Dealing With Your Tax Lien In Kentucky
So you’ve got a property with a tax lien on it? Don’t worry. You aren’t the first person dealing with this problem and sadly, you won’t be the last. Dealing with a tax lien can be a burdensome. It’s a particular challenging situation because you’re not just dealing with money, you’re also now working with the government. This can present it’s own challenges and government bureaucracy can have it’s own issues. Unfortunately, the government really doesn’t back down and in their defense, they really don’t have to. When we take residence within a certain government municipality we agree to pay taxes in return for amenities such as roads, schools, hospitals and infrastructure systems. However, when life happens and we find ourselves in a tough situation, the government doesn’t cut us any slack. This is what makes dealing with tax liens particularly challenging. Who has the money to buy tax liens in Kentucky anyways? How would you sell a property with liens in Kentucky? You may think this, but you’ve come to the right place!
We buy tax lien properties in Kentucky and we’ve encountered many owners have fallen into a tough situation to no fault of their own. It’s tough because the implication of a tax lien is due to late or delinquent payments for taxes; but most people don’t avoid paying their taxes on purpose. On top of that, as time goes on, the government starts to charge interest and can place additional penalties on the property.
The Kentucky department of revenue states, “At the close of business on April 15th, the tax bills are transferred from the sheriff’s office to the county clerk’s office. They are then known as a certificate of delinquency and represent a lien against the property in question. Interest begins to accrue on the total due at the rate of 1% per month. A 10% county clerk fee and a 20% county attorney fee are also added to the total due. The county attorney is required to send a notice by May 15th to the delinquent taxpayers and, if necessary, another notice is sent by June 15th.“
Tax liens are essentially the government placing a claim on a property for being tax delinquent. Unfortunately, many government municipalities will turn around and sell the tax lien certificate. They will hold an auction and sell the certificate. This is advantageous for the government as they can usually recoup their money at the time of the auction. Many investors buy tax liens at auction for a few hundred dollars, but they can be higher. Sadly, investors typically place higher interest rate terms on the lien and quickly spike the amount owed in short time. On the other hand, your mortgage company might pay the tax lien and then bill you. If you don’t pay your mortgage company, they can treat it is a delinquent payment and foreclose on your KY home. Either way, a tax lien can open up many opportunities for trouble.
If you’re getting letters from a government tax office or a private company in regards to taxes owed on a property, don’t worry. You’ll certainly want to take action to get the liens resolved, but we can help you avoid foreclosure in KY! Before you walk away from your property, consider a few of our practical solutions to alleviate tax liens in Kentucky and salvage your equity.
Solutions For Tax Liens In Kentucky
“Property For Rent In Kentucky”
If you have a tax lien against you or your property it’s important to take action. If you’re tight on funds like most of us are, you can opt to move out to a more affordable location and rent the property out. This can be a a great strategy as it will provide you with a potential for income from the rent that you can then use to pay off the tax lien. Of course, you’ll need to make sure the property is in good condition for a tenant to move in. Additionally, you’ll have to advertise the property to find a tenant. Many realtors will work to find you a tenant and place them for you in return for a flat rate or the first months rent. You can also work with a property management company to find a tenant.
Many people would rather rent a home than live in an apartment. A home usually provides more privacy and less communal areas. The demand for affordable housing is on the rise, so finding a tenant is a viable option.
On the other hand, we wouldn’t be providing the best advise if we only shared the benefits to this approach. There are some ugly truths about being a landlord in KY. By renting out your property in Kentucky, it does mean that you’ll be a landlord. Renters know they are not storing equity in the property so they don’t always take the best care of things. Tenants tend to drag their feet when minor things pop up. They only call when there is a problem. Although you’re renting your property to them, you’re still responsible for what goes on at the property and any issues that may arise. As the owner you’re responsible for providing a safe living environment.
Again, you can avoid dealing with these issues yourself by hiring a property management company, but then you have to manage the property management company. The quality of service that each property management company provides varies based on the vendor so conduct your own due diligence before you sign a contract or agree to a long-term agreement. Finally, the con with hiring a property management company is that they will take a portion of the rent money so you may still be left paying some bills which will slow the payment of the tax lien.
