Rental homes are a popular way for investors to supplement their income. An investor who purchases a residential property and rents it out to tenants can collect monthly rents. These can be single-family homes, condominiums, apartments, townhomes, or other types of residential structures.
An investment property is purchased with the intention of earning a return through rental income, the future resale of the property, or both. Properties can represent a short- or long-term investment opportunity.
Investment properties are not primary residences or second homes, which makes it harder for investors to secure financing. Selling an investment property must be reported, and may result in capital gains, which can have tax implications for investors.