Last Updated on September 8, 2025
Table of contents
Buying tax deed properties can be a great way to invest, but it takes careful research. This guide explains what to look for when buying tax deeds, using simple language so anyone can understand.
Why You Must Check Carefully
Before you bid on a property, you need to verify a few key things. Investors always look at property records, debts, local rules, and the physical condition. Skipping these checks can lead to unexpected costs or legal problems later.
Steps for Checking a Tax Deed Property
1. Look at the Neighbourhood
A good neighbourhood can make a property more valuable. Drive around and ask yourself:
- Do the streets and houses look cared for?
- Are there schools, shops, parks, and hospitals nearby?
- Are there signs of crime or neglect?
- Are there new roads or businesses being built?
A clean and stable area often means better future value.
2. Check the Outside Condition
You might not be allowed inside before the auction, but you can still look for problems. Check for:
- Damaged roofs, broken windows, or cracked walls.
- Signs of leaks, mould, or termites.
- Working water, electric, and sewer connections.
- Whether the property sits in a flood zone ora wildfire area.
- Any building or health code violations.
If possible, get an environmental report to see if there are any hidden hazards. Planning for repairs now helps you set a realistic budget.
3. Verify Ownership and Debts
A title search checks who owns the property and what debts are attached. Some debts, like federal tax liens, might stay with the property even after the sale. You might also need a legal action called a quiet title to clear the ownership. Consider getting title insurance to protect yourself from hidden issues.
4. Understand Zoning and Land Use
Every property is zoned for certain uses. Ask the county:
- What is the zoning classification (residential, commercial, etc.)?
- Are there any special rules, such as historic preservation or environmental restrictions?
- Is there a legal road or driveway to the property?
Knowing these rules prevents legal trouble and helps you decide how to use the property.
5. Know the Taxes and Costs
Calculate the full cost before you bid. This includes:
- Delinquent taxes and any fees charged by the county.
- Possible homeowner association (HOA) fees or special assessments.
- Estimated repair costs.
Have a maximum bid in mind and do not exceed it. Remember to budget for legal and inspection fees.
6. Check Who Lives There
Some tax deed properties are empty, but others may have owners or renters. If someone lives there, you might need to go through eviction procedures. Find out what the state law says about removing tenants or paying them to leave. Also check if any leases might survive the sale.
7. Learn the State Rules and Redemption Period
Rules for tax deeds vary by state. Make sure you know:
- Whether you are buying a lien (the right to collect unpaid taxes) or a deed (full ownership).
- How long is the redemption period?. This is the time the former owner has to pay the taxes and keep the property. It might be 30 days or several years.
- Whether you need to file a quiet title action before you can resell or refinance.
Knowing these rules helps you plan your timeline and costs.
8. Make a Plan and Manage Risk
Even when you know what to look for when buying tax deeds, you still face risks. Hidden repairs can be expensive. Some debts might not be cleared by the sale. Property values can go up or down. Auctions can be very competitive. To manage risk, research carefully, set a budget, and talk to experts like real estate lawyers or experienced investors.
Simple Due Diligence Checklist
| What to Check | Why It Matters | How to Do It |
| Title search | Confirms owner and debts | Check for mortgages, tax liens, and court judgments |
| Neighborhood | Shows future value | Visit the area; look for jobs, schools, and safety |
| Physical condition | Estimates repair costs | Look for damage on the roof, walls, or foundation |
| Zoning rules | Avoids legal issues | Ask the county about zoning and permitted uses |
| Taxes and fees | Reveals true cost | Ask about unpaid taxes, HOA fees, and extra charges |
| Occupancy | Affects your timeline | Find out if the property is vacant or has tenants |
| Utilities and environment | Prevents hidden hazards | Verify water and power connections; check flood zones |
| State rules | Guides your next steps | Learn about redemption periods and quiet title actions |
Frequently Asked Questions
A tax lien sale sells the right to collect unpaid taxes and interest. A tax deed sale gives you ownership of the property.
You can usually look at the outside and check local records, but you often cannot go inside. Look for visible problems like bad roofs or broken windows, and ask the city about any code violations.
The redemption period is the time after a sale when the previous owner can pay back the taxes and reclaim the property. It varies by state.
No. Some debts, like federal tax liens or city fines, may still be attached to the property. A title search will show these debts.
You can do research yourself, but many investors hire professionals to help with title searches, zoning questions, and legal advice.
Plan to pay unpaid taxes, repair costs, legal fees, inspection fees, and possibly eviction costs. Always add extra for unexpected expenses.
Final Thoughts
Knowing what to look for when buying tax deeds helps you avoid costly mistakes and find real opportunities. By checking the area, the condition of the property, the title, and the local rules, you can bid with confidence. Set a clear budget, seek advice when needed, and be patient. Good research today will save you money and stress tomorrow.
Join the Conversation
Jump into the video above and let us know your thoughts on buying tax deeds! Head over to our Facebook page to ask questions, share your insights, and tell us how this video helped you.
Knowing what to look for can save you from costly mistakes and set you up for long-term success. Make sure to watch the video for all the details!
Talk soon,
Dustin
