An income property is also called an investment property, which is a piece of developed commercial or residential real estate that is used by a third party tenant who makes rental or lease payments for the use of it.
Income property can be a good source of income for an individual or business. It can include single- or multi-family residential or commercial properties. Sometimes people co-own income properties together, and receive a proportionate share of the proceeds according to the amount of the start-up capital they paid in.
Income from rent or lease will be taxed to the recipient at income tax rates. Sometimes income properties can be situated in such a way that they give more tax benefits or deductions to the owner or shareholder.
REITs are pooled real estate investments held in a trust that gives shareholders equal interest per share in the profits that are generated, and these tend to be high-yield alternatives that complement the rest of a portfolio.