5 States With The Longest Tax Lien Redemption Period In 2024

Hey there, fellow tax lien investors, If you’re diving into the world of tax liens, understanding which states have the longest tax lien redemption periods can be crucial to your overall long term investing strategy.

These periods can significantly impact your investment strategy and returns.

Let’s explore which states have the longest tax lien redemption periods and what that means for you as an investor.

Understanding Tax Lien Redemption Periods

First, let’s break down what a redemption period is.

When you purchase a tax lien, the property owner has a set time to repay the delinquent taxes, plus interest, to retain their property.

This period varies by state and affects how long you’ll wait to see a return on your investment.

States with the Longest Tax Lien Redemption Periods

Some states have longer redemption periods, which can mean more extended waiting times but potentially higher interest earnings.

Here are the top five states with the longest redemption periods:

Nebraska

Image Credit: https://en.wikipedia.org/wiki/Flag_of_Nebraska

Redemption period: 3 years
Nebraska’s process gives property owners a substantial time to redeem their property.
This longer period means you might wait a while but can earn up to 14% interest per year.

South Dakota

Image Credit: https://www.amazon.com/South-Dakota-State-Flag-long-term/dp/B0C36Y8WMY#immersive-view_1720964454086

Redemption period: 3 years
In South Dakota, the lengthy redemption period provides a steady interest rate, though it requires patience from investors.

North Dakota

Image Credit: https://www.britannica.com/topic/flag-of-North-Dakota

Redemption period: 3 years
North Dakota follows a similar pattern, offering a 3-year period which can be advantageous for those who prefer long-term investments.

Kansas

Image Credit: https://www.worldatlas.com/articles/kansas-state-flag.html

Redemption period: 3 years
Kansas also has a 3-year redemption period.
The extended period allows for significant interest accrual, benefiting patient investors.

Utah

Image Credit: https://www.britannica.com/topic/flag-of-Utah

Redemption period: 4 years
Utah tops the list with a 4-year redemption period.
This lengthy period can be challenging but rewarding, especially with the potential interest earnings.

Detailed Analysis of Each State’s Redemption Period

Nebraska:

Nebraska offers a 3-year redemption period.
During this time, you can earn up to 14% interest annually.
The state’s specific laws ensure that the process is straightforward, making it a solid choice for investors looking for stable, long-term returns.

South Dakota:

In South Dakota, the 3-year redemption period is designed to offer a balanced approach for both property owners and investors.
The interest rate is steady, providing a predictable income stream for those willing to wait.

North Dakota:

North Dakota’s 3-year period is similar, offering consistent returns and a stable investment environment.
The state regulations support a clear and fair process, ensuring you know what to expect throughout the investment.

Kansas:

Kansas provides a 3-year redemption period, which can be lucrative for investors.
The extended time allows for significant interest accumulation, making it an attractive option for those who can manage the wait.

Utah:

Utah stands out with a 4-year redemption period.
While this is the longest among the featured states, the potential returns are substantial.
The state’s laws are designed to protect both property owners and investors, offering a secure investment opportunity.

Tips for Investing in States with Long Redemption Periods

Investing in states with longer redemption periods has its perks and challenges.

Here are some tips to maximize your returns:

Be Patient: Understand that longer periods mean waiting longer for returns.
Patience is key.
Diversify: Spread your investments across multiple states to balance your portfolio.
Stay Informed: Keep up with state laws and regulations to ensure you’re compliant and aware of any changes.

Final Thoughts

Investing in tax liens with long redemption periods can be rewarding if approached with the right strategy.

Nebraska, South Dakota, North Dakota, Kansas, and Utah offer unique opportunities for patient investors.

Do your research, diversify, and stay informed to make the most of your investments.

In my opinion, the best way I’ve found to learn is by doing and “failing forward” as they say. I bought my 1st investment property in 2020 during the middle of (you know what..cough..cough), and I had no clue what I was doing despite spending months researching how to invest in real estate.

But guess what? I did it.

And learned a ton of valuable lessons along the way!

So,If you’re truly interested in tax lien investing, consider subscribing to my newsletter and following along my journey from landlord to “leinlord” as a new tax lien investor.

As Leinlord grows, my goal is to provide a “behind the scenes” inside look at the tax lien auctions I participate in and thoroughly profile any properties that I win.

You’ll get to ride along with me as I walk through my risk analysis, deal structures, ROI calculations, bidding tactics, and exit strategies all documented for the world to see (even my L’s).

So please show your support and sign up for my newsletter OR if you are a Google Chrome user hit that “follow” button!

(screenshot instructions found on my about page:))

Additionally, if you’re interested in booking a consultation to talk tax lien strategy feel free to schedule a one on one here.

P.S. I am still fairly new to tax lien investing but willing to share what I’ve learned so far, so please keep that in mind before you book!

I’m not an expert… (yet)

Look forward to having you in the Leinlord community!

Sources:

Kansas – https://www.kslegislature.org/li_2012/b2011_12/statute/060_000_0000_chapter/060_024_0000_article/060_024_0014_section/060_024_0014_k/ , https://www.bucoks.com/502/Tax-Foreclosure-Sale-Information

Nebraska – https://www.nolo.com/legal-encyclopedia/what-happens-if-i-don-t-pay-property-taxes-in-nebraska.html , https://nebraskalegislature.gov/laws/statutes.php?statute=77-1902

North Dakota – https://www.okeeffeattorneys.com/foreclosure-rules-in-north-dakota/ , https://ndlegis.gov/cencode/t28c24.pdf

South Dakota – https://sdlegislature.gov/Statutes/10-25 , https://www.pennco.org/index.asp?SEC=1F1F85A9-9D3A-4C6B-A7D5-7B2F06FF88ED , https://sdlegislature.gov/Statutes/10-23

Utah – https://slco.org/property-tax/property-tax-sale/ , https://www.grandcountyutah.net/889/Back-Taxes-and-Tax-Sale , https://codelibrary.amlegal.com/codes/millardcout/latest/millardco_ut/0-0-0-512