Land and housing, where Middle America traditionally has sown a large part of its savings, still can be a good investment and tax shelter for the small investor if chosen, financed and managed properly, financial planners say.

High interest rates, the scourge of the housing market, have poisoned real estate investment this year and largely nullified for the short-term the big boost it got from this year's tax legislation, analysts point out.

But with the use of creative financing or pooling of their funds, small investors may be able to buy potentially high-yield properties at depressed prices and count on future appreciation when interest rates start to come down.

One way to do this is through a real estate syndication, in which an individual can put as little as $3,000 to buy a share in millions of dollars of residential and nonresidential real estate, according to David S. Dondero, certified financial planner at DeRand Investment Corp. of America in Arlington and president of the D.C. chapter of the International Association of Financial Planners.

The syndications use the pooled investments of individuals to buy into a number of diversified residential and commercial properties. The syndications' managers hunt out assumable mortgages and can take advantage of the bargain-basement pricing going on because of the slumping market, Dondero said.

"When you wave a million dollars under people's noses, you can get some good bargains," Dondero said.

For example, some syndications are starting to buy the properties of distressed builders for as little as 70 cents on the dollar, counting on a future profit when rates come down, he added.

In the meantime, the tax benefits all pass through to the investor, who can take advantage of large early-year depreciation and investment tax credits approved in this year's tax legislation.

Philip Wiesner, tax partner at Peat, Marwick and Mitchell, said an individual can get perhaps double his upfront investment as a tax write-off in the first year when most of the purchase is bought with a loan.

If a group buys a $1-million building, putting up $100,000 in investors' cash, the first-year depreciation allowance would be about $200,000, to be divided on a pro-rata basis with the investors, he said. That is, if an investor had $10,000 in this deal, he could claim a $20,000 deduction the first year.

Wiesner pointed out, however, that there are drawbacks to the public offerings of syndications, the ones available to the smaller investor. About 10 percent of the initial investment may go to brokers' fees, there is little control by the individual over the choice and management of a property and it is not a liquid asset, he said. Smaller, private syndications are better, but these generally require a minimum investment of $50,000, he added.

Financial planners also caution that syndications are only as good as the property they buy, and individuals should be careful in choosing a group.

Individuals can get bargains in homes they could rent to take advantage of large depreciation allowances, but high interest rates make this an unwise investment now, financial analysts conclude.

"In the mid- to late '70s, the little guy bought homes for rental purposes and could count on a large amount of appreciation. Now interest rates are just too high to make this economic , even with the tax break," said John Schwieters, real estate expert and head of the tax division at the Arthur Andersen accounting firm.

Wiesner of Peat, Marwick and Mitchell agrees. Given the high prices on homes in the Washington area particularly and mortgage interest rates that are around 18 1/2 percent for conventional loans, rents are not high enough to cover monthly costs, even taking the tax advantage into account, Wiesner said. The investor would have a negative cash flow and would have to rely on prices skyrocketing later to get a good return on his money in the future, he added.

Real estate agents say, however, that astute buyers not only can get great deals on housing but also can find good financing terms from desperate sellers. When interest rates turn down, a high pent-up demand from those who stay out of the market now could make prices take off again, they say.

"When things get so dismal, that's when to buy," said Ken Kerin, director of research at the National Association of Home Builders. "This is the time to do some real shopping around."

Kerin also says that owning one's own home still makes more sense than renting, even with high interest rates, because potential appreciation and tax deductions outstrip higher costs even with 16 and 17 percent interest rates. Adjustable-rate mortgages, which some consumers have shied from, are probably a good idea now because rates are likely to start falling soon, Kerin said.

Financial planner Dondero also sees a great potential for appreciation in the future and said he is "very bullish on real estate" as an investment. He agrees with other planners, however, that it would not be economic for an individual to buy in this area with the intention of renting, particularly with the District's rent control laws.

That is why syndications make sense, he says, since they can take advantage of a variety of potentially high-yield real estate investments, including office buildings, shopping malls and mini-warehouses, as well as apartment buildings or tax-preferred rehabilitations and historical structures.

Dondero stressed, however, that it is important to check the track record of a particular syndicate on both profits and property management. "If it has bad management, it's going to lose money for sure," he said.

Real estate investment trusts, similar to mutual funds with shares that are traded like stocks, are another way an individual investor can bet on future appreciation in the real estate market without having to manage a property himself. REITs underwent a boom in the early 1970s and then a bust in 1974 with that year's housing slump; since then, they have taken a more conservative approach.

REITs now are getting mixed reviews from financial planners. Some say that, because of the current housing slump, returns on these trusts have not been as high as on other investments.

Others say that for the same reason there are REITs with good equity property that are selling at less than their net asset value and may be bargains at today's prices. The shares can be sold at any time, unlike an investment in a syndication, but there also is no flow-through of tax advantages.