What is considered "investment property"?

Investment property is defined as real estate that is acquired with the intent of generating profit, typically through rental income or appreciation in value over time. This term encompasses various types of properties, including residential, commercial, and industrial real estate, as long as the primary goal is to earn a financial return.

When considering the choices provided, the one that accurately reflects the definition of investment property is the one that highlights the purpose of generating profit. Investment properties can also include multi-family units (such as duplexes or apartment buildings) and commercial properties, which are often bought specifically to be leased out for income.

In contrast, properties used solely for personal purposes, properties rented to friends and family without the intent of profit, and those utilized only for vacation are not classified as investment properties. While these scenarios might involve real estate transactions, they do not focus on generating a profit through income or appreciation, which is the primary characteristic of investment properties.