Tax lien investors

Tax lien investors purchase the right to collect unpaid property taxes from property owners by buying tax liens at auction. When a property owner fails to pay taxes, the government places a lien, which investors can buy, effectively becoming a third-party guarantor of that debt. The investor earns interest on the amount paid if the owner pays back the taxes within a specified period. If the owner doesn't pay, the investor may have the right to pursue ownership of the property through a legal process called foreclosure. This strategy can generate income but involves risks and legal considerations.