Tax liens are financial instruments issued by state governments, counties, cities, and other government entities to collect property taxes. When an individual or company fails to pay the taxes they owe, a lien is placed on their property as a security measure. This lien creates an opportunity for investors looking to make money from tax-defaulted properties. Here are some of the positives of investing in tax lien properties.

1. Lower Assessed Value
Most tax lien properties have a considerably lower assessed market value than the mortgage debt owed. This means that the amount invested by the investor in purchasing the lien is less than what most people have to pay for a comparable home or other non-defaulted property.

2. High Rate of Return
The rate of return on tax lien investments is generally high, often between 8 and 25 percent. This means that the money returned to the investor will be relatively higher than other investment opportunities.

3. Low Risk
The risk associated with tax lien properties is lower than other investments. This is because the lien is backed by tangible assets and can be sold off to repay the investor if the property owner does not pay the lien in full.