Is Tax Lien Investing Still Profitable? Tax Lien Investing is not the secret of the wealthy anymore. Do to late night infomercials and high priced investment seminars that tout buying tax lien certificates as a high yielding investment, more and more people are buying tax liens. As a result of this recent exposure to the general market, tax lien investing in some areas has become highly competitive. Is it still a profitable investment? It's true that it's getting tougher to buy profitable tax lien certificates. This is largely due to supply and demand. There are less tax liens available and more buyers in the market. At some of the tax sales that I have attended in New Jersey there are more bidders than there are liens for sale. There are fewer liens available for two reasons. First, it is very easy to get a low interest loan these days. Couple that with the increase in the value of real estate in the last 5 years and that gives property owners the incentive and the means to pay their taxes, even if they have to get a loan. With fewer liens available and more investors in the market, tax lien certificates are selling at lower interest rates and/or higher premiums depending on the state. In most states either the interest rate is bid down or the premium is bid up while the interest rate remains constant. New Jersey is rare in that first the interest rate is bid down and then the premium is bid up. Hence in New Jersey tax lien investing is not the highly profitable investment it once was. Judging from the premiums that institutional and private investors have been paying for tax lien certificates in the last couple of years, I would venture to say that they are seeing an actual return on their investment of 4% or less. This is not very good considering you can probably find a bank right now that will give you 4% on a one year CD. Perhaps as interest rates go up over the next year or two, institutional buyers will get smarter and less desperate for tax lien certificates and stop paying too much for them. In the mean time the best way to find out if tax lien investing is still highly profitable in your state is to attend a couple of tax sales and take note of who is buying and what interest rate liens are bid down to or how much premium is being paid for them. Be sure that you do this before you go out and buy somebody's high priced program on how to make a lot of money with tax lien investing. © 2005 Permission is granted to reprint this article in print or on your web site so long as the paragraph above is included and contact information is provided to the email provided. Joanne Musa works with investors who want to reap the rewards of tax lien and tax deed investing. She is the author of the Tax Lien Lady's E-books, Tax Lien Investing Secrets and Tax Lien Lady's State Guide to Tax Lien and Tax Deed Investing. For more information about Tax Lien Lady's E-books go to http://www.taxlienconsulting.com/sales/sales.htm. For more about tax lien investing e-mail MoreTips@taxlienconsulting.com. Tax  Net Inc, the parent company of “the Home Based Tax Preparer”, has developed a system where qualified professionals can work at home and provide better service at a lower price to the consumer. Tax Net Inc and all the divisions are proud members of the Better Business Bureau of Denver/Boulder, Colorado.    There are three divisions of the Home Based Tax Preparer. CPA Moms/Dads Tax Moms/Mr Tax Moms Next Day Tax Cash  Regulatory and Disclosure Information for the following web sites: www.cpamoms.com www.cpadads.com www.taxmoms.com www.asktaxmoms.com www.askcpamoms.com www.nextdaytaxcash.com We do not render or offer to render personalized investment advice, financial planning advice, tax planning, or tax preparation through this medium. This medium is limited to providing you with general information about services and provides a way for you to contact us. The information in this web-site is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, and does not purport to be complete and is not intended as the primary basis for investment or tax decisions. It should also not be construed as advice meeting the particular investment needs of any investor.  Any tax information communicated, shared, faxed or emailed to Tax Net Inc or any of their divisions is held in strict confidentiality.   This information is not used, sold or shared with any other business entity or individuals.