7 Best Ways to Invest £100k in 2024 (2024)

If you’re looking to invest £100k, these are some of the investment opportunities you can consider:

1. Buy-to-Let Residential Property
2. Short-Term Lets
3. Student Accommodation
4. Manhattan Apartments
5. Off-Plan Property
6. Buy-to-Sell Property
7. Eco-Property

UK property is likely to be the most popular asset class for investors in 2024. It is typically referred to as one of the safest (and best) ways to invest £100k. Property is a tangible asset, and the UK market has historically shown impressive growth, leading to big returns for investors.

“90% of all millionaires become so through owning real estate.” – Andrew Carnegie

Buy-to-let property is ideal for both income and capital growth investors, as you can earn returns in two main ways:

• Rent: Income earned every month and paid by the property’s tenant—currently an average of £1,297 per month in the UK.
• Capital Growth: The increase in a property’s value over time.

The UK property market exploded in 2021, with record-breaking house prices and rental income growth despite the COVID-19 pandemic. This has given many investors confidence to add a property to their investment portfolio, as real estate is known to perform well even during times of uncertainty.

Just keep in mind that property is not a liquid asset, which means you can’t quickly sell to see investment returns. Likewise, real estate can get expensive, with a current average property price of £281,373 according to the Land Registry, and mortgage lender rates can vary considerably.

However, if you have the cash needed for a lump sum mortgage deposit and are looking for a less risky investment, the property sector could be a top choice in 2024 to maximise the value of your investment.

Take a look at our complete guide to buy-to-let property to learn more about the best areas to invest in 2024.

If you can handle the seasonal fluctuations, short-term lets can be one of the best ways to earn huge returns in 2024.

Short-term lets are when investors purchase a property to rent it out on a short-term basis to holidaymakers or people who travel for work. This strategy can earn you rental income and has capital growth potential.

By entering the short-letting sector, investors can earn much more than a standard residential buy-to-let during certain seasons. Usually, people will book at a higher rate provided the property is in a prime short-let location.

However, research is required to fully take advantage of the seasonal high points and minimise the void periods.

How do I invest in short-lets and earn regular income?

Well, investors will need to purposefully invest in a lucrative and high-yield area that is attractive to travellers to increase their short-term profits and generate a monthly income stream.

However, even in the best areas for short-letting, it is possible that there will be times when the investment doesn’t perform as well as usual.
When assessing the security of the investment, short-lets may not be for you as they can perform less well during times of uncertainty – something seen throughout the COVID-19 pandemic.

If you want to know how to invest £100,000 safely with minimal risk, you could consider putting money into student accommodation.

Types of student accommodation you can consider are:

• Purpose-built student accommodation – modern flats built with students in mind.
• HMOs – Houses of multiple occupancy are houses optimised to allow for sharing by several students.
• Private student accommodation – flats and houses converted to be suitable for students’ occupations.

Student accommodation can offer consistent income streams, as there will always be demand from new students every year. Additionally, the property will grow in value over time, depending on when you plan to sell in the future.

Investing in student accommodation can offer investors better returns than standard residential buy-to-let and other investment options, as rental yields have the potential to be much higher. It could also be a good addition to a property portfolio as a way to diversify your assets, as student accommodation won’t always be susceptible to the same market forces as other types of residential property investment.

To diversify your investment portfolio, it could be worth considering different-sized properties. Smaller apartments, for example, can be acquired at a lower cost than larger properties, allowing you to invest in more than one and multiply the rental income streams.

Not to be confused with one-bedroom apartments, Manhattan apartments are studios with secluded bedrooms.

Manhattan apartments are seen as a decent alternative to other property investments as they have distinct advantages. For starters, they are smaller than other apartments, making them more affordable to invest in and more energy efficient.

Manhattan apartments often have much lower price points, possibly making them more worthwhile investments for those seeking affordability. At the same time, it may be preferable to seek larger apartments if you wish to see bigger gains from a single investment.

Off-plan property allows investors to be involved from the start of a new build and sees investors directly invest in a brand-new property. You can invest in off-plan via property investment companies that work alongside the developers.

The benefit of this is that you will likely see better returns as you can make profits on capital appreciation before the property is fully built and get access to properties not yet on the open market.

Off-plan opportunities include unique advantages such as:

• Payment plans
• Luxury facilities
• Assured yields and rental income

While the property is likely to start increasing in value right away, it will take a certain amount of time before rental income can be received. The amount of time it takes until completion and tenanting of the property varies depending on the project.

For this reason, off-plan property may not be the best option for every investor as it is a long-term strategy. Investors looking for a shorter-term strategy could consider acquiring a completed and tenanted property or exploring even shorter-term options such as buy-to-sell, but this comes with more risk.

Although as an investment strategy it doesn’t offer monthly income, buy-to-sell is an exciting asset for capital growth investors.

Buy-to-sell refers to buying a property for the purpose of selling it as soon as possible, as opposed to renting it out as a long-term investment.

In other words, investors will purchase a property, and then make improvements, and let it grow in value.

Looking at the past performance of the market, property investors have made massive returns using this strategy.

This strategy depends highly on the current state of the UK property market. The market has shown long-term stability, and big returns have been made in the past, but it has been subdued in recent years, and many investors have turned to buy-to-let as a more lucrative strategy.

This strategy isn’t for every investor, but if you are confident about the current market and looking for a short-term strategy with a higher degree of risk but high potential gains, buy-to-sell could be the investment option for you.

Green investing has emerged as a trend in investment, as people look for more sustainable methods of living.

