And it’s a niche that sees very few Canadians from African-Caribbean cultural groups taking part!
The fact is that all types of properties can be acquired for a fraction of their real value, through the tax sales process. They include agricultural, residential, commercial, and even waterfront properties. Tax sales occur when municipalities sell real estate to collect the property taxes owed to them. Typically, property owners have neglected to pay their taxes for more than three years. Some reasons for non-payment might be that the owner has died without a will; or has left the country, with no-one looking after the property.
Would-be investors might be surprised to learn that every month, at different places across Canada, there are tax sales occurring.
In the book, How To Buy Tax Sale Properties: A Canadian Guide, Jamaican-born author Beverly Browne has pulled together an abundance of facts on the tax sale sector. This relatively short, easy-to-read, book compiles details that show even a novice investor the necessary steps for being successful in the tender process.
The book is endorsed by The Urban Financial Services Coalition (UFSC) – Toronto Chapter. UFSC is a community-based not-for-profit organization comprised primarily of visible minority professionals in financial services. Committed to the message of financial literacy, the organization endorses the message of the book, which is simply to inform people of the steps involved in acquiring real estate through the non-traditional way of tax deed sales.
Tax sales allow an individual or company to bid for a particular property whose owner has fallen well behind on the taxes. The sales occur through auctions, where you can attend live sessions and bid against other people. More frequently, however, they occur through a tender process, where interested parties submit a bid and wait to learn who gets the winning bid. At the tender process, (which is the focus of the book) it’s not necessary to be present on sale date.
“Tax sales are legitimate investment opportunities that have been available for many years,” Ms. Browne says. “People first have to settle in their own minds the moral principles associated with profiting from someone else’s loss. Then they come to realize that once the property goes to a tax sale, someone other than the most recent owner is going to own the property after the sale is over.
“Having a winning bid at a sale is a non-traditional way to acquire real estate. With a little planning, ordinary people with limited funds can build a real estate portfolio that can provide future retirement income, help pay for their children’s education or supplement their immediate income.”
Even people without ethical concerns can be sceptical that you can actually own real estate through this process. But while they remain disbelieving, the minority of people ‘in the know’ about such sales, push ahead to keep abreast of what properties are available.
The key, Ms. Browne says, is to learn that these sales exist, and learn how to participate. Until now, comprehensive information on Canadian tax deed sales has been scattered.
In the book, readers will learn the process involved from research to bidding, the risks as well as the possible rewards, and how to know when and where tax sales are taking place. Although it gives information on Canada as a whole, detailed examples of past sales that occurred in Ontario are highlighted, along with winning bid prices. And because Canadians have an affinity with Florida as a winter getaway, the book also includes a chapter that gives details on Miami tax sales.
People who have read the book are pleasantly surprised by the examples of what actual properties sold for, in relation to the taxes owed. They like, too, that it shows examples of forms given out by the municipalities. There is also a list of extra resources where readers can find municipalities they might have a specific interest in, for future sales.
Readers of the book are advised to do their due diligence, so that if their bid is successful, they end up with a property they’re really happy with.
Andrea P. Kelly, of Andrea Kelly Law in Markham, adds these words of caution. “Before placing your bid, it is essential to have a lawyer perform and review a title search on your proposed property. This will highlight any deficiencies, which could disastrously erode any value you would have achieved by your investment. “
She adds, “Unfulfilled work orders, environmental or sanitation issues and outstanding mortgages, for example, can make your acquisition a nightmare. Also, since the municipality is not obligated to provide vacant possession to the successful bidder, you should consult with a lawyer as to legal means and the relevant timeframe to remove someone if they refuse to leave voluntarily.”
The first chapter of the book can be read for free at http://www.accessprofits101.com/newsite1/
How To Buy Tax Sales is available in both pdf and hard copy versions. You can buy the book from Amazon Canada:
The online PDF version can be accessed for less than $8.00 at http://www.tripleclicks.com/detail.php?item=240245p