Lease To Own Your Property
If you have property that you are unable to afford and you don’t want to stress about tenants that will damage it, you can do a lease option and offer seller financing. The agreement that you put in place can have specific line items that serve your needs and the buyers. Essentially, the tenants will pay rent and store credit to purchase the property over time.
This is a good option because your renter is essentially the buyer. If you own the property free and clear or you have financing in place, you can keep it and you are now acting as the lender in this deal. You have been upgraded from a homeowner to the BANK. You are now allowing the tenant the opportunity to make a purchase and you’re carrying the note for them. Many times these type of transactions will behoove someone with a low credit score due to prior financial infractions. In this way you can get income from the rent and take care of the tax lien with the difference. Additionally, you’ll be helping someone make a transaction that institutional lenders wouldn’t approve. This type of transaction will actually help to improve the buyer’s credit for the future. This can be a win-win deal!
On top of the benefits you’re providing to the tenant, you can require a sizable down payment or deposit just like any other lease which in some cases might wipe out the tax lien. A deposit is required for any lease and property should be no different. Anywhere between $2,000-$5,000 is acceptable (or more, but we wouldn’t allow less). It may seem like a lot, but many buyers are happy to pay this kind of deposit as they could not get this deal through traditional lenders.
Another good thing about a seller financing is that you can charge a slight premium per month as the tenant is a buyer rather than a renter. They know you are doing them a favor by holding the note on their behalf while they pay it off. With this in mind, many are fine to pay a slight premium per month. Finally, since the tenant is aiming to purchase the property, they usually don’t tear it up like a renter because it will ultimately be their property if they buy it. We recommend that you make the tenant responsible for maintenance and trash removal in the lease agreement. This is fair as the proper is essentially meant to be theirs once they make all payments per the lease agreement.
The downside to this route is that you have to find a tenant willing to do a lease option. This isn’t that hard and you can even outsource this job to a realtor that will usually charge a flat rate or the first month’s rent. Another con associated with this plan is that if the renter stops paying the monthly rent, they are leasing the property so they have what is called an “equitable interest” in the property. Therefore, in Kentucky, you cannot simply evict them. You have to go through the Kentucky foreclosure process with the tenant. In Kentucky, foreclosure is a judicial matter rather than a civil one, meaning that you’ll have to get lawyers involved and go through the courts to get anything done. This can drag on for months or potentially years depending on all of the circumstances. (We help people avoid foreclosure in Kentucky, but that’s more for the tenant).
If you’re not interest in renting or leasing out your property, you may consider selling it. In many cases you can sell the property and pay off your debts as well as the lien. However, the shape or condition of the property will certainly dictate the price that you are able to garnish from the sale. You can list your property with a realtor in Kentucky to get the highest possible price, but agents will take a commissions (6% of the total sale) and they typically want the property in good shape to list it. On the other hand, if you don’t have the funds or energy to fix up your property you can sell your house as-is.
It’s rough putting time, effort and resources into fixing up a place only to break even. Unfortunately,, that is often what happens when we take on projects that we shouldn’t. You can avoid the stress and heartache by selling your property as-is.
Who Buys Property In Kentucky With Tax Liens?
We buy property in Kentucky with tax liens! Unfortunately, to many, the lien is too much to deal with. On top of that, many companies start hounding someone with a tax lien and it borders on harassment. We hate this practice and we don’t reach out to those with tax liens. We actually just help people that want to work with us. That’s right! We don’t prey on those that need help, but rather work with them to figure out the best solutions for their tax lien and property.
Believe it or not, there are many individuals and companies that buy tax liens in Kentucky. As mentioned above, many real estate investors and “cash for houses” companies purchase tax liens. They specialize in dealing with these issues and bringing a property back to it’s full potential. You may consider selling your tax lien in Kentucky to a cash buyer (like our company: We Buy Property In Kentucky).
We offer a great way to get cash for your KY home and move on without hassle! We provide our clients with funds to get their next home and save their credit in the process. Whether you choose to work with us or not when dealing with your tax lien in Kentucky, we hope you’ll do your own due diligence on those that you work with. We are transparent and honest. We encourage you to learn about us, and review the legitimacy of our company.