Investing in tax deed sales in Michigan can be an additional income-generating activity for people already investing in home foreclosures in the state.
Carrying out the two activities as investment endeavors is viable as both involve foreclosure of property. Tax deeds result from failure to pay residential property taxes while home foreclosures result from failure to make the monthly mortgage payments. Tax deeds are issued and sold by local governments such as counties while home foreclosures are undertaken and resold by lenders.
Additionally, tax deeds are oftentimes better investments than tax liens, particularly for investors already involved in handling and reselling properties. Buying a tax deed means obtaining full ownership right to the tax-delinquent property while buying a tax lien means getting the right to obtain the payment of the unpaid property tax plus interests and penalties.
There are cases when a tax lien becomes essentially a tax deed when the tax lien is not redeemed within a certain period and the tax lien buyer files a foreclosure case to take title to the property. Specifics on this however vary from state to state.
Tax deed sales and real estate foreclosures have been rising in Michigan and in other states because of extreme financial difficulties experienced by homeowners. Unemployment and loss of additional income sources are forcing property owners to miss their payments. Typically, food, health and young children’s education take precedence over all others when there is only little to spare.