The real estate market might have garnered a bad reputation as an investment vehicle in recent years, but many investors are finding alternative ways to profit from it. Tax lien and deed purchases are increasingly attractive in an environment where foreclosures and short sales are becoming the norm and house prices continue to drop.

Thomas, a real estate industry leader and best-selling author, openly advocates such investments as a reliable way to receive consistent returns while being backed by the reliability of state and local governments. Ted isn’t alone either. Many other companies and experts such as the owners of the Tax Sales Insider Report also support this time-tested, well-proven method.

Tax lien certificates and tax deeds share a number of similarities with each other. Both are associated with government-levied property taxes and their payment (or rather, the lack thereof). If a property’s owner fails to pay their taxes, the government has a right to take punitive action against them. Depending on the state that the property is located in, this may result in either a tax lien or a tax deed being placed on it, which is oftentimes sent to auction. Investors may choose to attend these auctions and bid on the right to own the lien or deed, which is simply a way for the government to ensure that it receive its payments.

In any case, the owner of this type of investment is either entitled to a specified percentage of interest or the property itself after a certain period of time. This is where the two investment types differ. Liens provide interest in return for your initial payment, but almost never result in property ownership, as they are usually paid off by the delinquent owner. On the other hand, tax deeds provide you with the right to own the property in its entirety from the onset, but they rarely offer interest. Again, this varies based on the state that the property is located in.

Regardless of whether you purchase a lien or a deed, both are fully backed by the authority of the government, and they are widely considered to be very reliable investments. They can also be highly profitable as well. In contrast with many municipal or state bonds with a similar degree of security, the returns involved with liens can easily exceed 10 percent, along with the slim chance that you’ll own the property (providing the lien in question isn’t repaid). Tax deeds are a wise choice as well, offering steeply discounted prices for complete property ownership.

An investor in today’s difficult and fluctuating environment has more investment choices than ever, but few feature frequent stability while offering high returns. Tax liens and deeds are a unique way to take advantage of the current real estate market without staying up at night wondering what tomorrow will bring. And such peace of mind is ultimately a return that many have sought after, but few have found.