An investment loan is used to purchase a property which will generate profit.
An investment loan is used to purchase a property which will generate profit.
An investment property is real estate purchased for investment purposes, unlike owner-occupied (primary homes) or second homes (typically vacation homes). An investment property is purchased with the intention of creating profit. Profit can come in the form of rental income, value appreciation, or both.
Any residential property (1-4 units) can be considered an investment property. There are more stringent requirements (e.g., larger down payment) to qualify for an investment property, and their associated interest rates are higher than those for primary (owner-occupied) purchases.