McLennan County, Texas Redeemable Tax Deed – A Complete Guide for Investors

Introduction

McLennan County sits in the heart of Central Texas and is best known as the home of Waco. The county’s location midway between Dallas and Austin makes it a busy economic center with a mix of urban and rural lifestyles. Investors are often attracted to the county’s tax‑foreclosure auctions. These sales allow local governments to recover delinquent taxes and give buyers a chance to obtain real estate at a discount. This article explains how McLennan County conducts its tax‑deed auctions and what investors need to know before bidding. It covers auction dates, registration, bidding rules, redemption periods, due‑diligence tips and more.

What Is McLennan County’s Tax Deed Investing?

Texas is a “tax deed” state. When property owners become seriously delinquent on property taxes, local taxing units foreclose on the lien and sell the property at a public auction. In McLennan County, the constable conducts these auctions. The winning bidder receives a sheriff’s deed and becomes the new owner, subject to the former owner’s right of redemption. Since the county sells tax deeds rather than tax lien certificates, investors are essentially purchasing the property rather than buying a lien. However, the former owner can redeem the property by paying the auction price plus a premium within a specified period. Understanding these rules is essential before bidding.

Important Details

Item	Details
Tax Sale Type	Redeemable tax deed – the constable sells tax‑foreclosed properties; the buyer receives a deed subject to redemption.
Typical Sale Date	Auctions are held on the first Tuesday of the month; the constable posts the sale list 21 days before each sale. In practice, McLennan County often holds sales every other month depending on available properties.
Redemption Period	Six months for non‑homestead or non‑agricultural property; two years for homestead or agricultural property.
Interest/Premium	25 % premium if redeemed within six months or during the first year of a two‑year redemption; 50 % during the second year.
Bid Procedure	Opening bid equals delinquent taxes and costs. For courthouse sales, the highest cash bid wins. Online GovEase auctions start at the minimum bid with $100 increments and allow pre‑bidding.
Deposit	Bidders registering through GovEase may need to place a deposit depending on county rules; registration must be completed at least 24 hours before the sale.
Registration	Bidders must create an account on GovEase and upload all required documents. In‑person bidders register on‑site.
Sale Location	The constable conducts sales on the steps of the McLennan County Courthouse at 501 Washington Avenue, Waco, starting at 2:00 p.m. Central Time; online sales take place on GovEase between 10:00 a.m. and 4:00 p.m..
Contact for More Info	McCreary Veselka Bragg & Allen (MVBA) law firm at (254) 756‑7755. For resale properties or trustee lots, contact Waco Property Manager Kendra Allen via [email protected] or call (254) 750‑5672. Spanish speakers can email Julia Walker at [email protected].

Fun Facts About McLennan County

• Growing population: McLennan County’s projected 2025 population is about 271,947 residents. The median age is about 34 years.
  
• Economic specialties: The Central Texas region, which includes McLennan County, specializes in utilities and government/education services. Major employment sectors include restaurants, educational services, health care and retail.
  
• Household income: Median household income in 2024 was around $63,888. The Texas Comptroller’s Central Texas report noted an earlier median of $55,747, showing steady wage growth.
  
• Right of redemption: Texas law gives previous owners a chance to redeem tax‑sold property. For non‑homestead property, redemption must occur within six months; for homestead or agricultural land, redemption can occur up to two years and includes a premium.
  
• Trustee properties: If no one buys a parcel at auction, it is struck off to a trust managed for the benefit of McLennan County, Waco ISD and the City of Waco. After the redemption period, these properties may be sold through the city’s property management office.
  

Attractions & Economic Highlights

McLennan County offers more than investment opportunities. The county seat of Waco hosts unique attractions such as the Cameron Park Zoo, the Dr Pepper Museum and the Waco Mammoth National Monument. Outdoor lovers enjoy the Brazos River, Lake Waco and more than 400 acres of parks. Visitors can walk along the historic Suspension Bridge or explore art and music venues downtown.

Transportation links strengthen the local economy. Interstate 35 passes through Waco, connecting the county to Dallas, Austin and San Antonio. Waco Regional Airport offers flights to Dallas‑Fort Worth, and the county has rail connections via the BNSF Railway and Amtrak. Major employers include Baylor University, healthcare systems, manufacturing plants and logistics firms. Restaurants, retail shops and educational institutions provide thousands of jobs, giving the area a resilient and diversified economy.

Why McLennan County Is Ideal for Tax Deed Investors

The county’s central location and growing population create demand for housing and commercial space. Steady employment in education, healthcare and utilities supports a stable real‑estate market. Compared with large metro areas, property values remain affordable, allowing investors to acquire tax‑foreclosed property without enormous capital. Texas’ statutory premiums of 25 % to 50 % on redeemed properties mean investors can earn a high rate of return with limited risk. These factors make McLennan County a promising place for tax‑deed investing.

