Which type of property is classified as 'investment property'?

Investment property is classified specifically as real estate held as an investment for income production. This type of property is acquired with the intent of generating rental income or capital appreciation over time. Investors might own properties such as apartment buildings, commercial real estate, or rental homes, which are primarily used to produce income rather than being utilized personally or for business operations. This classification is integral in distinguishing investment properties from other types of real estate that serve different purposes.

For instance, properties held for personal residence are intended for the owner's enjoyment and living purposes, rather than for generating income. Similarly, real estate held for sale to others is typically classified as inventory for businesses involved in buying and selling properties, thus not fitting the criteria for investment properties. Lastly, real estate used for trade or business is primarily for operating a business rather than yielding investment income. Therefore, the focus on income production solidifies why the classification of investment property aligns specifically with real estate held as an investment for generating revenue.