You can buy a tax liens property which is then transferred to a trust and ‘wrapped up’ in a pension scheme which will yield you, with any luck, an excellent return when you retire.

Pros: When buying tax liens in this manner, such investments are protected from the taxman and thus, as tax-free vehicles, yield far more money than they would if you had to pay tax on them. Investments put into SIPPs can be bought and sold in the same way as other properties, and rents can be received from buy-to-let investments – all tax free.

You can bequeath these investments to your heirs, thus creating the famous, or notorious, ‘trustafarians’. You can also avoid paying inheritance tax, or your executors can, when you die.

Cons: By ‘wrapping up’ your investments, you are not only protecting them from the taxman, but also from yourself and your heirs! The point about putting property – or indeed, any other type of investment – into a SIPP is that you can never yourself get at the bulk of the capital.

The reason for this is that the investment does not belong to you any more, but to a trust you have created. You can administer the trust, but you remain a trustee, not the owner. As such, you only benefit from the interest or yield received.

Also, these vehicles for buying tax liens need professional management and you will have to pay a (usually not inconsiderable) fee to fund managers. Another aspect is that, really, you need to be quite rich to invest in a SIPP There are also upper limits to the amount and type of property you can put into a SIPP Because there are many rules, it is imperative to take professional advice, and you need to know that your adviser is completely trustworthy.

REITs – Real Estate Investment Trusts – introduced into the UK in January 2007, are companies which own and manage income-producing property. This can be commercial or residential and the idea is that the bulk of the income is distributed to investors.

Instead of investing directly in property, you put your money into a REIT which buys, manages and lets out property on behalf of the investors. REITs were first established in the United States, then migrated to Australia and finally to the Netherlands as a means of investing in a property portfolio.

REITs are closely linked to buy-to-let, and – so property experts maintain – are set to change the face of property investment in the UK. As you invest in the company rather than the property itself, REITs are an indirect means of property investment, rather like stocks and shares, although there are several important differences.

As REITs get going, they will probably appeal most to those who feel they understand bricks and mortar, but don’t want all the hassle of dealing with it directly.

With the exception of the last few years, property has generally increased in value so much that there is a general belief that you just can’t lose with property investment especially through tax liens. This impression is underlined by the growth of property clubs, where you pay to invest in newbuild and off-plan properties bought at a discount. Such clubs tend to be heavily advertised and appeal to people’s greed and laziness by suggesting that you can become a property millionaire in no time, for little or no money down, and whether the market is rising or not.

The truth is that you can lose, but even so, property does historically come good most of the time – eventually. Also, investors in property can now, quite literally, have the whole wide world in their hands – or in their portfolios. It is now possible to invest in property in most countries in the world, so that your property portfolio can look as international as you like. Nowadays, anybody can be an international investor and financier! Anybody can swagger around brandishing an impressive-looking international property portfolio!

So why do I believe that property, in general, makes a good type of investment?

In the first place, everybody understands property, simply because everybody has to have a roof over their heads. Everybody also understands that home occupiers have to pay rent or a mortgage in order to continue living there. It is also self-evident that even when fully owned and mortgage-free, there are continuing costs attached to living in a home.

This is knowledge that we all have. By contrast, you have to be quite financially sophisticated to understand how equities and other aspects of the money markets work. You also have to be numerate and actually enjoy number-crunching. Successful people are doing sums in their heads the whole time; it is second nature to them. But few ordinary people really understand how and why stock markets crash, or how the stock market performance in, say, Japan, can intimately affect other stock exchanges around the world.

Few people, too, readily understand futures, hedge funds or derivatives. You have to be quite deeply interested in money and all its ramifications to be able to play money markets. It is a mindset which not all of us have. Yet everybody knows what estate agents and letting agents do.

Then, historically, at least, property is solid and substantial and far less liable than equities to stock market fluctuations, to crashes and recoveries. Obviously house prices fluctuate, but there has rarely, if ever, been a complete crash. One reason for this is that all real estate is built on land which will never go away. A further reason for the dependability of property is that everybody needs a home, whereas we can manage without a car, foreign travel, the latest electronic gadgetry, if we have to.

