1. The county's interest rule
2. The certificate
3. Redemption and the bad case
Result
Questions people ask
What does this calculate?
The cash you put into a tax lien certificate, the interest and fees you would collect if the owner redeems after a given number of months, the annualized yield on that, and the result if nobody redeems and you have to foreclose. It uses the interest rule you type in from your county's sale terms.
Where do I get the interest rule?
From the county or state tax lien sale notice and the statute it cites. States differ: some charge an annual simple rate, some a percent per month, some a penalty percent per six-month period, and many sell by bidding the rate down. Type the rate you would actually win at, not the maximum.
Why does the annualized yield change so much with the redemption month?
Minimum-interest floors, fees and per-period charges are fixed or lumpy, so a certificate redeemed in month 2 can show a very different annual yield from one redeemed in month 20. The table shows both so you can see what an early payoff does to the return.
What is the break-even property value?
If nobody redeems and you foreclose, the parcel has to be worth at least everything you paid in plus the cost of getting clear title before you come out even. The tool prints that number. It does not value the property, and a lien can be wiped out or the parcel can be worth far less than the lien.
Does it account for premiums and subsequent taxes?
Yes. A premium bid is added to what you invest and, if you say it is refunded on redemption, returned without interest; if it is not refunded, it is lost. Subsequent taxes you pay later add to your capital and earn interest from the month you paid them.
Is this investment or tax advice?
No. It is arithmetic on numbers you type in. Tax lien investing carries risks it does not model, including bankruptcy stays, federal liens, environmental problems, vacant or worthless parcels, redemption by mortgage holders, and state rules that change. Read your county's rules and talk to a qualified professional.
Not decided
Whether a certificate is worth buying, what the parcel is worth, whether the lien is senior, bankruptcy stays and federal liens, environmental and code liabilities, mortgage-holder redemption, your state's foreclosure or deed timeline, taxes on the interest, and rule changes. The defaults are placeholders, not a county's terms: replace each with the figures from your sale notice and talk to a qualified professional before you bid.
Related tools: the storage auction max bid calculator and the depreciation recapture calculator for other asset-purchase math.