An investment property is real estate purchased with the intention of earning a return on the investment either through rental income, the future resale of the property, or both. Investment properties can be residential or non-residential, and they are typically purchased by a single investor or a group of real estate investors. The key difference between an investment property and a second home is that an investment property is purchased with the intention of generating income, while a second home is a property that you plan to live in for part of the year in addition to a primary residence.

Investment properties require a much higher level of financial stability than primary homes, especially if you plan to rent the home to tenants. They can be a reliable source of income, but owning second homes, buildings, or land will also tie up your assets and require time to manage and sell. When buying an investment property, you need to assess your financial stability and return on investment for that particular property. Investment properties can be a long-term endeavor or a short-term investment, and they can represent a short- or long-term investment opportunity.