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18- Tips for Purchasing Land at Tax Auction

In April of 2017, I purchased my first piece of land at a county tax auction. I had previously searched for years using every (traditional) method I could find. Two years after purchasing at my first auction, here are my tips for those seeking to do the same:

  1. Know your auction type.

    At county auctions, local tax collectors sell either tax deeds (for properties) or tax certificates (for the right to pay taxes and potential to own the property in the future). The rules for each type of sale vary by state. Homestead.org explains both the sale types and the basic rules by state. These rules will help you understand the risks as well as the pre- and post-auction work required to make an informed purchase.

  2. Bidding is the smallest tip of the iceberg.

    While I won my property in about two minutes at the auction, the most important part of the process was the research. In addition to the weeks of auction research I already described, I used Google satellite maps to get a sense of: property, topography, shape and identifying features; the neighbors, their proximity and how they keep their property; neighborhood layout, privacy and sight lines and where and how I might build; and distances to good grocery stores, hospitals, libraries and fire stations. I also researched the property’s and former owner’s legal history at the county clerk’s office and, while on property drive by’s, looked for signs of tenants, squatters and condemnable buildings. In the end, I spent over a hundred hours researching auction properties.

  3. Plan a modest purchase price.

    Once you’ve determined how much cash you have for auction day, look for properties that are only what you need and cost a portion of what you can afford. Because you are not allowed to walk, survey, test, or inspect auction properties, it’s difficult predict the costs of owning and using your land. A year and a half after my $2,800 land purchase, I’ve spent $4,377 on improving and maintaining it:

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Given that a quiet title suit (to confirm my clear title) may cost $1,000, I could easily spend another $2,000 over the next year without making any land improvements. It’s important not to spend all your cash at the auction because the cost of owning land does not end with purchase.

4. Tax auctions do not need to be a last resort.

I searched for property for four years before considering my local tax auction. For years, I thought auction properties were all risk with very little opportunity of return. But what I learned during the process was that the work required to make a wise purchase not only left me confident in my purchase but taught me about my county, neighborhood, neighbors and the history of my property. And it more than paid off because I bought my land for 10% of its value, drastically reduced my cost of living and exponentially improved my quality of life. .

While small, simple living is on the rise, finding affordable land is still a common roadblock. If you are looking for land, what has been your biggest hurdle? Have you overcome it? If so, how? Let’s share what we learned in the comments below and hopefully make it easier for each other.