Tax Lien Investing

Tax lien investing involves purchasing the right to collect unpaid property taxes from homeowners. When a property owner fails to pay their taxes, the government may auction off a tax lien on the property. Investors buy these liens and, in return, receive interest or penalties when the owner eventually pays their debt. If the owner doesn't pay, the investor may have the opportunity to foreclose on the property. It offers a potential for high returns, but also involves risks, such as the possibility of not recovering the investment if the property is not redeemed.