Best Ways to Invest 50k Best Ways to Invest 50k

What’s the Best Way to Invest 50k in Property?

How to Invest 50k Wisely

 

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When making your first investment, setting a budget is one of the most important elements of all investment strategies. If you have a significant lump sum of money available, investing is a great idea as it allows you to maximise your income and give your savings accounts a boost.

If you have £50,000 to spare, you’re in a good position to get into investing. £50,000 is a lot of money, but it can vanish before you know it. To make the most of this amount of money, you should explore different strategies in order to find the best investment method. Two of the most popular investment assets are stocks and shares and property, but to get the best return on £50,000 investment, should you choose to invest in shares and stocks or opt for buy to let? In this helpful beginner’s guide, we talk you through the best way to invest £50,000, listing the pros and cons of the different types of investments, and offering reasons why buy to let is a great option for those wondering how to invest £50,000 of their money.

What Is the Best Investment for £50,000? The Stock Market vs Property

If you’re seeking the best way to invest 50k, the best place to start is by weighing up the pros and cons of the two most popular investment strategies in the UK – stocks and shares vs property.

 

What Are the Pros of Stocks and Shares for Investing 50k?

  • High potential returns with the right investment strategy.
  • Usually easy and quick to sell when exiting the investment.

 

What Are the Cons of Stocks and Shares for Investing 50k?

  • A high-risk strategy, with the potential to lose everything you invest.
  • Requires expert knowledge to succeed.
  • The stock market can fluctuate easily, causing regular stock price changes.
Pros of Investing 50k in Property Pros of Investing 50k in Property

What Are the Pros of Property for Investing 50k?

  • Investors can make attractive returns through both rental income and capital growth.
  • A lower risk strategy due to the resilience of the UK property market.
  • Can help investors meet both short-term and long-term financial goals.
  • Allows investors to make significant returns from investing just 50k.

 

What Are the Cons of Property for Investing 50k?

  • Property prices can fluctuate which could affect capital growth returns further down the line.
  • Investors can experience void periods causing loss of rental income if the property is in a low-demand area.

How Should I Invest £50,000 – Is It Best to Invest in Property or Stocks and Shares?

After weighing up the pros and cons of the most popular types of investment, you might still be wondering – what’s the best way to invest £50,000? There are different investment methods out there, but when it comes to the best way to invest 50k for high returns, buy to let investment tends to be a better choice than investing in stocks and shares.

This is because, unlike when you invest in the stock market or invest in shares, buy to let property investment allows investors to generate two types of return on investment through both rental income and capital gains. Through buy to let in UK property hotspot areas, investors are able to generate the best return on £50,000 investment possible.

The UK property market is also currently performing at an impressive rate, with predictions for increased growth and success over the coming years. If you currently have the funds available and you’re asking ‘what can I invest 50k in?’, don’t hesitate to explore property as the best investment for 50k.

 

Why Is Property the Best Investment for 50k Budgets?

The best way to understand why property investment is the best way to invest 50k is to look at both the risk profile of this investment type and the potential income you could generate. Say, for instance, you put a deposit down of £50,000 on a buy to let mortgage for a property worth £90,000, with an interest rate of 2.5% over a period of 25 years. Your capital repayments would cost £217 a month, but if you invest in a strong buy to let area where rental costs stand at £800 a month, you would still make a monthly return of almost £600.

Then, if in 25 years your property has grown by an average of 300% (in line with past house price growth trends), you would make a capital growth profit of almost £200,000.

Those investing 50k of their money will most likely have a lower risk tolerance than experienced investors with larger budgets. Buy to let investment is one of the lowest risk strategies out there due to the resilience of the UK property market. Throughout 2020, the property market has stayed strong despite economic instability and uncertainty brought by the Covid-19 pandemic.

The coronavirus pandemic and the national UK lockdown that ensued were expected to have a negative impact on the UK property market and property investments. After a rocky period, however, UK house prices and property market activity have now risen to pre-lockdown levels.

With huge savings to be made on stamp duty tax, and amazing deals and discounts being offered by property developers, savvy investors are recognising the potential behind buy to let in 2020 and 2021. Based on the current market data, even if you want to know how to invest 500k, property is still the best choice.

If you’re looking for a low-cost and reliable investment, it’s easy to see why property is often considered the best way to invest 50k for income.

The Best Way to Invest 50k in Property: Top Tips

To ensure you’re making the best investment for £50,000 of your money, take a look at the following tips on the best way to invest 50k in buy to let property.

