That would not be a bad return on an investment. It would be about four times what banks charge on many loans, which is about 3 percent. Of course, whether a buyer ever would realize this small windfall of $600 in a delinquent tax bill all depends on whether a person who likely has a poor track record in paying bills decides to pay this one.
But Hamlin says he is one delinquent tax bill buyer who doesn't buy these bills to make money.
"I don't do this as a money maker," he said. "Typically, I only buy the delinquent tax bills of people who owe me money.
"It's the lien I'm more interested in than earning the interest," he said. "When I get to personally have a lien put on the real estate of a person who owes me money, that ensures that he cannot sell the property until he pays me the delinquent tax and it allows me to keep abreast of any attempted transactions involving the property and to provide the property owner some motivation to pay his debts."
Community Bancshares, the holding company of PBK of Stanford, has purchased several delinquent tax bill in recent years, including all of the ones available for sale last year by the Danville Board of Education.
"We do our due diligence in our research of hundred of delinquent tax bills offered for purchase by various taxing districts in our area before we decide precisely which ones we may want to purchase," said Bruce Edgington, the bank's chief executive officer. "It is a financial investment on our part, and we want to make sure we make the proper management decisions in regard to our selecting these bills, so we don't just buy every delinquent tax bill."
Edgington said there is a lot of paperwork involved in buying delinquent tax bills and monitoring property owners' efforts to pay them off. There also are considerable expenses which ultimately affect any financial benefit the bank might receive.
State laws govern every step of the process, including how much interest can be charged.
"Yes, there is interest that can be received by the buyer, but there also are expenses," he said. "In addition, the law would allow us to do foreclosures on these properties, but that's not what we are in this to do.
"We primarily do this as a community service," he said. "When delinquent property tax bills are purchased by us or anyone else who buys them, that means the taxing districts are guaranteed tax revenue from those properties and that money goes to libraries to buy more books and city and county governments to take care of more roads."
Meanwhile, Farmers National Bank of Danville does not buy delinquent tax bills.
"It would seem it would be a gamble on the part of the purchaser of these delinquent tax bills to get a reasonable return on their investment," said Tony Robinson, a bank officer.
"You would get involved in situations where there probably are other liens on the property, and those liens would follow the property when and if it changes hands and would take priority over mortgage payments," he said. "Clearing up liens can be a difficult thing to do."
While a 12-percent interest rate would yield a "pretty good return," Robinson said there is a "definite risk that the purchaser of the tax bill would not get their money back on the tax bill itself, not to mention any interest above and beyond the amount of the bill."