7 Best Ways to Invest £100k in 2024

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 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.

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.

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.

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 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 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.