In this post, we will go over what ws covered in the recent YouTube Video, Rhode Island Tax Sales Explained.
Rhode Island has five counties and is considered a hybrid state. The fact that it has five counties really doesn’t matter because their auctions are conducted at the city level and there’s 39 cities in the state of Rhode Island that hold annual tax sales. To their credit they have a 10% penalty for the first six months of the redemption. And then you get another 1% per month after that which could total up to 16%. The thing is that’s really nothing to do you any good because in Rhode Island, they bid down the ownership meaning you likely won’t receive 100% ownership in the property. This opens up a plethora of problems for the real estate investor.
Rhode Island Tax Sales Explained: More Info…
Bidding down the ownership is fraught with issues. The biggest issue of course is how you’re going to get the property 100% in your name after you spent money time and effort to do so. There are a few states that “officially” use “Bid Down the Ownership” on their books however Rhode Island is the only state I know of that actually uses this bidding process. The bottom line is this. If you don’t own all of the property that was the point in owning any piece of the property? Right?
The timing Varies by County or rather municipality as everything is done at the city level.
There’s no such thing as over-the-counter, (OTC).
And when you consider all that the idea that the lien might be superior to any other lien really doesn’t make a difference. RHODE ISLAND gets a 1/5. This is a state I personally would avoid.
Interested in Tax Sales in Another State?
Tax Sales investing is a niche that has the potential to be insanely profitable.
However, most investors do not have a deep understanding of this investing strategy.
Every state has a unique set of rules and regulations. There are some basic rules you need to understand as to how the process works. Generally, states will fall into one of three categories:
- Tax Lien States
- Tax Deed States
- Hybrid States
Hybrids are states who conduct their tax sales by selling tax deeds with a caveat. The deeds have a redemption period much like a tax lien certificate.
This map provides links to information for every state as well as Washington DC.