What is an investment property?

An investment property is defined as real estate that is purchased primarily for the purpose of generating income rather than for personal use. This could involve renting out the property, leasing it, or otherwise earning income from the property through real estate investment strategies. Investors typically look for properties that can yield a positive cash flow, appreciate in value over time, or both.

In contrast, properties utilized for personal residence are intended for the owner's living needs and do not generate income. Similarly, a property purchased for resale at a higher price may be considered more of a speculative investment, which does not quite fit the definition of an investment property focused on consistent income generation. Properties held for future inheritance, while potentially an asset, are not primarily intended for income generation and often do not reflect the same investment strategy as properties bought explicitly for that purpose. Thus, the essence of an investment property lies in its primary function of providing financial returns to the owner.