Nothing. It doesn't dissolve in water, nor does it react with water.
The anion in "Fe"_2"O"_3Fe2O3 is "O"^(2-)O2−, which is a very, very strong \mathbf(sigma) donor. On the other hand, water is a much weaker sigma donor (its highest-occupied molecular orbital / HOMO is much lower in energy).
What it means is that the oxide anion makes a much stronger sigma interaction than water would, so water is incapable of breaking the "Fe"^(3+)-"O"^(2-) interaction and replacing it with an "Fe"^(3+)-""^((delta^(-))) "OH"_2 interaction. It's not favorable in typical reaction conditions.
You can see other sigma donors such as "NH"_3 and "CO" (which is also a pi acceptor) in the spectrochemical series:
https://en.m.wikipedia.org/wiki/Spectrochemical_series#Spectrochemical_series_of_ligands
The ligands further to the left are not expected to capably displace the ligands further to the right (notice how "O"^(2-) is not the same as "O"_2^(2-)). A sigma donor with a 2- charge is definitely a stronger lewis base than something that is neutral.
Hence, iron(III) oxide doesn't dissolve in water, nor does it react with water.
