The Best Way to Invest 100k

If you’re lucky enough to have 100k lying around, you’ll want to be sure to make the money work for you and get the most out of your investment. While there are many things you can do with a 100k investment, the right one for you and the best way to invest 100k safely will depend on your goals and financial situation.

100k is no small amount and invested wisely, you could capitalise on your investment to get an extra lump sum or even find ways to generate ongoing returns.

In this article, we explore the best way to invest 100k, offer some ideas to help you generate maximum returns on your investment and show why investing in a buy-to-let property can be one of the most low-risk and lucrative options.

Why You Should Consider Property Investment for £100k

Investment in property has always been one of the surefire ways of building wealth, be it through short-term gains via rental income or long-term appreciation in the value of the house. Despite the ups and downs in the wider economy, the UK property market seems to be very resilient, especially in the locations described as high-growth areas.

The following are some of the advantages that property investment has for individual investors looking to invest £100k:

• Stable Income: Real estate investment properties can generate returns in the form of predictable monthly rents.
• Capital Growth: The values of property generally appreciate over time, hence giving the effect of capital growth.
• Seizing Opportunities: Very often, a possibility exists to invest with mortgage and control larger assets resources with less basic capital.
• Tax Benefits: The UK offers tax relief on mortgage interests to buy-to-let investors and other allowances.

With these advantages, property investment still is one of the best ways to secure an income and ensure long-term financial growth.

Is £100k Enough to Invest in a UK Property?

Yes, it’s good to go with £100k, but you have to be strategic about where and how you invest. For instance, depending on your goals and the type of properties you may look for, 100,000 pounds could be good enough to pay a deposit on a high-value property, or even fully purchase a property in an emerging market.

For example, a budget of £100k can secure a high-yielding buy-to-let or off-plan property in cities like Manchester, Liverpool, and Leeds. These are property investment hotspots, fuelled by increased demand for rental accommodation and huge regeneration efforts. Aspen Woolf focuses on identifying these high-growth areas within key towns and cities and can provide in-depth knowledge into where is best to invest for maximum return.

Best Property Investment Strategies for £100k

There are a few ways you could invest your £100k in the UK property market. Each comes with its own risk-reward profile, and the right choice depends on one’s financial goals, risk tolerance, and investment horizon.

• Buy-to-Let Residential Property: Still, one of the most popular ways to invest in property is the buy-to-let strategy. For £100k, you could secure a deposit on a buy-to-let property in an area of high rental demand. You may gain regular income from rental income with property appreciation over time.
• Short-Term Lets: This has become very popular, particularly in hot tourist destinations or city centers. Websites such as Airbnb opened up avenues to investors for higher yields compared to traditional long-term letting. This, however, requires a more active management strategy and is often at the mercy of seasonal fluctuations.
• Student Accommodation: Investment in student accommodations has proven a lucrative choice, especially in the cities hosting large universities. Entry cost tends to be lower in PBSA, allowing high demand to make sure of regular rental income. A truly hands-off investment, with professional management often included, these properties are ideal for first-time investors.
• Manhattan Apartments: Generally, high-end modern apartments are an attractive investment in most cities, particularly among the young working classes, also known as Manhattan-style apartments. This property generally appreciates well due to growing demand for city-center living and a related premium rental market.
• Off-Plan Property: The good thing with off-plan properties is that one can buy them before they are completed mostly at a subsidized cost. The effect of this investment strategy is that it opens up a possibility wherein, by the time the property is made, its value has recoiled capital growth. This can be considered to be a prudent investment strategy for area and development prospects.
• Buy-to-Sell Property: Also known as property flipping, buy-to-sell involves the buying of a property, refurbishing, and the subsequent selling at a profit. This is indeed somewhat more hands-on than some of the other strategies, but can be quite substantially rewarding, especially within locations where there is high demand for refurbished property.
• Eco-Property: With environmental sustainability one of the major concerns for tenants and buyers today, eco-friendly properties are in demand. Eco-properties are those constructed with a view to reducing energy consumption and thus ultimately reducing running costs for the tenants involved; most of the time, such house constructions qualify for government incentives, too. In that respect, an eco-property could provide long-term value and attract a growing base of eco-conscious tenants.

Monthly Income from 100k Investment in Property

When it comes to any investment, focusing on returns is an important factor for being a savvy investor. What returns can you expect from a buy-to-let property? The first thing is to look at rental yields.

Rental yield is the rental return an investor will achieve on a property each year. To calculate the rental yield, take the annual rental income of the property then divide it by the price paid for the property before multiplying the figure by 100. As an example, a rental property bought for £100,000 and bringing in an annual rental income of £5,000 would have a 5% rental yield.

A good average yield for a buy-to-let property in the UK is 5% or higher. This should allow the property to pay for itself and cover ongoing wear and tear, taxes and other expenses. Rental yields vary by location and just because one area of the UK has high monthly rent, doesn’t necessarily mean that a property will be more profitable and deliver higher yields. 

When looking at monthly income from a £100k investment in property, it is important to consider all associated costs. These include mortgage payments, insurance, maintenance and taxes.

It’s possible to boost rental yield by making improvements to the property to help it stand out in the market. Read more about what makes a good rental yield.

Where to Invest 100k in Property in the UK?

Leeds

The best way to invest 100k could be in a Leeds property. Leeds offers highly attractive rental yields that sit at around 5% and with a strong opportunity for buy-to-let student properties, yields can in fact be much higher. 

By 2024, rents in Leeds are expected to rise 18.8%, making investing in Leeds property a good idea. Some properties in Leeds can be had for a bargain too.

One of our properties, Sky Gardens, in the much sought-after Southbank can be had for 15% discount, giving investors that sweet spot of a low property price and strong rental yield. 

Other good news about Leeds is that it will most likely become the UK’s number one city for capital growth. By 2024 house prices are due to rise by 28%, meaning investing your 100k in a Leeds property could bring great returns down the line.

Nottingham

Nottingham is forecasting 25.5% property price growth over the next five years and offers some attractive yields, particularly because housing demand is outstripping supply. New developments in recent years have focused on the student market and this has resulted in a lack of new developments in the city centre for other residents and young professionals. 

The average property price in Nottingham is around £240,526. One property that can deliver attractive yields is The Wells Nottingham, tipped to deliver rental yields of 7.5%.

Manchester

For investors looking to invest 100k and get a decent monthly income, properties in Manchester perform well. In the coming years, Manchester will experinece some of the highest sale price and rental growth in the UK. 

The average rental income on a two-bedroom Manchester flat is £1,145. Additionally, properties are increasing in quality indicating that rents will certainly rise. For investors looking for the best way to invest 100k, Manchester Waters is set to offer strong yields of 6%. The property consists of studio and one and two-bedroom properties.

If you’re looking for the best way to invest 100k, be sure to carefully consider your goals and appetite for risk. While there are many investment avenues, we think investing in buy-to-let property is a no-brainer. Also, it can deliver both monthly passive income and a lump sum in capital gains when you come to sell. To find out more about the best way to invest 100k, get in touch with our advisors.