SM: 2 Ways to Invest in the Housing...

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Even with the broad housing market still in a funk, some investors are putting cash back into real estate.

Play It Safe: Apartment REITs

When it comes to safe investing, real estate doesn't exactly pop into mind these days. But the bust that has beleaguered builders and real estate agents has actually been a boon for many apartment owners. Vacancies are at their lowest levels in six years, and rents are on the rise nationwide. Those factors aren't stopping families -- many of them former homeowners -- from becoming tenants, says Bob Peterson, CEO of Carter, a commercial real estate company in Atlanta. The simplest way investors can capitalize: Pick up shares of a real estate investment trust, or REIT, that specializes in apartments. REITs collect the rents and then pay out at least 90 percent of their taxable income to shareholders through dividends. While such REITs as a group are up 9 percent this year, they're still fairly priced, Peterson says. Home Properties (HME) now owns about 120 properties and yields 4.6 percent, while UDR (UDR) is about twice as big and yields 3.3 percent.

Go for Broke: Home Flipping

Do you have a lot of cash on hand? More important: Can you install drywall? If you said yes twice, then "flipping" an abandoned house could be your next big score. With the number of foreclosures still rising, there are plenty of rehab projects to choose from, and banks often sell them at big discounts. But navigating a foreclosure auction is tricky; pros say investors usually end up buying homes first, sight unseen, and inspecting them for damages later. Buyers likely then need to sink a hefty amount of time (at least six months, flippers say) and money into rehabbing the home. There's no guarantee of selling the rehabbed house for a profit, either, which is why veteran flipper Doug Clark calls it "the riskiest part of the real estate industry." But the potential payoff can be huge. Clark recently paid $1.6 million at auction for a 14,000-square-foot Utah mansion. He spent $250,000 to fix it up and expects to sell it for $3 million. Not bad for a couple of months' work.