What is Investment Property Income?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 24 January 2020
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Investment property income is any type of revenue that is generated from the ownership of investment properties. While the term is usually associated with real estate holdings, many tax agencies around the world interpret investment property to also include holdings like stocks, bonds, and commodities. Treasury bills and notes issued by a given government are also considered examples of investment property income.

Property investments are usually acquired as a means of generating some sort of ongoing return. For example, an individual may purchase an apartment building with the plan of creating a steady stream of income. This would be accomplished by renting out each of the units in the building. In like manner, an investor will purchase shares of stock in the hope that the shares will appreciate in value, or perhaps split, thereby increasing the value of the investment portfolio.

It is important to note that investment property income may or may not be perceived as profit. For example, if the income generated by renting out a real estate holding is being used to pay off an outstanding obligation on the property, the return may not be considered profit. Tax laws applicable to the jurisdiction where the property resides will determine if the income generated by the holding will be considered profit, at least in terms of what type of taxes are due on the income.


Investors have access to a wide range of options when it comes to selecting investment properties. With real estate, the investor may find that commercial investment properties are more to his or her liking. Other investors may prefer to go with residential investment properties such as rental homes, duplexes, or apartment houses. An investor may also choose to purchase real estate that is not developed, and lease the space for farming purposes, thereby creating a type of seasonal investment property income.

As with all types of financial holdings, investment property taxes are assessed and payable on a regular basis. Along with national or federal tax obligations, there are usually taxes that are due to local or regional jurisdictions as well. The exact calculation of the investment property rate will vary, depending on the type of property owned and the tax laws that currently apply.

It is possible to earn a comfortable living with investment property income. Once the property is paid in full, the income earned from rental holdings can be substantial. The same is true for properties such as stocks, bonds, and commodities. Assuming enough of these types of investments are owned, it is possible to live off the dividends generated by those holdings and enjoy an equitable amount of financial security.



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