Investing in Tax Liens and Tax Deeds in New York

Sale Details

New York Hybrid Tax – Both Tax Lien and Tax Deed
Lien: Yearly
Deeds: Varies

Redemption

6 Months – 2 Years

Bid Procedure

20% on Liens – Bid Down Method
Deed – Premium

Number of Counties: 62

Useful Links

Tax Delinquency – HPD

Investing in tax liens and tax deeds in New York offers unique opportunities for those looking to diversify their investment portfolio. With the potential for high returns and the ability to purchase properties at a fraction of their market value, New York stands out as a state where both tax lien and tax deed investments are possible. The low entry cost and the use of credit cards for these purchases, under certain conditions, make it even more accessible compared to other states.

Understanding New York Hybrid Tax Sale

New York offers a hybrid system where both tax lien certificates and tax deeds are available, depending on the county. Understanding the key differences and knowing where to focus your investments is critical.

Tax Liens: Yearly Investments

Tax lien certificates in New York allow investors to purchase the rights to unpaid property taxes. The owner remains in possession, but if they fail to repay the lien with interest (ranging up to 12%), the investor can foreclose and take over the property.

• Redemption Period: Typically between 6 months and 2 years, giving owners a limited window to pay off their debts.
• Bid Procedure: Investors bid down the interest rate, starting at 20%, which makes it competitive in popular counties like Nassau and Suffolk.

Tax Deeds: Varies by County

When purchasing tax deeds, you are directly buying the property due to unpaid taxes. New York’s tax deeds are attractive since they come mortgage-free, often allowing buyers to secure properties for much less than market value.

• Bidding Process: The premium bidding method is commonly used, driving the price up, but the potential for significant returns justifies this process.

Key Locations and Procedures

Nassau and Suffolk Counties:

Offer tax lien certificates with an interest rate of up to 12%. Nassau County holds its annual tax lien sale online, requiring a 10% deposit on the day of the auction and the remaining 90% within a month.

New York City Boroughs:

Tax liens are sold in bulk to institutions and are not available for individual investors.

Rest of New York State:

Tax deed properties are available for individual purchase, often through public auctions. Credit cards can be used for these transactions if you have a good credit score.

Steps to Start Investing in New York Hybrid Tax Investing

Research and Understand Local Laws: Each New York county has its own tax sales rules. Ensure you are familiar with these before investing.

Visit the Local Treasurer’s Website: Obtain information about upcoming tax sales, registration requirements, and auction dates.

Check the Auction Site: Many counties, like Nassau, conduct online auctions where you can view and bid on properties.

Read the Details: Understanding the sale schedule, parcel inquiry, and essential details is crucial. Contact the County Office For specific queries and further clarification.

Economic and Tax Advantages of New York Hybrid Tax

New York’s economy, while diverse, has been challenging for many property owners due to high property taxes. This creates a steady flow of opportunities for tax sale investors. Additionally, the state’s strategic location and robust legal framework provide a secure environment for investing.

Real Estate Market Overview

New York’s real estate market is varied, with high demand in urban areas like New York City and more affordable options in rural counties. Tax deed sales in these less-populated areas can yield significant returns, especially as the state continues to see an outflow of residents.

Fun Facts About New York

Population Trends: New York State has been experiencing a significant outflow of residents, with around 250,000 people leaving annually, according to the U.S. Census Bureau. This migration trend has contributed to a high number of abandoned properties, particularly in upstate areas.

Historical Property Taxes: New York has some of the highest property taxes in the nation, which is one of the reasons why many properties fall into tax delinquency.

Attractions and Economic Highlights

Popular Attractions

New York is home to a wide variety of attractions that make it an appealing place for residents and tourists alike. These include:

Cultural Sites: Museums, theatres, and historic landmarks like the Statue of Liberty and the Empire State Building.

Natural Beauty: State parks, the Adirondack Mountains, and the Finger Lakes region offer outdoor recreational opportunities.

