What is an investment property?

An investment property is real estate purchased to generate passive income (earn a return on the investment) through rental income or appreciation. Investment properties are typically purchased by a single investor or a pair or group of real estate investors. There are several types of investment properties investors can buy to earn passive income.

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.

Should you buy a residential investment property?

In a booming real estate market, buying residential investment properties can seem relatively low-risk. But ever since the reckless real estate boom days ended with the 2008 recession, 'caution' has been the watch word. If you choose and buy wisely, investing long-term and even flipping residential investment properties can pay off.