How is an 'investment property' defined?

An 'investment property' is defined as real estate purchased specifically for the purpose of generating rental income or appreciation in value over time. This definition encompasses properties that are not intended for personal use but rather for the potential income they can produce and the increase in their market value. Investment properties can include residential rentals, commercial properties, or even undeveloped land that can be held for investment purposes.

Investors typically look for properties that will yield a return, which might come from tenants paying rent or from selling the property at a higher price in the future. This focus on income generation and appreciation is what distinguishes investment properties from personal residences or properties that serve solely the owner's needs.

The other options describe properties that serve different primary purposes, such as personal living space or undeveloped land, which do not align with the investment intent crucial to the definition of an 'investment property.'