Why the Cheapest Tax Deed Isn’t Always the Best Deal
Written By Tony Martinez
Main Points
When new investors first start exploring tax deed investing, some believe that it is always a good idea to buy the cheapest property at auction and make a quick profit. It’s easy to see a $500 parcel on a county list and imagine the potential profit, but in this business, the cheapest tax deed doesn’t always equal the best deal; in fact, it can often turn into a costly mistake.
Experienced investors know the real game isn’t chasing cheap deals, but about making smart purchases based on a clear understanding of the property and the value behind it.
Today, we will discuss why the cheapest parcels are not always valuable and why paying more for a tax deed up front can lead to greater potential profits.
The Cheapest Property Isn’t Always Valuable
A property might sound like a bargain at first glance until you dig into the details. Some of the lowest-priced tax deeds on county lists are unusable parcels: landlocked lots with no access, strips of roadside easement, or leftover land between two developed lots.
In some cases, these parcels are so small or oddly shaped that they can’t be built on, sold, or even regularly accessed. It’s also common for low-cost tax deeds to have liens, environmental issues, or zoning restrictions that make them difficult to use or resell.
Before you get caught up in the excitement of a “deal,” take time to research. Confirm property details through the Assessor’s Office, GIS maps, and parcel reports. Doing due diligence up front helps ensure you don’t buy a property that becomes a problem instead of an opportunity.
Don’t Rely on the Address; Verify the Parcel Number
A common mistake new investors make is relying solely on the address in a tax sale listing. Many tax deed properties don’t have physical addresses, or the listed address doesn’t match the actual land being sold.
The most accurate identifier is always the parcel number. Cross-reference that number with county mapping tools or GIS data to confirm:
The exact location and boundaries of the property
Whether it’s landlocked or accessible by a public road
What’s surrounding it: development, water, commercial use, etc.
If anything is unclear, contact the county or review satellite imagery before making a decision.
Sometimes, listings can be tricky when a physical address is included, because that address may not actually correspond to the parcel being sold at auction. In many cases, the address shown is pulled from county data and may point to the nearest developed lot, the owner's address, or another location, rather than the actual property tied to the tax deed.
That means you could think you’re bidding on a home or buildable lot, when in reality, the parcel is vacant land next door, a shared easement, or even a drainage strip.
So, keep in mind that thorough research is essential.
Paying More Upfront Can Mean Greater Profit Later
It’s natural to want a “deal,” but in tax deed investing, cheap isn’t always profitable. Sometimes, spending a little more upfront gets you a much stronger property; one that’s marketable, accessible, and easy to sell.
Higher-quality properties:
Sell faster, often without needing major cleanup or marketing.
Attract more buyers, even in slower markets.
Carry fewer legal or title complications, saving time and money.
When it comes to tax deed investing, success isn’t about how little you spend; it’s about what you get in return. A well-researched property in the right location will consistently outperform a handful of cheap parcels that offer no real value.
The Power of Over-the-Counter (OTC) Tax Deeds
Here’s something many investors don’t realize: not every property sells at auction. Thousands of tax deed properties go unsold every year. When that happens, counties often move them to Over-the-Counter (OTC) lists, meaning anyone can buy them directly from the county, no bidding required.
At USTLA, we’ve developed a proprietary system called the “OTC Tax Deed Property Acquisition Strategy” that teaches investors how to identify, research, and purchase these properties for just the amount of back taxes and penalties owed.
These OTC opportunities often allow investors to:
Acquire real estate for pennies on the dollar
Skip the competition and stress of auctions
Own properties free and clear of mortgages
Resell them “as-is” for immediate profit, or hold for rental income
It’s one of the most overlooked paths to building wealth through real estate, and it’s a cornerstone of how we help investors achieve results faster and with less risk.
Start Investing Strategically
Most of the time, the cheapest deal is cheap for a reason. Successful tax deed investors focus on strategy, not just low price tags.
By combining smart research with proven systems like USTLA’s Over-the-Counter Tax Deed Property Acquisition Strategy, investors can confidently grow portfolios of properties and build lasting wealth.
If you’re ready to stop chasing “cheap” and start learning how to buy smart, enroll in our FREE 3-Module Online Tax Lien & Tax Deed Crash Course today and discover how to profit safely, strategically, and confidently.
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Vital Information Beginner’s MUST KNOW FIRST so you can Get Started Right
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