Property investors may find that buying a tax certificate is one of the most profitable ways to own a home. If a property owner does not pay the required dues on the value of the real estate to the proper taxing authority, that authority has the right to place a lien on the property. When a lien occurs, it must be paid or the lien may be sold at auction. When this happens, investors can often step in, pay off what is owed, and have a lucrative opportunity on their hands. There are two potential outcomes when an investor purchases a tax certificate. First, the taxing authority is paid the back dues that are owed on the property by the investor. That is when the investor than receives the documents verifying that they paid the costs owed by the current property owner. There are two potential outcomes from this scenario.First, if the property owner wishes to reclaim their property, they can pay the investor their original investment plus any fees and interest. The interest rate is set by law and is often very high. The interest rate can sometimes amount to 50 percent. The interest earned provides pure profit for the investor.Or, after the redemption period (set by statute), the investor may force the property into foreclosure as a result of nonpayment. When this happens, the owner loses the property and the investor will own it. In either scenario, there is significant profit to be made. However, as an investor, it is up to you to make educated and smart decisions regarding the investment for your needs. This means doing as much research as possible regarding the property. It is possible to lose money on type of investment, especially if the real estate’s value is very low and the dues owed on the property are very high. However, in most cases, the investor walks away with a significant profit. If you plan to invest in real estate, purchasing a tax certificate may be a route you decide to take. If you do not know a great deal about real estate, though, you may want to contact an attorney or title agency to help you through the buying process. This helps to reduce your risk and these professionals can give you advice throughout the process. Without this type of help, you could be putting yourself in financial risk.As an investor, the tax certificate investment option is just one of many. It is up to you to determine which investment option is the right one for you and your needs. There are still profits available in the real estate industry. By paying the delinquent taxes on these distressed properties, you can end up with a very profitable investment.