Is Property the Best Way to Invest Money?

Your first step in deciding if real estate investing is right for you is to think about exactly why people invest in property in 2025.

Simply put, buying an investment property is an excellent and (comparatively) safe way to invest your hard-earned cash.

However, investing in the property market may not be right for everyone, with the effectiveness of an investment strategy being dependent on your goals.

With this in mind, check out the pros and cons of property investment to see if it’s the right solution for you.

For a full, detailed look into why you should invest in property, be sure to check out our brand-new guide.

Pros of Investing in Property

• Rental Income Is at a High Level – The HomeLet Rental Index found that the average monthly UK rental income reached £1,284 PCM in December 2024, 1.3% higher than in December 2023.
• Property is Safer than Stocks – Property is known for its ability to remain resilient throughout economic turbulence. For example, despite the COVID-19 pandemic, UK house prices reached record highs, surpassing £290k in July 2022 for the highest-ever growth. In comparison, the stock market suffered its worst crash since 1987 as a result of the COVID-19 lockdown.
• Huge Rise in Prices Predicted – Savills’ optimistic property price predictions show capital value growth upwards of 23.4% in the UK by 2029, ideal for those looking to make a profit from selling their property.
• Rental Demand is at a Record-High – Due to supply issues with the number of new properties being constructed, there is currently an incredibly high demand for rental properties.
• Can Be Completely Hands-Off – While you can choose to self-manage your buy-to-let investments and become a landlord, you can also consider hiring property management companies to handle all landlord responsibilities, such as collecting rent. Their services are available for a fee, usually around 10% of your monthly income.

Cons of Investing in Property

• Potential to Earn No Income During Void Periods – If you fail to find a tenant, your property could spend time earning no money while you will need to foot the bill for mortgage payments. This is why research is essential to identify residential properties that will be popular amongst tenants.
• Property Investment is a Long-Term Investment – Property is a long-term strategy. The most successful investors allow property prices to increase for many years before selling for a big cash payout. If you want quick returns, investing in property may not be the perfect strategy for you.
• Buying Real Estate Can Be Expensive – While there are ways to reduce the upfront costs of property investment, the reality is it can be expensive for some, with our estimates suggesting you’ll need around £31k at a minimum to buy a £100k property, factoring in mortgage payments, stamp duty tax, and legal fees.

So, how much capital do you actually need to pay for investment properties in the current UK market?

The answer to this is slightly complicated, as the property’s value can depend on many factors. For starters, if you invest in student accommodation, you’ll pay a lot less than you would for residential properties.

It can also depend on where you buy. Due to large regional variations, the average property price can change heavily depending on your location.

For example, the purchase price of a property in Manchester is around £500k cheaper than prices in London.

It may also change if you’re a first-time buyer, with tax costs sometimes cheaper for those buying their first home.

Regardless of these outliers, you’ll likely need around £31k to pay for a £100k property. This is factoring in expenses like a mortgage deposit, stamp duty, legal fees, land registry fee, and a cash buffer used to pay for any unexpected costs that arise.

However, this only considers the upfront costs of property, with other ongoing expenses and exit costs including:

• Ground rent
• Mortgage interest payments
• Property management companies’ fees
• Maintenance costs
• Landlord insurance
• Capital gains tax
• Estate agents fees

To get a full breakdown of the costs involved in investing in properties, be sure to check out our full guide on how much money do you need to invest in property in the UK market.

What If You Can’t Afford the Money Needed for an Investment?

If you’re asking how to invest in property with no money in the UK, you may encounter some problems.

Investing in properties can be expensive and time-consuming. You’ll need money to handle the upfront costs and upkeep of an investment. There are ways for investors to invest in property without paying the money required to purchase a buy-to-let investment.

1. You can save up money and wait until you can afford a BTL property.
2. You can invest alongside a business partner.
3. You could rent out a room in your home and earn income.
4. You can invest in a real estate investment trust/REIT with fewer upfront costs or financial obligations.

Just remember that this isn’t investment advice. If you’re looking for financial advice or guidance on your financial decisions, it’s vital you speak to a specialist advisor for help on investing in the housing market.