How to Avoid Mistakes at Tax Deed Auctions
If you plan to invest in property, you have to gather all the information around it and be prepared when you get to the actual auction. There are many people at the tax deed auctions, and a lot of them have not done their home work about the properties, and they cannot expect to get great deals out of it. It is very risky if investors don’t research. Use the following tips in order to reduce the risks when investing at tax deed auctions.
Get as much information as you can before bidding at a tax deed auction and avoid potentially costly issues. You can get valuable info while inspecting the neighborhood and the actual property in order to determine the real value. You probably won’t be able to see the interior of the property, but you can visit the county assessor’s office and obtain information such as: the number of bedrooms, bathrooms and other rooms, and total square footage of the real estate and other specifics.
It is important to see the property yourself because while some homes look good on paper, when you see the property in reality, it can be a total disaster. Is not that the intention of the organizers of the auction is to lie, but sometimes when a house is unoccupied for a longer period, it can get vandalized. Sometimes the county even demolishes the real estate for safety reasons.
Another case is when a property owner does not have available resources to properly care for the property and you could end up with an unusable real estate that with extensive repairs and upgrades to its structure to be done before you’ll be able to rent it or sold it.
You can hire real estate lawyer for a title search which will reveal if the home has other liens that need to be addressed in order for you to gain clear title to the property.
Less risk with residential properties
When investing in tax deeds, you either invest in a residential or in a commercial property. Beginners in tax deed investing should choose residential properties because they come with less risk. The best choice is to go with land improved with a structure or just land only. There is bigger competition for the improved residential properties. Even so, it is your best option.
Get to know the bidding process
You should get to know all the specifics of the bidding process in the area where the property you are bidding on is located. Different states have different rules. Some of them start the bidding with a minimum amount from where investors bid the price up and the one that is willing to pay the most price wins. Other states require you to bid the interest rate of the property down and now the lowest interest rate will win the auction.
Once you get all your facts straight, enter the bidding arena and get yourself a good deal!