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What’s the Best Way to Invest £100k in 2024?

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    7 Smart Ways to Invest £100,000 in the UK for Income and Growth

    Whether you’ve inherited a cash windfall or have some money to spare, you might be wondering:

    What’s the best way to invest £100k in property in 2024?

    In this guide, you’ll learn about some of the best ways to invest £100k for income and capital growth in the UK. Keep in mind that this guidance is general information about different methods of investing, so if you want specific advice, talk to a financial advisor.

    Sound good? Then let’s get into it:

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      How to Invest £100k for UK Investors

      But before we get started, there is some jargon that you’ll need to familiarise yourself with. For example, 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 pay-out. Of course, many investments can get 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.

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      Where to Invest £100k in 2024

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

      But how should you invest your £100k to get the returns you want?

      Below, you will find seven of the best ways to invest in 2024 for income and capital growth.

      Want to know where to invest £100k? Check out some of the strategies below:

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        Buy-to-Let Residential Property

        Return Potential:  ★ ★ ★ ★ ★  

        Risk:  ★ ★ ★ ☆ ☆ 

        Likely the most popular asset class for investors in 2024, property is one of the safest (and best) ways to invest £100k in the UK.

        Ideal for both income and capital growth investors, you can earn returns from buy-to-let property in two main ways:

        1. Rent: Income earned every month and paid by the property’s tenant—currently an average of £1260 per month in the UK.
        2. Capital Growth: The increase in a property’s value over time.

        The UK property market exploded in 2021, with record-breaking house price and rental income growth despite the Covid-19 pandemic.

        This has filled many investors with the confidence to add a property to their investment portfolio, with real estate 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 £284,691, according to the Land Registry.

        However, if you have the cash needed for a mortgage deposit and are asking how to invest 100k safely, property could be a top choice in 2024.

        Please read our complete guide to buy to let property to learn more or the best areas to invest in 2024

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        Short-Term Lets

        Return Potential:  ★ ★ ★ ★ ☆

        Risk:  ★ ★ ★ ☆ ☆

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

        Able to earn you both rental income and capital growth, short-term lets are when investors purchase a property for the purpose of renting it out on a short-term basis for holiday-makers or people who travel for work.

        By doing this, investors can earn much more than a standard residential buy-to-let during certain seasons, 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.

        The question is: How do I invest in short-lets and earn regular income?

        Well, investors will need to purposefully invest in a lucrative 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.

        As such, for those asking for the best way to invest 100k safely, short-lets may not be for you as it can perform less well during times of uncertainty – something seen predominantly throughout the COVID-19 pandemic.

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          Student Accommodation 

          Return Potential: ★ ★ ★ ★ ☆

          Risk: ★ ★ ★ ☆ ☆

          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.
          • Private student accommodation – flats and houses converted for students.

          Student accommodation offers secure strong income streams, as there will always be demand from new students every year. The property will also grow in value over time for when you plan to sell in the future.

          Want to know the best part?

          Investing in student accommodation can offer investors better returns than standard residential buy-to-let as rental yields can be much higher. It could also be a good addition to a property portfolio as a way to diversify your assets.

          Manhattan Apartments 

          Return Potential: ★ ★ ★ ★ ☆ 

          Risk: ★ ★ ★ ☆ ☆

          Want to know how to invest £100k today? Maybe Manhattan apartments are the answer.

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

          Manhattan apartments are seen as a decent alternative to other property investments as they have distinct advantages.

          For starters, as they are smaller than other apartments, they are more affordable to invest in and more energy efficient.

          However, these apartments can be a double-edged sword, as it will likely limit the overall return you can get compared to buying a larger property.

          You can buy a Manhattan apartment at a much lower price point, so they are worth putting some money into, but they may not be the best answer for how to invest 100k cash.

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            Off-Plan Property

            Return Potential:  ★ ★ ★ ★ ☆ 

            Risk:   ★ ★ ★ ★ ☆

            An alternative to buying an older property, 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.

            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.

            You can invest in off-plan via property investment companies that work alongside the developers.

            Off-plan opportunities include unique advantages such as:

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

            While instant gains can be made through capital appreciation, it will take a certain amount of time before rental income can be received. This varies depending on the project.

