get a little bit lost along the way, but as you get better at evaluating your tax deed sales you will find out how to quote more accurately the various prices and costs.

2. If you are looking at tax deed sales because you are looking into buying a new home to live in, you will have to check for an entirely different set of standards. The first thing that you must do is make sure that the tax deed sales you are looking at are sufficiently big to suit your needs. Therefore, if you have a large family why should you look into a two bedroom home?

Additionally to the size of the home, you might also want to look into the features that it offers. Such features as does it have a laundry room? Are there enough bathrooms? Is the backyard big enough for my kids to play in? These are all questions you mustn’t forget to ask yourself.

Also, bear in mind such aspects as the school district that the tax deed sales are located in, as well as the areas of access to the public transportation.

All in all, when you learn how to evaluate tax deed sales, you will be learning how to maximize your potential for profit.


Derek Greenfield is a contributing editor at RealEstatePropertyArticles.com. This article may be reproduced provided that its complete content, links and author byline are kept intact and unchanged. No additional links permitted. Hyperlinks and/or URLs must remain both human clickable and search engine spiderable.