Investing is a big commitment, whether you have £50,000 or are trying to work out how to invest 1 million pounds. So, before you go through with investment in a rental property, one of the biggest pieces of financial advice is that you need to make sure you’re ready. The best way to invest £50,000 is to do it at a time when you feel financially secure enough to do so.

If you have a significant amount of savings and you’ve set yourself a budget of 50k, then you know you can invest 50k safely without it massively impacting your financial situation if things don’t go to plan. However, if you’ve been saving money for a long time and the 50k you’ve saved is essentially your only cash savings, you’ll want to reconsider pooling all this money into an investment and instead focus on your personal finance a little longer.

After all, you need to have some savings left for things like emergency funds. To get a bit more clarity on whether you’re managing money correctly, it might be worth meeting with financial advisers who can offer money tips and help you make your decision whether or not to invest.

Keep in mind that there are also taxes that need to be paid for a buy to let investment, such as income tax and stamp duty tax. The stamp duty holiday, which is set to last until March 2021, allows investors to make significant savings on their property ventures. While this won’t leave you with a completely tax-free investment, investing during the stamp duty holiday is a great way to cut fees for a low-cost venture.

If you feel that you’re ready for buying an investment property to rent with a 50k budget, then you should also make sure you understand how to invest 50k wisely, and this means finding a good property investment company and popular developer to work with to invest money into property. This way, you’ll have more peace of mind in knowing that your funds are safe and your investment is in the right hands.

You should also consider finding a good property management company if you don’t have the time to run the property yourself. This is commonly known as making a hands-off investment or passively investing.

So you know that property investment is a great route to take, but you might still be wondering – what can I invest 50k in when it comes to specific property types?

Off-plan property investment is a type of investment where the development isn’t yet complete before you purchase the property. This kind of buy to let property investment is becoming one of the most popular types of real estate due to the benefits available, such as the potential for capital growth and the fact they’re offered at below-market rates.

Due to their low cost, off-plan investments are particularly appealing for those looking for the best way to invest 50k in property, so if you want to find a high-quality investment with a lot of potential for investment returns and capital growth, buying off-plan is a great way to invest 50k safely.

Again, it is so important to choose a trusted company to work with when buying an off-plan investment. Since you can’t take a tour of the existing development, it’s crucial that the developer has a strong reputation and a track record of producing quality properties.

At RWinvest, we only work with trusted UK property developers for all of our off-plan properties and offer our clients regular construction updates to keep them up to date on the progress of their investment. We also use technology like virtual reality and computer-generated imagery to give investors a better idea of how the property will look once it’s complete, allowing them to make a more informed decision before they start investing in off-plan.

When it comes to the best way to invest 50k, UK investors need to do their research on the best buy to let areas. Location has a lot of influence over the success of a buy to let investment, which is why doing research on the best place to invest 50k in is an essential part of your investing strategy. As with most investments, you can’t find out the best way to invest 50k without knowing about the best locations for what you have in mind.

In the UK, a number of cities are performing well in terms of their property market, with rising house prices, impressive rental yields and growing tenant demand hitting the headlines. While these are the kind of qualities you should definitely look for in an investment, finding the best place to invest 50k in should also involve a lot of focus on average property prices. The lower the average price to buy a property, the better, especially when you’re looking to invest money in property with a budget of £50,000.

When researching where to invest 50k, one of the best UK areas is Liverpool. Not only does Liverpool boast some of the highest rental yields in the UK and plenty of rental demand, but this city is also known for its affordable housing market. When questioning ‘how much money do you need to invest in the UK‘, prices can vary, but Liverpool offers one of the best options for those on a lower budget. According to Zoopla, the average price for a one bedroom flat in Liverpool city centre is currently just £112,574, while the average price for a two-bedroom house is just £123,574 for the city as a whole.

Manchester follows closely behind, with house prices that are well below the cost of properties in the South such as London, but with slightly higher prices than Liverpool. Recent property price predictions from Savills suggest that the North West housing market will see property price growth of 27.3% by 2024. This is a higher expected growth rate than any other UK region, and exceeds past performance of the property market over recent years.

 

The best way to invest 50k in property is to think of this initial investment as the beginning of your property portfolio, or to spread the amount across multiple investments. Building a property portfolio is a great way to increase rental income and is also ideal if retirement planning is your main motive behind investing in the property market.

If you want to know how to build a property portfolio with 50k, there will be different ways to do this depending on your method of investing. If you want to purchase the property outright, buying properties won’t typically be possible with 50k as you’ll only be able to afford one quality investment.

When you begin to make rental returns, however, you can start thinking about making additional investments as a way to spread your investment risk through diversification. By having a wider investment portfolio of properties, you won’t be at risk of losing all your income if one of your ventures was to suffer.

