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.