Invest in Paradise: Guide to Hawaii Tax Sales for Smart Buyers

Sale Details

Hawaii Tax Sales — Redeemable Deed – Yearly in June or Nov-Dec

Redemption Period

1 Year

Interest Rate / Penalty

1% Monthly Interest

Bid Procedure

Premium

Number of Counties: 4

Useful Links

Hawai‘i State Legislature

Owning a piece of paradise in Hawaii is a dream for many, but did you know that investing in Hawaii tax sales offers an opportunity to make that dream a reality? Hawaii’s unique tax sale system, based on redeemable deeds, allows savvy investors to either earn 12% interest or become the proud owners of valuable Hawaiian property. This article will guide you through the process, providing the essential details you need to make informed, strategic investments.

How Hawaii Tax Sales Work

Hawaii is a bit different from most places when it comes to tax sales. The state uses something called a redeemable deed system. Let’s break that down:

What’s a Redeemable Deed? When someone doesn’t pay their property taxes, the government can sell the property at a tax sale. But, in Hawaii, the original owner has one last chance to pay those taxes (plus a little extra) and get their property back. If they don’t pay within a year, the person who bought the deed at the sale becomes the new owner.

Bidding: The process is like an auction. Whoever offers the most money wins the deed. This is called a “premium bid.”

When Does This Happen? Each county in Hawaii holds these auctions once a year, but the exact dates can change. You’ll have to check with the county to know when it’s happening.

Interest and Penalties: If the original owner wants to reclaim their property, they have to pay the back taxes plus a 1% interest per month, which adds up to 12% in a year.

Important Notes: You can’t participate online, and there are no leftover properties you can buy afterward, known as over-the-counter sales.

Hawaii County-Specific Details

Hawaii is made up of four main counties, and each one handles tax sales a little differently:

Important to Know Before Investing in Hawaii Tax Sales Redeemable Deeds

Buying property in Hawaii sounds like a dream, but there are some things you should be aware of:

Check the Property First: Before you even think about bidding, use tools like Google Earth to see where the property is. Is it near homes and businesses, or is it in a risky lava zone? Lava zones can be dangerous and might not be worth your investment.

Understand the Bidding Process: In Hawaii, you have to be ready to bid against others. The highest offer wins the property, so it’s important to have a clear budget in mind.

Be Patient: After you buy a redeemable deed, you’ll have to wait a year to see if the original owner redeems the property. If they do, you’ll get your money back with 12% interest, but if they don’t, the property is yours.

Why Hawaii Tax Sale is a Good Choice Investing

Hawaii’s real estate market is strong, especially on islands like Oahu and Maui. Properties here tend to hold their value, making it a smart place to invest. Here are a few reasons why Hawaii stands out:

High Demand: Everyone wants to live in Hawaii! This means that properties, especially in popular areas, are usually in demand, which can lead to good profits for investors.

Great Returns: If the original owner redeems the property, you earn 12% on your investment. Not bad, right?

Less Competition: Since you have to attend the auction in person, there’s less competition from people bidding online, giving you a better shot at winning good properties.

Tips for Success on Investing In Hawaii Redeemable Deeds

Do Your Research: Always look up the property before bidding. Know what you’re getting into so you can avoid any unpleasant surprises.

Stick to Your Budget: It’s easy to get carried away at an auction. Set a budget, and don’t go over it, even if you really want the property.

Attend in Person: Since Hawaii doesn’t offer online auctions, you’ll need to be there in person. This also gives you the chance to see the competition and get a feel for the local market.

Frequently Asked Questions

Q: What happens if the original owner pays the back taxes?
A: If they pay during the redemption period, you’ll get your money back with 12% interest.

Q: Can I buy properties online in Hawaii?
A: No, you have to attend the auction in person. There are no online options.

Q: Is it risky to invest in properties near volcanoes?
A: Yes, properties in high-risk lava zones can be dangerous and may not be worth your investment. Always check the location first.

Hawaii is a great place for tax deed investing. The real estate market is strong, the returns can be good, and the islands are beautiful. Just make sure you do your homework and be ready to attend the auctions in person. Whether you’re new to investing or have done it before, Hawaii’s redeemable deeds could be a smart choice for you.

Interested in learning more about tax deed opportunities in Hawaii? Start your research today, and if you need any help, don’t hesitate to reach out.