Alternatively, if you’re going to use a buy to let mortgage for your investments, you’ll be able to build your portfolio more quickly by spreading your 50k budget across multiple properties. Do your property market research on the best areas to invest in and try to make your portfolio as diverse as possible by choosing some variety in rental yields, property type and house price.

Keep in mind, however, that if you’re buying off-plan properties, you may struggle to secure a buy to let mortgage, in which case you will need to pay for the property outright or by utilising payment plans.

Make Sure You’re Financially Ready

Investing is a big commitment, whether you have £50,000 or are trying to work out how to invest 1 million pounds. So, before you go through with investment in a rental property, one of the biggest pieces of financial advice is that you need to make sure you’re ready. The best way to invest £50,000 is to do it at a time when you feel financially secure enough to do so.

If you have a significant amount of savings and you’ve set yourself a budget of 50k, then you know you can invest 50k safely without it massively impacting your financial situation if things don’t go to plan. However, if you’ve been saving money for a long time and the 50k you’ve saved is essentially your only cash savings, you’ll want to reconsider pooling all this money into an investment and instead focus on your personal finance a little longer.

After all, you need to have some savings left for things like emergency funds. To get a bit more clarity on whether you’re managing money correctly, it might be worth meeting with financial advisers who can offer money tips and help you make your decision whether or not to invest.

Keep in mind that there are also taxes that need to be paid for a buy to let investment, such as income tax and stamp duty tax. The stamp duty holiday, which is set to last until March 2021, allows investors to make significant savings on their property ventures. While this won’t leave you with a completely tax-free investment, investing during the stamp duty holiday is a great way to cut fees for a low-cost venture.

If you feel that you’re ready for buying an investment property to rent with a 50k budget, then you should also make sure you understand how to invest 50k wisely, and this means finding a good property investment company and popular developer to work with to invest money into property. This way, you’ll have more peace of mind in knowing that your funds are safe and your investment is in the right hands.

You should also consider finding a good property management company if you don’t have the time to run the property yourself. This is commonly known as making a hands-off investment or passively investing.

Invest in Off-Plan Property for the Best Investment Potential

So you know that property investment is a great route to take, but you might still be wondering – what can I invest 50k in when it comes to specific property types?

Off-plan property investment is a type of investment where the development isn’t yet complete before you purchase the property. This kind of buy to let property investment is becoming one of the most popular types of real estate due to the benefits available, such as the potential for capital growth and the fact they’re offered at below-market rates.

Due to their low cost, off-plan investments are particularly appealing for those looking for the best way to invest 50k in property, so if you want to find a high-quality investment with a lot of potential for investment returns and capital growth, buying off-plan is a great way to invest 50k safely.

Again, it is so important to choose a trusted company to work with when buying an off-plan investment. Since you can’t take a tour of the existing development, it’s crucial that the developer has a strong reputation and a track record of producing quality properties.

At RWinvest, we only work with trusted UK property developers for all of our off-plan properties and offer our clients regular construction updates to keep them up to date on the progress of their investment. We also use technology like virtual reality and computer-generated imagery to give investors a better idea of how the property will look once it’s complete, allowing them to make a more informed decision before they start investing in off-plan.

Research the Best Place to Invest 50k

When it comes to the best way to invest 50k, UK investors need to do their research on the best buy to let areas. Location has a lot of influence over the success of a buy to let investment, which is why doing research on the best place to invest 50k in is an essential part of your investing strategy. As with most investments, you can’t find out the best way to invest 50k without knowing about the best locations for what you have in mind.

In the UK, a number of cities are performing well in terms of their property market, with rising house prices, impressive rental yields and growing tenant demand hitting the headlines. While these are the kind of qualities you should definitely look for in an investment, finding the best place to invest 50k in should also involve a lot of focus on average property prices. The lower the average price to buy a property, the better, especially when you’re looking to invest money in property with a budget of £50,000.

When researching where to invest 50k, one of the best UK areas is Liverpool. Not only does Liverpool boast some of the highest rental yields in the UK and plenty of rental demand, but this city is also known for its affordable housing market. When questioning ‘how much money do you need to invest in the UK‘, prices can vary, but Liverpool offers one of the best options for those on a lower budget. According to Zoopla, the average price for a one bedroom flat in Liverpool city centre is currently just £112,574, while the average price for a two-bedroom house is just £123,574 for the city as a whole.

