A real estate investor is just that - an investor who buys real estate and holds it for income (rental income and increased market value).
The real estate investor is allowed four important tax benefits which are not available to Real Estate Dealers: Depreciation deductions, the ability to complete tax-deferred exchanges, and installment-sale treatment, long-term capital gain tax rates.
These are important tax benefits available within the tax code for real estate investors.
An example of a typical real estate investor is one who buys a rental house or apartment building and holds it for rental income and appreciation potential. A person who buys raw land and holds it for future appreciation, without making substantial improvements to it would generally be classified as a real estate investor.
