Why South Dakota Tax Liens Could Be Your Next Money Maker

Thinking about diving into tax lien investing? South Dakota might not be the first place that comes to mind, but it has some solid opportunities if you know where to look. Even though these sales don’t happen as often here as in other states, they come with a steady 12% return that’s hard to beat. Plus, the rules are pretty straightforward, so you won’t need a law degree to figure things out. Let’s break down how it works and why this could be a smart move for your investment portfolio.

How South Dakota Tax Liens Work in Simple Terms

When you buy a tax lien in South Dakota, you’re basically paying someone else’s unpaid property taxes. In return, the local government gives you a certificate, which is like an IOU from the property owner. If the owner pays their taxes, you get your money back plus interest.

• Auction Day: South Dakota holds these tax lien auctions once a year, on the third Monday of December. You have to attend in person—no online options here.

• Bidding: The bidding starts with the amount of unpaid taxes, and the competition is about who will accept the lowest interest rate. The winner is the one who’s okay with earning the least interest on their money.

• Interest Rate: If you win the bid, the interest you earn is capped at 12% per year. Not bad, right?

• Redemption Period: The property owner has up to three years (plus 60 days) to pay you back. If they don’t, you might be able to take ownership of the property.

Why Consider Investing in South Dakota Tax Liens?

South Dakota might not hold these sales as often as other states, but the benefits are still there. A 12% return is nothing to sneeze at, especially when your investment is backed by state laws. Plus, with a clear and straightforward process, it’s an option worth considering if you’re looking for a relatively low-risk way to grow your money.

Here’s why South Dakota might work for you:

1. Steady Returns:
   • The state offers a decent interest rate, which is better than what you might get from a savings account or other safe investments.
     
2. Legal Protection:
   • The process is well-defined by South Dakota law, meaning there’s less guesswork and more security for your investment.

Predictable Process: Unlike some places where things can get complicated, South Dakota’s process is pretty straightforward.

What to Watch Out For in South Dakota Tax Liens

 ⦿ Limited Opportunities: These sales only happen once a year, so you’ll need to plan ahead. Plus, there are no over-the-counter options if you miss the auction.

 ⦿ In-Person Requirement: If you don’t live in South Dakota, travelling there for the auction might be a bit of a hassle.

 ⦿ Premium Bidding: The competition can be stiff, particularly if you’re bidding on highly desirable properties.

Why South Dakota Could Be a Good Fit for You

If you like the idea of a steady, straightforward investment with decent returns, South Dakota’s tax lien certificates could be a good fit. The state’s clear rules and the solid interest rate make it an attractive option for those looking to diversify their investment portfolio without taking on too much risk.

Pro Tip: Before you invest, make sure you check out the property linked to the lien. You want to be sure it’s worth the investment, especially if you end up owning it.

Final Thoughts

South Dakota tax liens may not offer the frequent opportunities found in other states, but they provide a solid and safe return. With clear rules and legal protections, it’s a viable way to grow your wealth while minimizing risk.

South Dakota’s tax lien certificates might not be for everyone, but if you’re looking for a reliable way to grow your money, they’re worth a look. Ready to explore? Jump in and see what opportunities await!

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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