Then, there is almost always a shortage of housing. And while house prices can go up and down, there is always going to be some value in land. By contrast, the entire value of an equity can be wiped out, in a severe downturn of the market, performance in the High Street. And there is little the individual shareholder can do about this, except to buy and sell at the right time.

When you invest in stocks and shares, you may have very little control over whether their value rises or falls. To take a famous example, when former jeweler retailer Gerald Ratner made his notorious remark at a City dinner that his sherry decanters were ‘crap’, £500 million was immediately wiped off the value of Ratner shares, with the result that many shareholders lost very large sums indeed, through no fault of their own,

But even if somebody calls your house ‘crap’ – as ‘specialists’ on TV home design programs often come perilously close to doing – it is still unlikely to lose all its value.

One way to invest in property is through tax liens. Investing in tax lien certificates is becoming more popular, especially within the current economy. If you currently invest in property but aren’t using this investment vehicle you should definitely look into it.

I wrote this article in the belief that for the person who wants to attain financial security, and have some fun, excitement and flexibility in the process, property makes the best kind of modern investment.

But what does it actually mean to ‘invest’ in property? What is the real difference between ‘owning’ property, which the vast majority of people do anyway nowadays, and ‘investing’ in it?

Don’t we automatically ‘invest’ when we buy property, given that property generally goes up in value? Yes, in a sense, but the main difference is that when you consciously invest in property, as with any other type of investment, you are buying with the express and overriding intention of making a profit.

When you specifically invest in property, you are doing more than just depending on a rising market. Instead, you are hoping to make a gain whatever the market, as you are using money-wise skills rather than just wishful thinking.

At its most basic level, when you invest in something, you put a certain amount of money into that commodity in the hope that you will get vastly more money out, and that during your ownership, that commodity will have increased enormously in value.

This is the theory behind all kinds of investments. Investing is seen as a way of making money over and above what could be made either by earning, or by simply saving up.

Investing is a different matter from just saving, where you put your money into a totally safe, if unexciting and low-yielding bank or building society account. There is no risk but there is precious little gain, either.

Just hoarding money up will never make you rich; you have to make your money work harder than that. And in fact, whenever you put money into ultra-safe deposit accounts, you will in effect be losing, as not only will interest rates be below the rate of inflation, you will have to pay tax on the interest, and the capital sum will never increase.

In real terms, its value will diminish over time.

And if you want to put all your money under the mattress, you may never have to pay tax on it, but you will never make on it, either.

But – when you invest, as opposed to just saving, this means you are taking an element of risk with your money. Unless there is some risk, it is not investing. And while you may make a lot of money from your investments, you will stand to lose as well. Investments are never guaranteed, but wise investors balance the risk so that the scales are heavily weighted in their favor.

When you invest, whether in property or any other commodity, you are basically backing a hunch, but you cannot know for an absolute certainty that you will gain.

But of course, the more you know what you are doing, the smaller the risk becomes. Although this may sound an obvious thing to say, all day and every day people are investing in products about which they know nothing at all. Nowhere is this more true than on the money markets, where amateur investors are losing fortunes all the time because they haven’t a clue what they are doing, and have not bothered to understand the nature of their investment.

Some people dismiss the whole concept of investing, believing it is a euphemism for gambling and that there is in effect little difference between the two. But although the unexpected, whether local or global, can always happen, investing is not exactly the same as putting money into fruit machines or onto a roulette wheel in the wild hope of winning the jackpot. Investing has elements of gambling, true, in that the eventual outcome can never be guaranteed, but it is not, or should not be, a matter of random chance.

There are many products to invest in, from equities to fine art, antiques, wine and classic cars, and many investment ‘opportunities’ are being advertised all the time.

Investing in property is just another method of making money – but one which can be supported by a very real process and development systems to realize considerable potential gains with few if any long term risks.

Tax lien certificates are a means of investing in property while removing a lot of the risk and up front investment capital. But to use a tax lien certificate to invest in property there are several things you must know to ensure you set yourself up for success right from the start.