Real estate tax sales in Baltimore, MD, play a key role in helping the county government recoup tax revenue lost due to property owners defaulting on their tax payments. Baltimore mainly has two types of tax sales: tax lien sales and tax deed sales. These sales present an excellent chance for investors to make a secure and often advantageous investment with little market risk.
In a tax lien sale, what the county government in Baltimore does is sell the right to the tax lien on a property. Investors are bidding on something other than the property itself but on the unpaid tax debt. Essentially, the investor is lending money to the property owner to cover these taxes. Public sales, like auctions, are held by the county where these liens can be bought.
After buying a lien, the investor gets the top spot in the lien position on the title. This is crucial because it means the investor's claim is prioritized over almost all other private liens, except for state tax liens. Investors can look forward to earning lucrative interest rates, often between 16 to 24 percent, when the property owner settles the lien.