Residential, commercial, agricultural or industrial real property purchased and held for the purpose of investment,  as contrasted  with real estate owned for personal purposes such as a residence or vacation home.  Also includes the purchase of interest in a real estate investment trust (REIT),  a company that owns, and in most cases operates commercial real estate, ranging from apartment complexes and office buildings to shopping centers and hotels.


An individual investment property should be judged on its own merits. To reduce liability,  investment real esate is often owned by a limited liability company (LLC) ,  formed for the express purpose of isolating other assets from liability arising from the property.

Real Estate Investment Trusts should be judged not only on the merits of the properties held within,  but also on the structure of the REIT itself.   Traded REITs are valued daily in the securities markets, and are generally quite liquid,  offering an exit for investors.  Non-traded REITS, on the other hand,  do not trade on a market,  and are often difficult if not impossible to liquidate without the general partner (the REIT itself) taking action to sell the properties.  The investors are silent partners, with no say in the operations of the REIT.  Far to often they are taken advantage of through high costs and conflicts of interest.  These drawbacks are similar to those experienced by investors in limited partnerships.