There are many different things you should have an understanding of when owning a commercial property. Being a part of the real estate world, you will need to be a bit of an expert in a bunch of different fields. Real estate is an interesting industry because it overlaps with so many different areas. There is law, money, codes, accounting, statistics,and more, and learning how they relate to the world of real estate can be daunting. Through time and research, you can learn most of the things you will need to know about the industry and all of its moving parts.
Real Estate Taxes
Like with most things, taxes apply to real estate. If you are the owner of any type of property you will likely be required to pay taxes on it. If a property owner does not pay the required taxes on their property, the land will be sold at an auction by the county. At the auction, the property will be considered a “tax sale.” A tax sale property is a property that is sold as a way to help make up for the taxes that were not paid on the property. Yet, within this there are two different types of tax sales. There are tax deed and tax lien sales.
The most important thing for you to know in working to avoid the tax sale process on your properties is that paying property taxes on all of your properties is essential. You can, in some cases, be granted an extension or payment plan on these taxes, but if you are unable to pay at all, the tax sale process will begin. The amount of time you have before the process begins varies, and there are two types of tax sales your property may undergo.
Tax Deed Sales
For simplification of tax deed sales, it is essentially when the county will sell the entire property possession rights to the investor. When bidding on a property that is a tax deed sale, you are bidding for the deed to the property. If a property is not having the taxes paid on it, the county will auction off the deed to the entire property, so whoever wins the bidding will become the new owner. Becoming the new owner of the property in a tax deed sale also means that you will be getting the property without the mortgages or liens or whatever else was attached to the house. This can be extremely lucrative.
Tax Lien Sales
A simplified version to understanding tax lien sales is when the county auctions their tax lien right on the property that allows people to bid on the tax debt for a return investment. So if you are bidding on a tax lien you are not placing a bid on the deed for the entire property. This is an important piece of information to understand. What you are actually doing would be considered as loaning the money the owner needs in order to pay for the taxes, so you do not own the property. However, by paying the money needed you would then get the first lien position on the title. This can be a great solution for everyone involved and is considered to be a great way to make an investment.
More About Tax Sale Process
Understanding the tax sale process can require a lot of time in researching what you are getting into, either as an owner or an investor. By having a trusted real estate team, like Landwin Commercial Real Estate, you are able to get a clearer picture of what the tax sale process is and how it would apply to the property you are looking at or the property you currently own. Commercial properties are a large investment, so you want to make sure that you have a full understanding of the process before you dive into it.
Having someone who is trained in such matters is a great way to take stress off your plate in a matter that is already stressful enough. Contact Landwin Commercial Real Estate today for more information on how to begin working with our skilled team with years of experience in the commercial real estate market.