EPC ratings and energy-efficient upgrades have been big news for investors recently, with many wondering how this will affect their profits. Eco property, otherwise known as green or sustainable property, is a way to ensure you won’t be hit with unexpected costs in the future, keeping the investment low-cost. For eco-minded investors, it’s also an investment in the future, positively impacting the environment.

By investing in eco-properties or energy-efficient upgrades, you can protect your property investment from costly upgrades in the future.

For those who don’t want to worry about changes to legislation surrounding EPCs, eco properties allow investors to avoid one of the biggest anxieties that investors face today.

Ensuring a property is fitted with energy-efficient features is a future-proofing measure, allowing the investment to stay in demand and high value until you decide to sell.

There are two types of energy-efficient strategies for investment:

• Eco Property: These are new builds designed with energy efficiency in mind. This is the best way to future-proof a property investment, as it will have cutting-edge technology built in. It’s better suited for bigger budgets but will save money in the long run.
• Energy-Efficient Upgrades: An older property can also be upgraded with new technology to hit government targets. This is better suited for smaller budgets, as cheaper upgrades can be made, but it would be very expensive and difficult to bring it up to the standard of an eco property.

Eco properties allow you to observe various impressive features, including solar panels, air source heat pumps, rainwater recycling, heat recovery, and even central business management systems.

Not only will you get regular income, but eco properties are a good strategy if you have an eye on the future.

Investments are a personal choice, and finding the best investment for your situation will entirely depend on your goals.

If you’re willing to risk your cash for the best chance of quick returns, buy-to-sell could be ideal. A high-interest savings account could be the safest bet for a low-risk investment, but returns will be very limited compared to other types of investment.

However, as a midpoint, buy-to-let rental property could be considered the best way to invest £100k in the UK.

By investing in real estate, you can earn regular rental income each month while also enjoying considerable future returns through capital growth.

However, the current market shows that property prices are very high, and mortgage interest rates are not as affordable as they have been in the past.

However, there are ways to reduce the entry price of a property, including by making an off-plan property investment.

Income from property investment can be taxed through income tax and capital gains tax, although some tax relief and tax benefits are available.

If in doubt, speak to a financial advisor to see if real estate investment is the right choice. According to Martin Lewis’s MoneySavingExpert, it’s worthwhile to contact a financial advisor when dealing with and planning to invest large sums of money, such as £100k or even £50k. A good question to ask would be; Would Martin Lewis choose this as the best way to invest 100K? Or, just how much interest am I likely to earn on £100,000 in the UK or overseas?

Seek Independent Financial Advice

Most experts agree that speaking to a financial advisor is a good idea before you invest money and set your financial goals to ensure you have enough investment funds to cover your strategy.

Investments can be far more complex than just the money you need, as your personal finance or other circ*mstances can impact what sort of investment is right for you.
Your age, tax bracket, marriage status, attitude to investment risk, and investment timescale can all affect your decision.

Talking to an expert can help you explore these options and select the right asset for you.

Consider Active or Passive Investing

Depending on how much free time you have available, you may need to decide whether you should actively or passively invest.

Active investing is when investors take a more hands-on approach. This can include becoming a landlord.

Passive investing is when investors take a back seat and wait for long-term growth.

There’s no correct answer here, and whether or not you choose to invest actively will likely depend on your confidence and skill set.

You may also find that traditionally “active” strategies can be passive.

For instance, you can invest in a property managed by a property investment company.

They will take care of the day-to-day, use their expert experience to determine the best opportunities and help ensure the property is tenanted.

In property terms, this could mean buying a rental property and using a property management company to handle all landlord duties.

Understand Your Risk Tolerance

When deciding how to invest your £100k, you need to consider how much risk you’re willing to take.

Unfortunately, every investment comes with risk, and there’s no way to get a guaranteed income stream, as things can go wrong.

However, some strategies are more high-risk than others.

The trade-off is that typically, the higher the risk profile of the investment, the higher the potential returns. The key is finding the balance between these and researching various market trends. Property investment is a good way to minimise risk while maximising returns in a historically stable market.

Diversify Your Investment Portfolio

While having £100k in your back pocket might give you the confidence to splash the cash on a big purchase, most investors find a diversified portfolio the best way to shield themselves from the various market forces that can affect their assets.

Diversifying your portfolio means investing in several different investment markets.

Someone with £100k could choose a property investment strategy while putting some cash into a savings account to ensure diversification.

By doing this, you’ll limit the impact of one of your investments performing poorly. To create a diversified property portfolio, you can also choose several real estate investment strategies, such as student accommodation and short-term rentals.

When deciding what type of asset class you want to invest in, it’s important to think about your own goals and needs for your investment.

An ‘asset’ is something of value that can be used to convert to cash. It is something that can also be used to generate regular income.

Before investing, you need to consider whether you want to invest for ‘income’ or ‘growth’. Income will put more money in your bank accounts each month, while growth means you’ll need to wait for the long term before selling your asset for a big cash payout. Growth investing is popular as part of retirement planning with the aim of cashing out later in life.

Of course, many investments can give you both of these benefits, but it is good to work out which one you prioritise more to select the best investment for your situation.

With more people than ever starting to invest in different assets to build an income, investing in the right asset can ensure the health of your financial future for decades to come.

Find Your Ideal Investment Property

Use our bespoke Search Tool to get access to the best Investment Deals based on your Requirements.

Start your Property Search

Find Your Ideal Investment Property

Use our bespoke Search Tool to get access to the best Investment Deals based on your Requirements.

Start your Property Search

Dale is a property news and onsite content writer at RWinvest.