Zero Risk Real Estate: Creating Wealth Through Tax Liens and Tax Deeds

Protecting Your Tax Deed

If you acquired the property as a tax deed, you now own it. This is a whole different ballgame, and now you need to take specific actions to protect yourself and your position. It is a good idea to make sure that you have homeowner’s insurance lined up and placed on the property right away, even if it is still occupied by the previous owner or if there is a continued right of redemption. As the owner, you are now going to be liable for any losses incurred from that point forward. You also want to make sure you have personal liability insurance on the property included in your homeowner’s policy. The reason for this is you are most likely going to be showing the property to potential buyers and Realtors, and you will be hiring contractors to do work on the property. The last thing you need is for someone to whom you gave access to the property to fall and hurt themselves and then try to collect damages from you personally.

If the property is vacant, make sure to secure it with new locks and to board up windows if necessary to eliminate the chance of vandalism or other unwanted activity (vacant properties seem to be a magnet for the local teenagers to go to and throw wild parties). Insurance may be difficult or impossible to get on a vacant or abandoned property, but check around with multiple agents to find out your options.

If the property is occupied, you may have to initiate a legal court proceeding known as an eviction action to remove the occupants. ...