When property taxes go unpaid, they go to the county tax auction. If no one pays the taxes at the tax auction, the State of Alabama steps in to pay them. Investors can then buy them from the state.
It’s possible to end up owning property simply by paying the taxes. But, there is a complex route to ownership through tax deeds. It’s too much for me to cover here. Gary Boyd and Denise Evans are two excellent resources if you want to learn more about the rules and procedures around tax sales.
It can be a great way to pick up cheap rental properties. Last month I bought 4 condo’s this way. The downside is that there are many unknowns and drawbacks to buying this way. If you’re interested in looking for these properties, hopefully this breakdown will help.
I downloaded the data for tax-delinquent properties that the state owns. I wasn’t able to isolate properties by zip code, but I was able to find out which streets have the most “state-owned” inventory in Jefferson County. Here’s my list of the top 40:
| 1. | 11TH AVE N | 46 |
| 2. | 5TH AVE N | 39 |
| 3. | AVENUE I | 34 |
| 4. | AVENUE T | 34 |
| 5. | 2ND AV S | 33 |
| 6. | 3RD AVE S | 32 |
| 7. | AVENUE F | 32 |
| 8. | 16TH ST N | 31 |
| 9. | 16TH ST SW | 31 |
| 10. | 31ST ST N | 31 |
| 11. | 3RD AV S | 31 |
| 12. | 6TH AVE N | 31 |
| 13. | 19TH ST SW | 30 |
| 14. | 27TH CT N | 30 |
| 15. | 40TH AV N | 28 |
| 16. | AVENUE E | 28 |
| 17. | AVENUE H | 28 |
| 18. | 15TH ST SW | 27 |
| 19. | 29TH ST N | 27 |
| 20. | 2ND AVE N | 27 |
| 21. | 4TH AV S | 27 |
| 22. | AVENUE D | 27 |
| 23. | AVENUE G | 27 |
| 24. | SAINT JAMES DR | 27 |
| 25. | 15TH ST N | 26 |
| 26. | 2ND AV N | 26 |
| 27. | 34TH ST N | 26 |
| 28. | 5TH ST N | 26 |
| 29. | 6TH AV | 26 |
| 30. | AVENUE H | 26 |
| 31. | DIVISION AVE | 26 |
| 32. | MAIN ST | 26 |
| 33. | SHADOWOOD CIR | 26 |
| 34. | 11TH AV | 25 |
| 35. | 17TH ST N | 25 |
| 36. | 1ST AVE N | 25 |
| 37. | 3RD AVE N | 25 |
| 38. | 4TH AVE S | 25 |
| 39. | 8TH AV | 25 |
| 40. | 2ND AVE S | 24 |
A couple things I noticed:
- There are a lot of Alphabet Avenues, most of these are in Ensley.
- Some streets run across the whole city. Some parts of the street will have more tax delinquents than others.
- Shadowood is a condo complex. Not sure if that’s the correct spelling, but that’s how it’s recorded in the state data.
- Most of these streets are in Ensley, Fairfield, North Birmingham, Woodlawn and Eastlake. This is most likely where the majority of “state owned” inventory is.