What are the different types of investment property?

The most common type of investment property is residential real estate. The properties are for occupancy, like single-family homes, condominiums and apartments. Real estate investors tend to prefer residential real estate because, once you secure a high-value property and long-term tenants live there, it can generate reliable income.

What is investment property & how does it work?

With the latter, investors will often engage in flipping, where real estate is bought, remodeled or renovated, and sold at a profit within a short time frame. The term "investment property" may also be used to describe other assets an investor purchases for the sake of future appreciation such as art, securities, land, or other collectibles.

Should you invest in a property?

Your ROI can help you determinewhether you should invest in a property. It can also give you an idea of a real estate investment’s profitability. Let’s say you buy a $200,000 property that you rent out for $1,000 a month. Your total potential annual income is $1,000 × 12 months, which equals $12,000.