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How to Invest £150k in Property - What's the Best Way to Invest £150k?

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    Essential Steps Before Investing £150k

    As we enter 2024, you may consider investing as a way of earning extra income.

    Be it a passive income you earn while freeing yourself up to work a regular job or do other activities, or a more active way of earning money outside of the traditional 9-5, more and more people are looking into investing their money to help make their wallets a little deeper.

    If you find yourself looking to invest £150k, then you’re in luck! This is a very versatile amount of money that opens up multiple different investment options for you.

    Before we get into the different property investment strategies you should consider, you need to ask yourself several important questions.

    No investment is risk-free, after all, so make sure your personal finances are in order.

    Please note that always contact a financial adviser if you want specific financial advice. They will have more in-depth knowledge and will be able to give you advice better suited to your financial situation.

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      What To Ask Before Investing £150k

      What are my Investment Goals?

      Before you put £150k anywhere, you need to understand that this is a lot of money and should not be thrown away lightly.

      You need to figure out your financial goals for any investments you make, which will help determine your overall strategy.

      Do you want to make a consistent passive income or get one large payout as a lump sum?

      Are you looking for something you can make money from quickly or an investment that will grow over time?

      Figure out how much you want to make and how long you expect to invest for this to happen, and this will help you understand what you need to do.

      Long-term Investment or Short-Term Investment?

      Following on from figuring out your investment goals, deciding if you want to invest over a long time or at a faster pace is important. Both strategies have their pros and cons.
      Long-term investments usually give out a higher level of returns, but this will take a longer time, as the name implies. So, if you are happy being patient and playing the long game, this may be for you.

      Alternatively, short-term investments typically often last no longer than six months. While some investment strategies may bring you a high return, the likelihood of this is low, meaning it is more realistic to assume your returns will be lower than the average long-term investment.

      How Much Do I Want to Invest?

      Given the title of this blog post, this may seem like a silly question until you take diversifying your investment portfolio into account.

      Diversification means spreading out your money across multiple investments, so if one fails, you will not lose as much. If you are wondering how best to invest £150k for income, having a diverse profile gives you the best of multiple worlds.

      Understand Your Risk Tolerance

      No investment is risk-free, and there is always the chance, however slim, that you lose the money you have invested.

      Make sure you understand this and decide how big a risk you want to take when investing.

      Decide what level of risk you are willing to tolerate before putting your money into any form of investment, as you may find yourself biting off more than you can chew otherwise.
      With all that out of the way, let’s get into how best to invest £150k in the UK in property!

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      6 Ways to Invest £150k

      £150k is a very flexible amount of money, which opens up a range of investment opportunities for you.

      Here are six types of Property investments that we think would suit this budget, along with a range of investment goals and risk tolerances.

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        Buy-to-let Property Investment

        1. Buy-to-Let Property

        Cost: 4/5

        Potential Returns: 5/5

        Long-Term or Short-Term: Long-Term

        Potential Risks: 2/5

        One of the most exciting investment strategies as we begin the new year is buy-to-let investment properties.

        This strategy involves you owning properties you do not live in and renting them out to tenants, with the rental income acting as a consistent cash flow of passive income for you.

        Rents have been rising steadily for several years now, with Homelet’s Rental Index reporting that rent across the UK rose by 9.4% in 2022. This means that you are likely to have more rental income as time goes on.

        On top of this, properties will rise in value over time, so when it comes time to sell your investment property, you will likely be in line for a substantial profit.

        As an example, house prices in the UK rose by 12.6% from October 2021 to October 2022. This means if you bought a property for £150k in 2021, you would likely be able to sell it for £168,900 just a year later, bringing you nearly £20,000 of profit in just one year!

        While you will need to pay Capital Gains Tax on this, it will still end up being a sizeable chunk of money in your pocket as an extra monthly income.

        If you are wondering how to invest £150k for one year, buy-to-let property investment might be a better plan than you thought.

        However, with the average price of property rising so rapidly, this investment strategy will likely take up the majority of your budget. If you are looking to diversify your investment portfolio right off the bat, this may not be for you.

        That being said, there are bargains to be found. If you are interested in learning how to invest £150k in real estate, try looking at some of the best places to invest in the UK, which have prices far lower than the national average. Liverpool, for example, has an average property price of £180,049.

        If you are savvy with how you, such as borrowing a buy-to-let mortgage or using a payment plan to spread out the cost of purchasing your investment, you can buy a property worth more than this using your initial budget of £150k.

        Property also comes with a higher level of security than other forms of investment. As a physical asset, it is unlikely to see it lose value rapidly as liquid assets such as cryptocurrency might do. As such, it is a more secure investment strategy for those with a low-risk tolerance.

        The housing market has proven time and time again its ability to endure tough times where other forms of investment struggle, such as the 2008 financial crisis and the COVID-19 pandemic. After all, how often have you heard the phrase ‘safe as houses?’

        With all of these benefits and very few negatives, it is easy to see why many view property as one of the best things to invest in right now, and you can easily find high-quality investment properties for sale with a budget of £150k or less.

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        2. Off-Plan Properties

        Cost: 3/5

        Potential Returns: 5/5

        Long-Term or Short-Term: Bot

        Potential Risks: 4/5

        Off-plan investors purchase a property while it is still in construction, often for a below-market value price.

        As these properties are new-builds, they are more highly sought after by renters and buyers alike due to the state-of-the-art designs and facilities on offer.

        The key to success with this strategy lies in finding the right area to invest in.

        Cities like Liverpool and Manchester are some of the most popular choices with investors, offering a steady stream of potential tenants with their flourishing young professional population. Learn more about how to invest in property with RWinvest today!

