That’s a pretty broad question – one that should first be directed to your investment advisor to be considered under the umbrella of diversification.
From a legal perspective, tax deeds result when a landowner fails to pay local property taxes. After the passage of time and procedural steps, the government agency (usually a county within the U.S.) can take the property and resell it to pay the back taxes owed. Whether you should invest in a particular property depends upon the property itself, condition of its title and laws in the jurisdiction where you plan to invest. For the latter, I suggest conducting legal research to determine what the laws are where you live. You can use Legal.com’s Legal Research tool for this.
I ran a search on tax deed and found a lot of information including this cautionary message from Miami Dade County, FL:
There are certain risks associated with the bidding at tax deed sales. The Clerk makes no express or implied warranties or representation about the condition, marketability, existing or potential uses, title, outstanding liens, mortgages or other encumbrances which may survive the sale of the property, zoning regulations or laws that may affect current or future uses of the property, or existence of any conditions regarding any property and structures or fixtures thereon offered for sale by the Clerk.
Hope this helps,
— Dave Alden
Alden Law Group
Aviation – Bankruptcy
Sacramento, CA 95834
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