The winning bid is only the starting line. The true cost of a tax deed win includes fees, timelines, property risks, and carrying costs that can turn a “deal” into an expensive lesson if you don’t plan ahead.
You just won a tax deed for $35,000 on a property worth $120,000. You're about to make a killing, right?
Maybe. Or maybe you're about to learn why “winning the bid” and “making a profit” are two completely different things.
Here's what gets forgotten: the hidden costs that can turn the dream deal into a break-even nightmare.
The Costs Nobody Warns You About
- Title Work ($800-$3,500)
That deed might not be clean. Expect clouds on the title, prior liens, or ownership disputes.
You'll need:
- Title search: $300-$800
- Quiet title action: $2,000-$5,000
- Title insurance: $800-$1,500
Example: ‘Mike’ won a $40k deed. Mechanic's lien from 2019. The quiet title cost him $3,200 and four months.
- Cleanup and Securing ($500-$5,000)
Abandoned properties need:
- Trash removal: $400-$2,000
- Boarding up windows: $200-$800
- Yard cleanup: $300-$1,500
- Changing locks: $150-$300
Hoarder situation or bio-hazard? Add $3,000-$10,000 for professional cleaning.
- Eviction Costs ($1,500-$4,000)
If someone's still living there, you can't just kick them out.
Budget for:
- Attorney fees: $1,000-$2,500
- Court costs: $300-$500
- Sheriff eviction: $200-$400
- Holding Costs (The Silent Killer)
Every month you own it:
- Property taxes
- HOA fees: $100-$600/month
- Insurance: $80-$300/month
- Utilities: $100-$250/month
Six months? Easily $3,000-$5,000 gone.
- Repairs (The Big Variable)
Budget at least 10-15% of property value for surprises. Foundation cracks. Roof leaks. Plumbing. HVAC. They show up after you own it, never before.
The Real Math
Purchase: $35,000
Title work: $2,500
Cleanup: $1,800
Holding (4 months): $2,400
Repairs: $8,000
Total invested: $49,700
Sale price: $110,000
Closing costs: $7,700
Net profit: $52,600
Still great. But not the $85,000 windfall it looked like on auction day.
The Bottom Line
Winning the auction is easy. Keeping the profit requires math, patience, and realistic budgets—because the true cost of a tax deed win is almost never just the winning bid.
Know the true cost of a tax deed win before you bid. Budget for worst-case scenarios, build in a cushion for surprises, and never fall in love with a property at auction.
Winning’s easy. Protecting profit comes down to understanding the true cost of a tax deed win.
(all numbers are examples and not exacts)
This blog is for informational purposes only and should not be relied upon as financial or investment advice. Real estate investing carries risks, and individual results will vary. Always consult with your team of professionals before making investment decisions. The authors and distributors of this material are not liable for any losses or damages that may occur as a result of relying on this information.
