Which of the following describes investment property?

Investment property is defined as land or buildings that are held for the purpose of earning rental income or for capital appreciation. This classification is important because it reflects the intention behind holding such properties and distinguishes them from other types of properties.

The correct answer highlights that investment properties are specifically designated for generating income through rentals or benefiting from an increase in value over time. This makes it clear that the primary purpose of investment property is not for personal use or operational business activities, but strictly for financial gain.

In contrast, properties rented solely for residential purposes are categorized differently since they may not be held for investment appreciation or income generation in the same way investment properties are. Similarly, properties acquired solely for resale are typically classified as inventory rather than investment property. Lastly, buildings primarily used for manufacturing do not serve the function of producing rental income or appreciation in value in the way investment properties do. Therefore, identifying investment property correctly is essential for accurate financial reporting and investment analysis.