What is an investment property?

An investment property refers to real estate that is specifically acquired for the purpose of generating income or profit, rather than being used as a primary residence. This can include residential rental properties, commercial buildings, or land that is anticipated to appreciate in value and produce rental income.

When investors purchase properties to rent out, develop, or hold for appreciation, they are fundamentally seeking to create a revenue stream or financial return from their investments. This aligns with the concept of investment properties, where the main goal is not personal use but economic gain.

Other properties, such as those primarily utilized as a personal residence, do not serve the same purpose of generating income, which distinguishes investment properties from typical homes. Historical significance of a property, while potentially affecting its value, does not inherently classify it as an investment property unless it is being operated or marketed with the objective of income generation. Short-term rentals might generate income, but they are often classified under a specific market segment and also demonstrate a different operational model and intent than broader investment properties.