        Unlike purchasing a completed property – which typically involves placing a deposit and regular mortgage repayments to cover the full property price – off-plan offers a convenient payment structure, allowing buyers to divide the total cost in separate instalments, starting with a reservation deposit and culminating in the final payment upon completion.

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          3. Holiday Lets

          Cost: 3/5

          Potential Returns: 5/5

          Long-Term or Short-Term: Both

          Risks: 4/5

          For investors seeking substantial returns, Holiday Lets offers a compelling opportunity to capitalise on the growing demand for vacation rentals and business accommodations. Investors can generate significantly higher income than traditional buy-to-let properties by catering to holidaymakers and business travellers seeking temporary stays.

          However, unlocking the full potential of holiday lets requires a strategic approach that carefully considers seasonal demand fluctuations and void periods. Investing in properties located in popular tourist hotspots or business hubs can maximize rental profits and ensure a consistent monthly income stream.

          While this strategy can present enticing returns, it’s important to acknowledge their riskier nature. Economic downturns can lead to dips in rental income, requiring investors to be more adaptable and prepared for potential fluctuations.

          Off-Plan Property

          4. Savings Accounts

          Cost: 1/5

          Potential Returns: 2/5

          Long-Term or Short-Term: Short-Term

          Potential Risks: 1/5

          For those with an especially low-risk tolerance or investors who are undecided as to how they want to invest their money, savings accounts offer a secure alternative to other forms of investment. They are a kind of bank account designed for depositing large amounts of money long-term.

          By depositing your money with a bank or credit union, you can rest easy knowing your money is safe and accruing interest over time. Savings accounts are a hands-free investment strategy which gives you peace of mind.

          Savings accounts can offer investors an investment option that is tax-free for low amounts of money, as you can get up to £5000 worth of interest tax-free, depending on your income.

          While this is a very safe way of investing, it is not likely to bring you much profit. The average interest rate of savings accounts in the UK is 0.61% APY as of Dec. 06, 2023.

          This means they are not suited to long-term investment strategies, as it will take too long to achieve any real returns. While you can find accounts with higher interest levels, these might have a limit on how much you can deposit in them.

          Instead, try to consider savings accounts as a short-term investment strategy to allow you to save for a big expense or as a way of securing your money whilst you decide on a longer-term investment strategy.

          Buy-to-Let Investment Guide

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          5. Commercial Buy-to-Let

          Cost: 2/5

          Potential Returns: 4/5

          Long-Term or Short-Term: Short-Term

          Potential Risks: 3/5

          Unlike traditional buy-to-let, which focuses on residential properties, commercial buy-to-let involves acquiring commercial buildings, such as office blocks or retail spaces, and leasing them to businesses.

          Advantages of Commercial Buy-to-Let include:

          • Longer Lease Periods: Commercial properties typically have longer lease agreements compared to residential properties, often extending for several years. This provides investors with greater stability and predictability in terms of rental income.
          • Potential for Higher Returns: Commercial properties often command higher rental rates than residential properties, leading to the potential for increased rental income.
          • Diversification: Investing in commercial property can diversify an investment portfolio, potentially mitigating risks associated with solely focusing on residential properties.

          However, commercial properties can be sensitive to economic fluctuations. During periods of economic downturn, businesses may face challenges, potentially leading to increased vacancy rates and reduced rental income. Therefore, investors should carefully consider the potential impact of economic cycles on their commercial property investments.

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            6. Student Property

            Cost: 3/5

            Potential Returns: 2/5

            Long-Term or Short-Term: Long-Term

            Risks: 2/5

            Student property investments are specifically tailored to cater to the rental needs of university students. These investments offer a unique opportunity to tap into a consistently high-demand market, providing a steady source of rental income and the potential for capital appreciation.

            • Purpose-Built Student Accommodation (PBSAs): These are specially designed complexes specifically intended for student housing. PBSAs often offer a range of amenities, such as study areas, common rooms, and laundry facilities.
            • Houses in Multiple Occupations (HMOs): These are existing houses that have been converted to accommodate multiple tenants, typically students. HMOs offer a more traditional living arrangement compared to PBSAs.

            The high demand for student accommodation and the prospect of value growth make this investment strategy attractive for those with a long-term investment horizon. However, careful consideration of factors such as location, property condition, tenant management, and regulatory compliance is essential for successful student property investment.

            Why not read about the latest investment property available in Wolverhampton with our free Buy to let guide?

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              How Best to Invest £150k?

              Simply put, there is no single way to invest that will work for everyone. Even if you have the same investment fund as another investor, your goals, risk tolerances, and experiences will change how you want to invest your money.

              We believe property investment offers the best combination of high returns, security and affordability to fit the needs of most investors. If you are wondering how to invest £150k, this is probably going to be a good answer for you, if not the best.

              However you choose to invest, remember to organise your personal funds and contact a financial advisor before you put your money anywhere.

              Here at RWInvest, we have over 20 years of experience in the UK property investment market, and our dedicated teams work day and night to find our clients the best opportunities in the country.

              As one of the nation’s top property investment companies, we pride ourselves on helping clients through every step of their investment journey thanks to a rigorous and detailed sales process.

              If you want to learn more about different forms of investing, try reading our guide to 20 investments that will get you monthly income for more information about different ways of investing.

              If you have a slightly different budget available, we also have guides on how to invest other amounts of money, such as:

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              Reece Pape

              Reece Pape is a property writer at RWinvest. Reece is passionate about keeping property investors updated on must-have information and housing market news, utilising the latest property market statistics and data.


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