How to Participate in Rhode Island’s Tax Lien Auctions

Thinking about investing in tax liens but not sure where to start? Rhode Island might be just the place for you. It’s a small state with a big opportunity for earning solid returns on your investment. The best part? You don’t need to be an expert to get started. This guide will walk you through the basics of how tax sales work in Rhode Island and why it could be a great move for you.

How Rhode Island Tax Lien Sales Work

Type of Tax Sale:

• Tax Lien Certificates: In Rhode Island, if a property owner doesn’t pay their property taxes, the local town or city can sell a tax lien certificate. This means you, as an investor, can pay the taxes for them and earn interest until the owner pays you back.

Bidding Process:

• Premium Bidding: When you bid on a tax lien in Rhode Island, the person who offers the most money wins. This is called premium bidding. You’ll likely pay more than the amount of unpaid taxes, but the interest you earn can make it worth your while.

Interest Rate:

• 12% Annually: Rhode Island offers a fixed interest rate of 12% per year, or 1% per month. This means you’ll earn 12% on the total amount you paid for the lien, which can add up quickly.

Redemption Period:

• One Year: The property owner has one year to pay you back with interest. If they don’t pay within this time, you can start the process to take over the property.

Sale Frequency:

• Varies by Municipality: Tax lien sales aren’t run by counties here—they’re handled by individual cities and towns. These sales usually happen once a year, often in early summer.

No Online Auctions or OTC Sales:

• Rhode Island doesn’t do online auctions, and you can’t buy unsold liens over the counter. All sales happen in person at the town or city office.

Why Invest in Rhode Island Tax Liens?

Solid Returns:

With a 12% interest rate, your money can grow faster than it would in a typical savings account.

Clear Process:

Each city or town handles its own tax sales, making the process easy to understand. You can find out all the details on their websites or by giving them a call.

Possible Property Ownership:

If the owner doesn’t pay back their taxes within the year, you could end up owning the property for just the cost of the lien.

Less Competition:

Because there are no online auctions, you might face less competition compared to other states that allow online bidding.

Rhode Island Counties and Populations

County	Population
Providence	637,357
Kent	163,760
Washington	126,150
Newport	83,460
Bristol	48,912

Fun Facts About Rhode Island

Small State, Big History: Rhode Island is the smallest state in the U.S., but it was the first to declare independence from Britain in 1776.

No Counties in Tax Sales: Unlike most places, Rhode Island handles tax sales at the city or town level, not by county.

Densely Populated: Even though it’s tiny, Rhode Island is one of the most densely populated states, which can make real estate a hot commodity.

Final Thoughts

Investing in tax liens in Rhode Island presents a fantastic opportunity to earn strong returns, with the added bonus of potentially owning property if the lien isn’t redeemed. By understanding the premium bidding process and attending in-person auctions, you can tap into this lucrative investment option with minimal risk. Make sure to research local town regulations, attend sales, and act quickly to secure the best opportunities. Don’t hesitate to ask questions. Happy investing!

Rhode Island Tax Lien Investing FAQs

Can I participate in Rhode Island tax sales online?

No, tax sales in Rhode Island are only held in person.

What happens if the property owner doesn’t pay the taxes?

If the owner doesn’t pay within a year, you can start the process to take over the property.

Is there a lot of competition at these sales?

Because the sales are in-person only, you might find there’s less competition compared to states with online auctions.

How do I find out when and where the sales are happening?

You can visit the town or city’s website or contact their tax collector’s office for details.

Rhode Island tax liens offer a clear and reliable way to grow your investment. With a bit of research and the right approach, you can make the most of this opportunity. Get our FREE Resources now or Book a Call, and we can help you start with your tax lien investing journey.

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