Manchester follows closely behind, with house prices that are well below the cost of properties in the South such as London, but with slightly higher prices than Liverpool. Recent property price predictions from Savills suggest that the North West housing market will see property price growth of 27.3% by 2024. This is a higher expected growth rate than any other UK region, and exceeds past performance of the property market over recent years.

 

Build up a Property Investment Portfolio

The best way to invest 50k in property is to think of this initial investment as the beginning of your property portfolio, or to spread the amount across multiple investments. Building a property portfolio is a great way to increase rental income and is also ideal if retirement planning is your main motive behind investing in the property market.

If you want to know how to build a property portfolio with 50k, there will be different ways to do this depending on your method of investing. If you want to purchase the property outright, buying properties won’t typically be possible with 50k as you’ll only be able to afford one quality investment.

When you begin to make rental returns, however, you can start thinking about making additional investments as a way to spread your investment risk through diversification. By having a wider investment portfolio of properties, you won’t be at risk of losing all your income if one of your ventures was to suffer.

Alternatively, if you’re going to use a buy to let mortgage for your investments, you’ll be able to build your portfolio more quickly by spreading your 50k budget across multiple properties. Do your property market research on the best areas to invest in and try to make your portfolio as diverse as possible by choosing some variety in rental yields, property type and house price.

Keep in mind, however, that if you’re buying off-plan properties, you may struggle to secure a buy to let mortgage, in which case you will need to pay for the property outright or by utilising payment plans.

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Alternative Ideas on What to Do With 50k

What If I Want The Best Way to Invest 50k for Short-Term Returns?

If you have a budget of £50,000 and you’re looking for the best way to invest 50k in the short term, buy to let may not be your best property investment option. While buy to let does offer you short-term returns in the form of rental income, you won’t generate a large lump sum of money until you sell the property. If your financial goal is to generate the full return on your investment fast, then investing in a property renovation project is likely to be your best bet.

You might be wondering, ‘what can I invest 50k in without using a buy to let mortgage?’, but property renovation projects, also known as buy to sell, are actually a perfect way to find more affordable options and the best way to invest 50k with cash.

With a property renovation project, investors will purchase a property that needs some refurbishment. Because they’re in need of an update, these types of investments are normally priced much lower than other properties on the market. The aim is to renovate the property to a high standard in the hope that when it goes back on the market, it will have significantly grown in value. The best way to do this is to focus on the most affordable cities with the fastest-growing property market.

In this case, Liverpool would be a great city to focus on as you can often find flats or terraced houses for £50,000 or less, while property prices are forecast for impressive growth. The only downside to this type of property investment is that you need to have expert knowledge of the industry to make sure you renovate the property in the best way. If you’re a beginner investor who wants to know how to invest 50k wisely, you may want to explore other options.

What to Do With 50k If I Don’t Want To Commit to A Major Investment?

If you want to know what to do with 50k without investing in property or stocks and shares, there are other options out there. One idea is to put your money into an ISA in order to maximise your savings. There are a range of different ISA’s out there, from lifetime ISA’s to cash ISA’s to stocks and shares ISA’s, however, the maximum amount you can deposit into an ISA is £20,000, so you would only be able to do this with part of your 50k.

You could also purchase some premium bonds, although keep in mind that this won’t offer the best return on £50,000 investment. While strategies like buy to let will generate higher returns than these options, ISAs and premium bonds are a good way to ease yourself into the investment world before committing to a more serious investment.

When researching where to invest 50k, one of the best UK areas is Liverpool. Not only does Liverpool boast some of the highest rental yields in the UK and plenty of rental demand, but this city is also known for its affordable housing market.

Amy Jackson, RWinvest

How to Invest £50,000 – What’s the Best Way to Invest £50,000 for Income From Buy to Let?

 

  1. Make sure you’re financially prepared to make an investment.
  2. Opt for the buy to let market instead of the stock market.
  3. Consider off-plan investments as a more affordable option.
  4. Research locations to find out where to invest 50k for the best returns and lowest prices.
  5. Contemplate building a wider property portfolio.

Get in Touch With RWinvest today

If you’re still unsure of how to invest 50k in property, want to invest a 100k budget, or if you have any questions about the buy to let investment market, contact RWinvest. We can offer you guidance to help you start investing and help you secure your ideal opportunity for lucrative investment returns. For more information on getting started in property investment, take a look at our beginner’s guide to buy to let property.

 

Disclaimer

The content in this guide to the best way to invest 50k is offered for informational purposes and should not be taken as investment advice. If you’re looking for financial advice, we’d suggest seeking the expertise of a financial advisor before investing your money.

This guide to the best investment for £50,000 was last updated in October 2020.

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