Tax defaulted properties are properties where the homeowner has failed to pay their property taxes and the local municipality either sells the property via a tax deed auction sale or sells a tax lien certificate which can be converted to a tax deed if the prior owner does not redeem the property within the statutory redemption period. Colorado County tax lien sales are generally held between October and December every year. If you are looking for tax defaulted property deals in Lakewood, Colorado, you should check the county website for a list of properties that are available and the local newspaper for the sale information. The county treasurer conducts all tax lien certificate sales. Anyone can bid. The bids start out with the amount of the back taxes plus interest, fees and penalties. The highest bidder is awarded the tax lien certificate. Premiums on bids, which is the amount paid above the total advertised tax lien fee are not refundable and they do not earn any interest. Many counties such as Denver County, El Paso County- Colorado Springs, Adams County- Aurora, Jefferson County- Lakewood, and Larimer County- Fort Collins use online bidding.
Benefits of Purchasing Tax Defaulted Properties
You basically get to purchase property for pennies on the dollar because the market value of the property is generally substantially more than the back taxes including penalties and fees. So you are buying investment property with a built in equity. Former pproperty owners have the right to redeem their properties during the statutory three year redemption period by paying their tax delinquency, interest and any fees and penalties. If they do not redeem the property, then the buyer can apply for a tax deed by presenting their tax lien certificate and paying off any unpaid taxes. During the three year period, the municipality the buyer/investor a rate of return on your investment at 9% above the federal discount rate. So rates vary from year to year. Buying tax defaulted properties in Lakewood are safe and secure investments because you are buying them from the government, and the government pays you back the money. Counties need the revenue from tax lien certificate sales to run their public services such as schools, police and fire services so they want to keep property investors happy.
Buying defaulted tax lien properties is a great investment if you are looking for a deeply discounted property. Many properties are in good condition and some need repairs. You should do your due diligence and check out comparable property prices in the area before making a bid. You may also want to consult with a local Lakewood real estate attorney. Buying defaulted tax properties is a good way to afford a property in Lakewood that you may not otherwise have been able to afford. Tax lien certificates are becoming more and more popular because investors/buyers have realized the great rate of return you can get on your investment. There are not too many other investments that you can buy for pennies on the dollar so you should take advantage of purchasing tax defaulted property deals in Lakewood right now.