Auction Process for Tax Lien/Deed Sales

McLennan County auctions are conducted by the county constable or an online platform. Here is how the process works:

How the Auction Works

1. Notice of Sale: At least 21 days before each sale, the constable posts a list of properties on the MVBA website and publishes a notice in the local newspaper. The list includes legal descriptions, account numbers and minimum bids.
   
2. Registration: Bidders must register. For online sales using GovEase, create an account, select McLennan County and upload the required documents. Registration must be approved at least 24 hours before the auction. In‑person bidders register at the courthouse on the day of sale.
   
3. Auction Day: Traditional sales occur on the first Tuesday of the month at 2:00 p.m. on the courthouse steps. Online auctions open at 10:00 a.m. and close at 4:00 p.m.. Each parcel opens for bidding for three minutes on GovEase.
   
4. Bidding: The opening bid equals the delinquent taxes, penalties, interest and court costs. In online auctions, bids increase in $100 increments and bidders may set an overbid or pre‑bid amount. In‑person sales follow a live auction format; the highest cash bid wins.
   
5. Payment: Winning bidders must pay the full amount immediately at an in‑person sale, usually via cash or cashier’s check. For online auctions, payment is due by 4:30 p.m. the next business day via wire transfer. Failure to pay results in penalties and may bar future participation.
   
6. Deed Issuance and Redemption: Once payment clears, the constable issues a sheriff’s deed. However, the previous owner retains a right of redemption: six months for non‑homestead property and two years for homestead or agricultural property. The redeemer must pay the auction price plus a statutory premium of 25 % in the first year (or within six months) and 50 % in the second year for homestead property.
   

Post‑Auction Costs: Buyers may be responsible for current‑year taxes, code enforcement liens or municipal utility fees. GovEase warns that post‑judgment taxes and other liens can exist, so due diligence is important.

Maximum Potential Returns and Expected Returns on McLennan County Tax Deeds

Investors in Texas tax‑deed sales can earn attractive returns in two ways. If the former owner redeems the property during the redemption period, the investor receives back the auction price plus a premium of 25 % or 50 %, depending on timing and property type. Annualized, a six‑month redemption with a 25 % premium equates to approximately a 50 % annual return. For a homestead redemption in the second year, the 50 % premium yields a lower annualized return but still beats many traditional investments. If the property is not redeemed, the investor acquires real estate at a discount, which can be renovated, rented or resold for a profit. Returns vary based on market conditions, property location and resale value, but diligent investors often achieve double‑digit annual yields.

Open to All Investors / Foreign Investor Participation

Texas does not restrict buyers based on residency or citizenship. Investors from anywhere in the United States or abroad can participate in McLennan County’s tax‑deed auctions, provided they complete registration and satisfy payment requirements. Online auctions through GovEase simplify participation for out‑of‑state and international bidders, and bidders can pre‑bid or watch live bidding. When a foreign investor wins a property, they must comply with federal law governing ownership of U.S. real estate and may need to obtain a taxpayer identification number. Otherwise, the process is the same for domestic and international buyers.

Understanding the McLennan County Tax Sale Process

The sale process is straightforward but not risk‑free. All properties are sold “as is”. The county does not guarantee clear title, and title insurance may be difficult to obtain until the redemption period expires. Investors should plan for quiet‑title actions after the redemption period to clear the deed and facilitate resale. Because parcels may have tenants, structures needing repair or code violations, out‑of‑area investors often hire local agents to inspect properties prior to bidding.

Importance of Due Diligence

What Due Diligence Entails: Before bidding, research the property address and legal description. Use the McLennan County Appraisal District search to verify ownership, assessed value and property characteristics. Visit the property, check for occupancy and examine exterior condition. Contact the city’s planning and inspection departments to confirm zoning, utility availability and building restrictions. Run a title search to identify liens or encumbrances. Review court records to confirm the status of the tax suit. For online auctions, read all documents on GovEase and note any special conditions.

Risks of Skipping Due Diligence: Skipping research can lead to unpleasant surprises. You might buy a property landlocked by other parcels, a lot with no access to water or sewer, or a structure condemned by code enforcement. Hidden liens or unrecorded assessments could require additional payments. If the former owner redeems, your only profit is the statutory premium; if the property is unmarketable, you may incur holding costs without a clear exit strategy. Thorough due diligence reduces these risks and helps you budget for repairs and legal fees.

Buying Over‑the‑Counter (OTC) Deeds in McLennan County

Not all properties sell at auction. When no bidder offers the minimum amount, the property is struck off and deeded to a trust managed by McLennan County, the City of Waco and Waco Independent School District. After the redemption period, these properties are offered for sale by the City’s property management office. Buyers interested in over‑the‑counter (OTC) properties can contact the property manager to inquire about available lots. OTC purchases typically require a sealed‑bid or direct‑sale process. The buyer pays the set price plus closing costs and, in return, receives a deed without a bidding competition.

