Understanding Trust Deeds (Notes)
Homes, land, apartment complexes, and office buildings are all different types of properties, different types of assets. While not properties in and of themselves, another valuable asset to investors is what’s called a Trust Deed. A trust deed on a property, rather than being held by a borrower or a lender, is held by an independent party referred to as a trustee. But who is the trustee? The trustee is the role taken on by the individual investing in the trust deed.
Here’s how the investment itself works: you as the trustee are given the real interest on the property from the borrower, and if that individual fails to fulfill their end of the agreement, you then take complete control of the property on which the trust deed is held. In a way, you become your own personal, individual title company. While not a property, trust deeds are a valuable investment asset.