Tax lien investing in Ohio can be a great way to earn attractive returns, but it does come with risks. In this article, we will explore the basics of Ohio tax lien investing, including the auction process, redemption periods, and costs. We will also look at tips for minimizing risks when investing in Ohio tax liens. Properly understanding the rules and mechanics is key to succeeding with Ohio tax lien investing. There should be multiple mentions of tax lien and Ohio tax liens in the article.
Ohio Tax Lien Auction Process Works Differently Than Most States
The process for Ohio’s tax lien auctions is different than most other states. In Ohio, tax liens are sold via a secret bid auction, rather than the more common open cry auctions. This means investors submit sealed bids, with the winning investor being the one who bids the lowest interest rate. This format favors large institutional investors who can submit many bids. Smaller investors may find it harder to acquire tax liens in Ohio auctions.
Redemption Periods and Tax Deed Time Frames In Ohio
In Ohio, property owners have 2 years to redeem delinquent taxes before the tax lien investor can acquire the property through a tax deed. However, in practice the process takes much longer, often 3-7 years before deed issuance. This is one of the longest redemption periods in the country. Investors must factor in this extended waiting period when calculating returns.
Ohio Tax Liens Carry Additional Costs and Fees
Beyond the auction price, investing in Ohio tax liens requires paying additional costs and fees. This includes lawyer fees, title search and filing fees, postal fees for notifications, and more. Investors need to carefully factor in these extra expenses when bidding in Ohio auctions.
Tips For Safely Investing in Ohio Tax Liens
There are a few tips to follow to safely invest in Ohio tax liens: 1) Partner with professionals familiar with Ohio’s processes. 2) Research property data like title records and ownership history. 3) Bid conservatively to account for long redemption periods. 4) Diversify across many small liens instead of a few large ones. 5) Understand all costs and develop return estimates accordingly.
Tax lien investing in Ohio can provide solid returns but requires an in-depth understanding of the complex rules and processes. By researching properties thoroughly, accounting for all costs, and bidding conservatively, investors can mitigate risks. Partnering with Ohio tax lien professionals is highly recommended to safely navigate the intricacies.