Why Invest in New Jersey Tax Liens? Top Benefits Explained

Sale Details

New Jersey Tax Liens – Standard: Yearly; Accelerated: June or Dec

Redemption Period

2 Years

Interest Rate / Penalty

18% + 2%-6% Penalty and 8% – 18% on Subs Depending on the Amount

Bid Procedure

Bid Down the Interest Rate + Premium

Online Auction

Some

Over the Counter

Yes

Number of Counties: 21

Useful Links

NJ Treasury Taxation Division

Are you tired of the same old investment options? it’s time to look at something different. Agree? Well, this is what you are looking for!

New Jersey tax liens offer a unique way to grow your wealth and help local governments recover unpaid property taxes. You don’t need to deal with tenants, renovations, or property management; it’s just a path to earning high interest. Curious? Let’s explain why New Jersey might be the perfect place to start.

What is a Tax Lien Certificate?

In New Jersey, when a property owner doesn’t pay their property taxes, the local government can sell a tax lien certificate of that property. By buying this certificate, you’re covering the owner’s unpaid taxes. In return, you get paid back with interest when the owner finally settles their debt.

Key Points About New Jersey Tax Liens

Type of Tax Sale:

○ New Jersey deals in Tax Lien Certificates.

Interest Rate:

○ You can earn up to 18% a year on your investment, plus an additional 2% to 6% penalty.

Redemption Period:

○ The property owner has 2 years to pay you back with interest.

How Auctions Work:

○ Auctions start with an 18% interest rate. If more people are interested, they’ll bid the interest rate down. Once it reaches 0%, bidders start offering extra money (a premium) to win the lien.

Online Auctions:

○ Some counties allow online bidding, so you can participate from anywhere.

Over-the-Counter (OTC) Liens:

○ If a lien doesn’t sell at auction, you can buy it directly from the county.

Why Invest in New Jersey Tax Liens?

1. High Returns with Simple Interest
   • New Jersey offers one of the highest interest rates for tax lien certificates in the country. At 18% per year, your money can grow faster than with many other investments. The rules are clear, so you know what to expect.
     
2. Safe Investment with Property as Backup
   • Your investment is secured by the property itself. If the owner defaults, you could end up owning the property without a mortgage.
     
3. Lots of Opportunities
   • New Jersey has 21 counties, each offering many tax liens. Whether you prefer busy areas like Bergen County or quieter places like Sussex County, there’s plenty to choose from.
     
4. Convenient Auctions
   • New Jersey holds tax lien auctions throughout the year, and many are online. This makes it easy to participate no matter where you are.

How Do the New Jersey Tax Lien Auctions Work?

The auction process is easy to follow:

1. Start High:
   • The auction begins with an interest rate of 18%.
     
2. Bidding Down:
   • If more than one person wants the lien, they will offer to take a lower interest rate. It can go as low as 0.25%.
     
3. Premium Bidding:
   • If the interest rate hits zero, the bidding continues, and people will offer a cash premium to win the lien.

Pro Tips for Investing in New Jersey Tax Liens

While tax liens can be a great way to earn money, it’s important to do your homework:

 ⦿ Check the Property: Always try to look at the property linked to the tax lien. This helps you avoid surprises later.

⦿ Plan Ahead: Have a clear idea of what you’ll do with the property if you get it—whether you plan to sell it, rent it, or keep it as an investment.

 ⦿ Learn the Process: Make sure you understand how foreclosure works if the property owner doesn’t pay up. This is crucial if you might end up owning the property.

 ⦿ Start Small: If you’re new to this, start with a smaller investment to learn how everything works.

 ⦿ Attend Auctions: Try to attend an auction in person If you can. It’s a great way to get a feel for the process.

 ⦿ Get Expert Advice: Talk to a real estate attorney or a tax lien expert, especially if you’re new to investing in tax liens.

Why New Jersey Tax Lien is a Great Choice for Investors

New Jersey’s tax liens offer high returns and a safe, government-backed investment. The process is clear, and the potential to end up with a mortgage-free property makes it even more attractive.

New Jersey Tax Lien Investing FAQs

Q: How often are tax lien auctions held in New Jersey? A: Auctions are held annually in each county, but the exact dates can vary. Some counties hold multiple auctions throughout the year.

Q: Can I participate if I don’t live in New Jersey? A: Yes! Many counties offer online tax lien auctions, so you can join in from anywhere.

Q: What if the property owner never pays off the lien? A: If the owner doesn’t pay within 2 years, you can start the process to take over the property.

Q: Are tax lien certificates a good investment? A: Yes, they can be very profitable. New Jersey tax lien certificates offer up to 18% interest, which is one of the highest rates in the country. Just make sure you do your research.

Interested in tax lien investing in New Jersey? Explore our FREE resources or schedule a one-on-one mentoring call for personalized guidance. Start today and see what tax liens can do for you!