Transportation Infrastructure

New York boasts a well-developed transportation network, including:

Highways and Roads: A robust system of interstates and state highways connects all regions.

Public Transit: Extensive subway and bus systems in New York City, along with Amtrak and regional rail services, ensure connectivity.

Airports: Major airports like JFK, LaGuardia, and Newark serve millions of travellers each year.

Economic Development

New York’s economy is diverse, with key sectors including:

Finance and Technology: Centered in New York City, these industries are among the most prominent in the world.

Agriculture: Upstate New York is known for its dairy farms, vineyards, and apple orchards.

Manufacturing: The state has a strong manufacturing base, particularly in pharmaceuticals and electronics.

Encouragement to Conduct Due Diligence

While the potential for profit is high, it’s essential to perform thorough research before making any investment. Understanding the local market, inspecting properties, and familiarizing yourself with New York’s specific laws will ensure a successful investment experience.

New York Hybrid Tax Investing Pro Tips

Leverage Credit Options: Use your good credit to take advantage of flexible payment options available in New York Tax Deed Sales.

Focus on Up-and-Coming Areas: Look for properties in counties where migration trends are reversing, as these may offer better long-term investment prospects.

Stay Updated on Local Laws: New York’s tax sale laws can change, so keeping informed about the latest regulations is crucial.

New York Hybrid Tax Process

The redemption period for tax liens is generally two years, but local laws may extend this for residential properties up to three or four years. For properties deemed vacant or abandoned, the period may be shorter.

Tax deed properties are sold without redemption periods, meaning the transfer of ownership is immediate upon auction purchase.

Cautions in Buying Abandoned Properties

Inspect properties beforehand if possible to avoid buying properties with severe damage.

Be prepared for potential repair costs due to issues like pipe breakage, flooding, and other water-related damages.

New York City Structure

In New York City, a borough is a unique form of administrative division. New York City comprises five boroughs: Manhattan, Brooklyn, Queens, The Bronx, and Staten Island. Each borough is a separate county with its own county government, and they are all part of the larger city. Each borough has its own distinct neighbourhoods, culture, and characteristics. Boroughs are often referred to as the equivalent of counties in other parts of the United States, but they are specific to New York City’s administrative structure.

Borough Breakdown

New York County: Manhattan

Kings County: Brooklyn

Queens County: Queens

Bronx County: The Bronx

Richmond County: Staten Island

Lead Paint Caution

Many properties in New York, especially those built before 1978, may contain lead-based paint. This is hazardous, particularly for children, and poses a liability for landlords. If you purchase a residential property, it is crucial to check for lead paint. The City’s Lead Program provides guidance on how to test for lead and make the property lead-safe.

Abandoned Properties in New York

New York faces a significant challenge with abandoned properties, largely due to high property taxes causing around 250,000 people to leave the state annually. These properties may have issues like pipe freezing, water damage, and general neglect, which can be costly to repair.

FAQs about New York Hybrid Tax Investing

Q: Can I use a credit card to buy tax liens or deeds in New York?

A: Yes, in many counties, you can use a credit card if you have a good credit score.

Q: What is the redemption period for tax liens in New York?

A: Typically, two years, but it can be extended to three or four years for residential properties.

Q: Are tax liens available for individual investors in NYC? A: No, they are sold in bulk to institutions.

Need help? Contact us for guidance.

Useful Links

Nassau County Tax Lien Sales
Suffolk County Tax Lien Auction

New York Hybrid Conclusion

Investing in New York’s tax liens and tax deeds offers high returns with relatively low risk, provided that due diligence is thoroughly conducted. The state’s unique features, such as the ability to use credit cards for purchases and the availability of mortgage-free properties, make it an attractive option for both new and experienced investors.

Ready to make your mark in New York’s tax sale market? Whether you’re a beginner or a seasoned pro, we can guide you through every step. Reach out to us today to learn more or book a consultation. Let’s unlock the potential of tax sale investing together.