JD, CCIM , Real Estate Broker · Tuscaloosa, AL · Member since 2014 · 1k+ posts · 1k+ votes
9y
You can make repairs, but not additions or upgrades. You can rent the house, but you must have a 30-day notice to cancel clause in your lease because if the taxpayer redeems, you (and your tenant) are no longer entitled to possession. If the taxpayer redeems, it will have to pay you for the VALUE of the repairs, meaning the increased value of the property due to the repairs. Best to get an appraisal for the "before" value. There are strict time limits for responding to a redemption request. If you miss your deadlines, you could forfeit the right to be paid for those repairs. Please go to my website and download the free article about redemption time limits for guidance on this issue.
Birmingham, AL · Member since 2017 · 20 posts · 4 votes
8y
If I have the Tax deed on a property and there is and old burned out house on it, can I knock it down and build on it? If I knock it down does the right of redemption start over because it is considered an "improvement"?
Rental Property Investor · Mobile, AL · Member since 2017 · 10 posts · 0 votes
7y
My understanding in the state of alabama is that you cannot rent a tax lien property to a section 8 tenant due to the 30 day notice to vacate clause. The housing authority wants a fully actionable 12 month leased. Now if you have a tax deed you can lease to a section 8 tenant.
JD, CCIM , Real Estate Broker · Tuscaloosa, AL · Member since 2014 · 1k+ posts · 1k+ votes
7y
@Hattie York, @Karonisha Coleman, Mobile and Birmingham will no longer rent to Section 8 even with a tax deed because of the possibility of outstanding judicial redemption rights. You will need a quiet title order.
JD, CCIM , Real Estate Broker · Tuscaloosa, AL · Member since 2014 · 1k+ posts · 1k+ votes
7y
That's great, @Hattie York. Since tax sale investors buy property so cheaply, they can even afford to rent at below market rates and be competitive that way. A word of advice, though. You do not want to discount the security deposit. Alabama residential security deposits cannot be more than one month's rent. In some cases, you might offer to rent the property for $600 a month with a $600 security deposit, and then if they make all of their payments on time and the property is broom clean and not damaged when they move out, they get a $30 a month refund of their rent. Another strategy is to price at $600 (if that is the number) but include renters insurance at no additional charge. You pay the premiums every month. Many tenants think the premiums are higher than they really are, or think they won't be able to get it because they've had trouble getting reasonably priced car insurance or health insurance. Including renters insurance for free seems to be a much more valuable thing that the real cost to you.
JD, CCIM , Real Estate Broker · Tuscaloosa, AL · Member since 2014 · 1k+ posts · 1k+ votes
7y
@Hattie York, the security deposit (or an itemized accounting of the deductions) must be given to the tenant within 60 days of lease end. The $30 refund of the rent means that if the rent is $600 and the security deposit $600, but they leave the property broom clean at month end with no damage, they get the $600 deposit back AND $30 per month x 12 months = an additional $360. It is kind of a back door way to have rent be $570 a month but get a $600 security deposit up front plus an additional $30 per month of security deposit.
Rental Property Investor · Mobile, AL · Member since 2017 · 10 posts · 0 votes
7y
@Denise Evans Oh!!! Ok.. that make since. and I know of a lot of tenants who would bite on that. I also like the idea of including the renters insurance, and will probably do that with my current rehab that will be up for rent soon.