What does "investment property" refer to?

"Investment property" specifically refers to a real estate property purchased with the intent to generate income or profit, typically through rental income, appreciation, or resale. This contrasts with a property bought primarily for personal use or residency, which would not qualify as an investment in terms of producing cash flow.

Additionally, investment properties can be multifamily units, commercial spaces, or even raw land intended for future development, all aimed at income generation. Other choices present scenarios that do not align with the concept of generating income: a property purchased for personal use highlights owner-occupied residences, a recently renovated home emphasizes the condition and updates of a living space rather than its investment potential, and a property used as collateral for a loan refers to a financial arrangement rather than its actual use as an income-generating asset. Thus, investment properties are primarily focused on their capacity to yield profits, making the emphasis on income generation crucial in defining them.