Thinking of investing but unsure as to the best way to invest £100k in property?
If you’ve decided that you’d like to invest £100k in property it’s likely that you’ve already ruled out placing the money in other types of investments such as stocks and shares but if you’re still considering which investment type is best we’ve written a useful article comparing the two.
Buy-to-let property investment is relatively low risk when compared to other investment types, which is why it makes sense for those seeking the best way to safely invest their money.
Here we uncover the best way to invest 100k in property:
Start a property portfolio
The best way to invest this money in property, to make the best possible returns, is to build a property portfolio.
Start with one property
In a marketplace where lending might be more expensive or for those who are more risk adverse, it might be that an investor chooses to purchase just the one property with the £100k on a shorter term mortgage, if they choose to add a small mortgage to buy in a UK investment hotspot.
Then in a few years’ time, having made capital gains during the time since buying, when the mortgage comes up for renewal, the investor might decide conditions are more favourable for borrowing and choose to release equity and invest in further properties.
Split the cash and leverage
An investor can purchase multiple properties by splitting the cash and borrowing money in the form of buy-to-let mortgages.
Even when mortgage costs and interest are factored in, landlords can still generate far greater returns by spreading their cash over two or more properties and borrowing the difference in the form of buy-to-let mortgages rather than buying a property outright with cash.
With two properties you’re growing double the capital over time. Yes, there are double the costs but there is also double the rental income to balance the books and make a steady profit.
Within 5 years of buying your first few properties with your initial cash injection, if you have bought properties in good investment areas you should comfortably be able to pull out some of your capital to buy further investment properties using buy-to-let mortgages, building your portfolio and increasing your ability for capital gain across several properties.
Diversifying your portfolio is the smart thing to do. Your first investments might have done very well but 5 years down the line prices are likely to have risen and the opportunity that was present when you purchased in that particular spot will likely no longer be the same.
It’s wise to consider locations and properties in the current market climate when you’re looking to buy as the dynamics are forever changing. It can also be appropriate to sell an asset that has peaked in order to purchase in other locations that have yet to realise their potential. We’re always happy to advise on such matters and work closely with our investors to ensure their property portfolios are working as well as possible.
It is time in the market, not timing the market. Meaning whether an investor chooses to buy one property to begin with or multiple properties with their cash injection, they have begun the process and, if they’ve purchased a good property in a strong location, will begin to experience capital appreciation on their asset.
Where to buy property
Where you buy is incredibly important when looking for the best way to invest 100k in property. Consider an area’s credentials, the entry price point and the basis of any projected capital growth. The areas that are worth investing in and likely to make strong capital gains will not need a great deal of justification as places to buy.
Across the UK the dynamic of the economy has changed, over the past few decades London has lost its shine and companies have looked to other well-connected locations as bases for their premises and workforce.
Manchester, Birmingham and Liverpool are arguably the top three locations for investment after London, but for investors seeking property at a lower price point, opportunity can be found in places just outside of these larger centres. Locations such as Wolverhampton, a prime Birmingham commuter spot that is ripe for investment.
Top tips to invest £100,000
When it comes to investing your 100k in property here are our top tips for maximising your returns:
- Leverage your cash to buy multiple properties if possible
- Buy high-quality property in commuter locations
- Consider new areas that have real potential for capital growth
- Scale your portfolio
- Invest for the long term
- Buy an investment property!
Safely invest 100k in property
Taking advice on where and what you buy will allow an investor to make clear, well-informed decisions. Across the UK there are many locations to consider and within each area suitable for property investment there will be various types of homes of different sizes that are available to purchase.
With property investment, much of the effort is exerted in the early stages of finding and buying a property, from then on overseeing your investment can be entirely hands-off using a management company to oversee the property.
Buying an off-plan property with a rental assurance in place that will provide a set yield for a defined amount of time can provide clarity when investing.
To discuss the best way to invest 100k in property with a member of our team please do contact us either on the phone +44 (0) 2039507939 or send us an email at firstname.lastname@example.org