One of the states that promises the highest yields of all on tax liens is Illinois--that is, if you can sift through the various laws. This middle western farm state allows both tax deed and tax lien sales. However, you must determine whether the property in question is farmland or not, and just what would be expected of you if you are successful.

Investing in Tax Lien Certificates

Illinois has 102 counties, all of which offer tax sale certificates. Unlike many other states, the interest rate on tax lien certificates is calculated twice a year rather than yearly--this can allow for even greater returns. The successful bidder at the auction is the one who is willing to accept the lowest interest rate return, as the government can then pocket the rest. Unfortunately, this means that although the maximum allowed interest rate is high, it may fall rapidly with aggressive bidding.

The highest allowable interest rate in Illinois is 18 percent every six months for non-farmland and 12 percent every six months for farmland, or 36 percent and 24 percent respectively. Overall, it is one of the best rates in the country. The redemption period also varies by county, allowing for faster returns if one has researched the municipality carefully.

Considering how difficult it is to find a government-backed interest rate on investments of over 10 percent, Illinois offers an incredible opportunity. With some careful thought and planning, this may offer a solid return on your money. Just be prepared for some aggressive bidding in Illinois.