One of the easiest ways to invest in real estate is through a special type of asset known as a REIT (which is short for real estate investment trust). By allowing companies to pay no Federal income tax in exchange for paying out 90% or more of their profits to shareholders as dividends, you can take a small ownership stake in multi-million dollar malls, hotels, parking garages, and much more. These investments can be held in brokerage or retirement accounts. In the case of real estate when you invest in real estate, you are buying physical land or property. Some real estate costs you money every month you hold it - think of a vacant parcel of land that you hope to sell to a developer someday but have to come up with cash out-of-pocket for taxes and maintenance. Some real estate is cash generating – think of an apartment building, rental houses, or strip mall where the tenants are sending you checks each month, you pay the expenses, and keep the difference as the profit.