The recent, modest rebound in the U.S. real estate market has led to a heightened interest by qualified investors in adding real estate to their investment portfolios. A solid real estate investing strategy does not necessarily have to include actively managed properties as there are a variety of other alternatives that provide real estate exposure with above average returns with a significant margin of safety.

Individual Properties

Purchasing individual duplexes or apartment complexes can lead to some excellent returns. However, there is a serious amount of work involved and you risk having your investment remain illiquid for a considerable period of time. Investing in individual properties is not for the faint of heart or for those who want a passive stream of income. Instead, an investor must be actively involved in the management of the properties to make this investing strategy pay off.

REITs

On the other end of the real estate investing spectrum is the use of real estate investment trusts (REITs). This investment vehicle requires no active management at all. An investor simply hands over his money and lets the management of the REIT, for better or worse, manage the properties. This investment can be good but it is susceptible to a significant amount of risk if interest rates rise. While it is a highly liquid asset, that benefit is not relevant if the stock price of the REIT has taken a dramatic hit.

Trust Deeds

In many ways, trust deeds are a superior real estate investing strategy. In fact, they combine many of the best features of both individual property flipping and REITS. Trust deeds are secured by individual properties, are extremely liquid and do not have to be actively managed. In addition, trust deeds offer a superior rate of return and, in most cases, a higher degree of security and safety. They are governed by the same laws and regulations and consummated in the same way as more traditional real estate deals but are far more flexible in accommodating the needs of investors.

If you are looking to create a solid real estate strategy that does not entail active management or paying exorbitant management fees, consider the possibilities that trust deed investing will allow you. It never hurts to look and you may find that trust deed investing is a good fit for your investing needs and risk tolerance.