Benefits of OTC Purchases

OTC deeds allow investors to avoid the pressure of an auction and choose properties more carefully. Prices are generally lower than market value, and there is no need to bid against others. The redemption period has usually expired, so the buyer receives clear title upon closing. OTC properties may require renovation or have zoning limitations, but they can be an excellent way to build a portfolio with minimal competition.

Why McLennan County Is a Top Choice for Tax‑Deed Investors

Economic and Tax Advantages

McLennan County’s economy is anchored by education, government and healthcare. Stable employment and a young workforce keep housing demand strong, while property values remain modest compared with major metro areas. Texas does not impose a state income tax, and property taxes fund local services. Investors who acquire tax deeds gain either a 25 %–50 % premium if redeemed or ownership of real estate that can appreciate. The county’s location on Interstate 35 provides access to major markets, making it attractive for businesses and residents alike.

Real Estate Market Overview

Housing in McLennan County includes historic bungalows, suburban subdivisions and rural acreage. The Waco metropolitan area has experienced moderate price appreciation, making it easier to find bargains compared with Austin or Dallas. Investors should focus on neighborhoods near universities, hospitals and employment centers where demand is strongest. Redeemable tax‑deed auctions allow buyers to acquire property for the amount of delinquent taxes, often far below assessed value. After the redemption period, investors can renovate and resell or hold for rental income.

Conclusion

McLennan County’s tax‑deed auctions offer investors a chance to acquire property at a discount while helping local governments collect overdue taxes. Sales typically occur on the first Tuesday of the month, either at 2:00 p.m. on the courthouse steps or online through GovEase. Registration is required, and bidders must pay promptly. Understanding the redemption periods—six months or two years—and the statutory premium is crucial. The county’s growing population, diverse economy and central location make it an appealing market for real‑estate investors. With careful due diligence and a clear strategy, tax‑deed investing in McLennan County can produce attractive returns.

Pro Tips

• Study upcoming sale lists: Review the MVBA list posted 21 days before each sale. Use this time to research each property.
  
• Inspect in person: Drive by the property before bidding. Check for access, occupancy and visible issues.
  
• Budget for redemption: Remember that the former owner may redeem the property. Plan for a 25 %–50 % premium refund rather than quick ownership.
  
• Secure funding early: In‑person buyers must pay immediately and online buyers by 4:30 p.m. the next business day. Have funds ready.
  
• Learn local laws: Read Chapter 34 of the Texas Property Tax Code to understand redemption rights and resale procedures. Consult a real‑estate attorney if needed.
  

Frequently Asked Questions

Q1. Can I finance a tax‑deed purchase? No. Payment must be in cash or cashier’s check for in‑person sales or wired for online sales. Traditional mortgage financing is not allowed at the auction. After you receive the deed, you may refinance the property through a lender.

Q2. Do I need to evict occupants after purchasing? Possibly. Some properties may still be occupied. You must follow Texas eviction laws to remove occupants. Consult an attorney for proper procedures.

Q3. How do I quiet title after the redemption period? A quiet‑title action clears any potential claims and enables you to obtain title insurance. File suit in district court after the redemption period ends. Many investors hire a local attorney for this process.

Q4. Are there other liens on the property? Yes. The county sells the property subject to municipal liens (such as mowing or demolition), federal tax liens and certain judgments. Conduct a title search to identify liens before bidding.Q5. Can I renovate or build on the property during the redemption period? You can make repairs, but the former owner may redeem the property and must reimburse your costs. Major improvements are risky until the redemption period expires.

Useful Links

• Auction Calendar
• How to Profit from Texas’s Redeemable Deeds
• Let’s talk about redeemable tax deeds and how you can profit from them!
• Discover Tax Deeds and how you can find property for as little as $50! 
• Learn How to maximize profits at the Texas Tax Sales

Need a hand?

McLennan County tax sales can be your entry point into real estate investment. Visit the Auction Calendar to view upcoming properties. Use our free resources to prepare and book a call if you want help putting a plan in place.

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About Dustin Hahn

Dustin Hahn is a Tax Lien & Deed investor with over 22 years of experience and hundreds of deals under his belt. He created Tax Lien School.com to help you buy Tax Deeds up to 90% off mortgage free and earn up to 36% ROI with Tax Liens. This site was voted the “Most Useful Resource” for new investors. Dustin’s YouTube Channel is the #1 Channel on Tax Liens & Deeds with over 98,000 Subscribers and 3600 videos to help you start. “The Best Time To Start Real Estate Investing Was 20 Years Ago, The Second Best Time Is TODAY!”

20+yrs

5–10deals/mo

2009TLS founded