Last Updated on September 1, 2025
Table of contents
- Why do market crashes and inflation matter for investors?
- What makes tax lien and deed investing a resilient investment strategy?
- Table comparing tax liens and tax deeds:
- How should you prepare for the next recession?
- Why act now?
- Steps to get started
- Common questions
- Further reading and resources
- Need A Hand??
Understanding Market Cycles, Inflation and Why Tax Liens & Deeds Remain Resilient
Real‑estate markets rise and fall, yet investors who prepare can still thrive. In this post, we explain why economic turbulence and inflation shouldn’t discourage you from investing in tax liens and deeds, and how to build a strategy that remains stable when the economy stumbles.
Why do market crashes and inflation matter for investors?
In the past six decades, wages in many industrialized countries have increased roughly tenfold while housing costs have climbed thirtyfold. When the cost of living outpaces incomes, fewer people can buy homes, credit markets tighten, and recessions follow. The U.S. federal debt was almost $37 trillion in August 2025, and headline inflation was about 2.7 % in July 2025. High debt and rising prices can lead to higher interest rates, making mortgages more expensive and pushing more owners into default. In such cycles, properties fall behind on taxes and become available at tax sales.
What makes tax lien and deed investing a resilient investment strategy?
By buying properties or liens at a low cost, you can handle market downturns better. We often get tax deed properties for 40–50% of their market value and sometimes as low as 10%. Even if real estate prices drop by 30–40%, the difference between what you paid and what you sell for helps you stay profitable. Tax lien certificates earn interest of 8–36% a year. If the owner pays back, you get your money plus interest; if not, you can take ownership of the property
Table comparing tax liens and tax deeds:
| Aspect | Tax Lien Certificate | Tax Deed |
| What you buy | The delinquent taxes; you do not own the property | The property itself, subject to redemption in some states |
| Profit source | Statutory interest rate or penalty paid by owner | Equity between purchase price and market value |
| Risk of owner redemption | High; if redeemed, you earn interest | Varies; some states allow redemption after sale (e.g., nine‑month period in Philadelphia) |
| Average discount | Not applicable (you recover taxes plus interest) | Often 40–90 % below market value |
| Exit strategy | Wait for redemption or foreclose | Sell, rent or hold for cash flow |
How should you prepare for the next recession?
How to prepare for the next recession
- Research your county
Keep a calendar of upcoming tax lien and tax deed auctions. If your state sells liens but you want deeds, research neighbouring states that hold deed sales and vice versa
- Perform due diligence
Visit or view properties online, check zoning, liens and title issues. Use free mapping tools to verify location and condition
- Build a portfolio
Spread your investments across multiple properties or certificates to reduce exposure. Small liens offer a safer entry point for beginners.
- Monitor laws
Redemption periods and interest rates vary widely. For example, some counties in Pennsylvania allow a nine‑month redemption period with a 10 % penalty; Georgia and Texas have similar laws. Consult county websites or statutes for up‑to‑date rules.
- Keep cash ready
Auctions move quickly and require certified funds. Having cash on hand lets you bid confidently
Why act now?
History shows that recessions create opportunity. During the 2008 crisis, property values fell sharply; those who purchased tax deeds at deep discounts profited when prices recovered. Current macro conditions—high debt levels, inflation and uncertainty about Social Security’s future (the Old‑Age and Survivors Insurance Trust Fund can pay full benefits only until 2033)—suggest another downturn is possible in the coming years. By starting today, you build experience and a portfolio before competition intensifies.
Steps to get started
- Attend local auctions. Even if you don’t bid, observe the process. Practice evaluating properties and setting maximum bids.
- Use our live training. In our monthly auction trips, over 80 % of attendees have purchased properties. We work side by side to help you learn, bid strategically and beat the competition.
- Implement an action plan. Set goals for the number of liens or deeds you want to acquire each year. Review results quarterly and adjust your strategy.
Common questions
- “Is it safer to buy tax liens or deeds?” Liens generally involve less risk because you’re lending money secured by the property; if the owner redeems, you collect interest. Deeds offer higher profit potential but require more research.
- “What happens if the owner redeems the property?” For lien states, you receive your principal plus interest or penalties. In redeemable deed states, the owner can redeem the property within a set period (e.g., 9 months in Philadelphia) by paying back the sale price plus a penalty.
- “How long does it take to get a deed after buying a lien?” It depends on the state’s redemption period. Some states have one‑year periods; others are longer. If the owner doesn’t redeem, you can start foreclosure after the period ends.
- “Do I need a lot of money?” Not necessarily. Certificates can start at a few hundred dollars. Deeds require more capital but still cost far less than retail property prices.
Further reading and resources
To explore related topics, see how we identify properties in our Driving for Dollars guide (internal article: Naturally). For those interested in joint ventures, our article on Naturally explains how partnering with experienced investors can accelerate your success. When citing national debt figures or program forecasts, consult primary sources such as the Congressional Budget Office and the Social Security Trustees’ report
Need A Hand??
We offer a Free Tax Lien & Deed Mini Course and a free strategy call to help you take the next step. Visit our free resources page to download the course and schedule your call. Our mission is to help create thousands of full‑time investors by providing hands‑on guidance and expertise. Join us on an upcoming auction trip, gain real‑world experience and start building wealth through tax liens and deeds.
