Real estate that is not used as a primary residence and is purchased with the intent of earning a profit can be considered an investment property. A vacation home is also considered an investment property even if it is only intended for personal use. Investors often purchase investment properties to earn income. Examples of these may include residential properties such as apartment complexes or condominiums, or commercial properties such as office buildings and shopping malls. Some investors pursue homes that are undervalued or in disrepair with the intent of making improvements and selling for a profit. Properties may be purchased directly from owners, through auctions, or publicly through registered investments known as real estate investment trusts or REITs. Investment properties have different tax treatments than primary residences, and some investments can be used to legally defer or offset taxes, depending on the opportunity.
