Buying real estate for rental income or capital growth.

• A. Property investment
• B. Shares/stocks investment
• C. Investing
• D. Bad debt

Answer: (A)

The main idea here is recognizing that buying real estate specifically to generate rental income or to benefit from increases in property value is called property investment. This label targets the asset class and purpose: real estate acquired to earn ongoing rent and/or achieve capital growth over time.

Property investment focuses on two primary sources of return. First, rental income provides cash flow, which can be measured by indicators like rental yield or cash-on-cash return. Second, capital growth comes from the property’s value rising over years, contributing to wealth when the property is sold. This combination—income plus potential appreciation—defines the strategy.

This term is distinct from other options. Shares/stocks investment refers to investing in equity securities, a different asset class with its own dynamics like dividends and price volatility. Investing is too broad and could apply to any asset type, not specifically real estate. Bad debt describes a financial problem rather than a type of investment.

So, buying real estate to earn rental income or aim for capital growth is best described as property investment.