            For this reason, investing all of your £100k into this asset may not be for everyone.

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              Buy-to-Sell Property 

              Return Potential:  ★ ★ ★ ★ ☆

              Risk:  ★ ★ ★ ★☆

              While not offering much in the way of 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 for a long period of time.

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

              In the past, 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.

              Naturally, if you’re looking at how to invest £100k safely, this may not be the option for you.

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              Eco Property 

              Return Potential:  ★ ★ ★ ★ ★

              Risk:  ★ ★ ★ ★☆

              Are you looking to avoid risk in the future? Want to know how to protect your property investment from costly upgrades?

              Then investing in energy-efficient property is the way to go.

              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.

              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.

              The eco property then acts as a future-proofing measure and will ensure the investment stays in demand and high value until you decide to sell up.

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

              • Eco Property: These are new builds designed with energy efficiency in mind from the start. 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.

              Via eco properties, you can 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 one eye on the future.

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                What Is the Smartest £100,000 Investment for Good ROI? 

                So, what’s the best investment for £100k in Property Investment?

                Like most questions of this nature, the answer is always the same:

                It depends.

                Investments are a personal choice, and it will entirely depend on your goals for the best way to invest £100k.

                If you’re willing to risk your cash for the best chance of quick returns, buy-to-sell could be ideal.

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

                By investing £100k in real estate, you can access regular rental income each month while also enjoying considerable returns in the future through capital growth.

                And don’t let the price put you off.

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

                However, income can be taxed through income tax and capital gains tax, although some tax relief is available.

                If in doubt, speak to a financial advisor to see if real estate investment is the right choice for you. 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.

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                  What Are the Best Things to Do With £100,000?

                  Seek Independent Financial Advice

                  Before you invest money and set your financial goals, speaking to a financial advisor is always a good idea.

                  Investments can be far more complex than just the money you need, as your personal or financial circumstances 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 come into play.

                  By talking to an expert, you’ll be able to explore these options and settle on the right asset for you.

                  Here are some suggestions for how to invest £100k wisely:

                  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 it will likely depend on your confidence and skillset whether you choose to invest actively.

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

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

                  They will take care of the day-to-day and 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.

                  (This is key if you’re asking how to invest £100k for passive income, as you’ll want a hands-off investment).

                  Understand Your Risk Appetite

                  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.

                  But some strategies come with more risk than others.

                  The trade-off is that the riskier an investment, the higher the potential for returns. Property investment is a good way to minimise risk whilst still maximising returns.

                  How to Invest £100k Safely

                  Where’s the best place to safely invest £100k?

                  You have a few options if you want to manage risk and keep your £100k investment as safe as possible.

                  Likely, the safest asset class is real estate, as it very rarely gets impacted by short-term fluctuations – take the Covid-19 pandemic, for instance.

                  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 invest 100k.

                  Creating a diversified 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.

                  By doing this, you’ll limit the impact of one of your investments performing poorly. You can also choose several real estate investment strategies, such as student accommodation and short letting, to create a diversified property portfolio with your £100k.

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                  Conclusion

                  We hope you’ve enjoyed our guide to the best way to invest £100k in 2024, it may not be written by Martin Lewis, however we have tried to include as many tips and facts as we can.

                  If you’re looking for the best investment for £100k or where to invest 100k in the UK in 2024, then property investment is likely the best choice for you.

                  It offers a less risky investment than other strategies while providing higher returns.

                  However, be sure to diversify your portfolio and avoid putting all your eggs in one basket. It would help if you also spoke to a financial advisor to get advice on the best thing you can do with your £100k.

                  Buy-to-Let Investment Guide

                  Want to become a successful buy-to-let investor? Get our free investment guide today for all the latest tips!

                  Download Guide Guide - Buy to let investment guide

                  Off-Plan vs Completed Property

                  The ultimate guide to help you choose whether to invest in off plan or completed property in 2024.

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                  Author

                  Reece Pape

                  Reece Pape is a property writer at RWinvest. Utilising up-to-date property statistics and data, Reece aims to keep investors informed on the latest market developments.

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