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Tax Certificates - High Returns and Low Risk
by Robbie Davis
In the current economy, most investors are searching for investment strategies that will work for their investment needs. Many investors enjoy spreading their risk over a large number of investments. This is also known as asset allocation. This strategy works quite well with Tax Certificate investments. Some are valued as little as $2.00 for a small lot to as much as hundreds of thousands of dollars for apartment complexes, office complexes and shopping centers. One of the best ways to spread your risk is by setting high and low boundaries on the amount you want to pay for each Tax Certificate and to set the number you wish to invest in during a given time frame. An example would be someone investing $100,000.00. This investor may want to buy 200 Tax Certificates -- each at between $400.00 to $600.00 per certificate. This would limit the exposure of any given certificate to a fraction of a percent. You, as the investor, should decide on the interest rate you want to earn for each Tax Certificate. Many states allow the investor to earn up to 18% annually on each Certificate. These Tax Lien Certificates will pay the investor's money back, along with the stated interest rate, if the property owner pays his/her property taxes. Most property owners will pay their property taxes, but many will not and this allows the investor to apply for a Tax Deed on the property, get possession of it and sell it for a much greater profit. This strategy limits the investor's exposure to any given Certificate and gives a much steadier investment return to the investor.