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How To Invest £200k in 2023/24

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    Exploring Lucrative Options with £200k

    If you are lucky enough to be in a position to invest £200k, ensuring your investment will bring positive returns is important. A large amount of money like that could bring you even more in profit, but it could also be lost if the investment fails.

    Therefore, doing your research when preparing to invest £200k is vital. If you would like to learn more about how to invest £200k in property there are several options you should consider.

    In this guide, we will go through some key information on what to consider before investing your money and rank several property investment options you should look at when choosing what to do with £200k.

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      What You Need To Do Before Investing £200k in Property

      There are several things you should do with £200k before you consider investing any money, as even safe investing options come with some level of risk.

      You should also consider what kind of investment you want to make. Think about what financial goals you want to achieve, and this will decide what kind of investment you want to make.

      • Do you want regular income or a lump sum? This will play a key role in what kind of property investment you should make. A regular income is preferable in most cases as it allows for a larger return on your investment, but a lump sum can be useful as well.
      • What is your appetite for risk? Any form of investment comes with risk, but some property investment opportunities are safer than others. Some forms of investment can have massive returns but are also subject to fluctuating market trends.

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      6 Ways to Invest £200k

      Having £200k as a starting point for property investment is a great place to begin a portfolio. Here are six of the most popular methods of investing £200k that our research has found:

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        Buy-to-let Property Investment

        Buy-to-Let Property Investment

        Potential Reward: 5/5

        Potential Risk: 2/5

        Property investment is one of the strongest options for investing £200k in the current market climate. Across the UK, we are seeing record growth in the property market that is expected to continue for years to come.

        Rent from tenants is earned every month so you will have a consistent form of income. Current statistics show tenants pay an average of £1,279 per month in the UK.

        A property’s value goes up with time, so you may choose to sell your property in the future for a profit.

        Property is not a liquid asset, so you cannot immediately sell to see a profit quickly, such as with cryptocurrency or stocks. Property investment could also come with a higher initial cost, as the average house price in the UK is currently £285,009, according to the latest data from the House Price Index.

        However, there are several ways of making it more affordable, such as mortgages and investing in areas like Manchester and Liverpool, where properties are below the average price.
        So, if you are considering investing £200k in 2023/24, property investment is a safe bet.  We recommend making a buy-to let business plan to help you decide on whether property investment is right for you.

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        Short-Term Lets

        Potential Reward: 5/5

        Potential Risk: 3/5

        If you’re looking for a way to earn substantial returns on your investment, short-term lets could be a potentially lucrative option. By renting out properties to holidaymakers or business travellers looking for short-term stays, investors are typically able to generate significantly more income than they would with a traditional residential buy-to-let property.

        However, thorough and strategic research is crucial in order to leverage seasonal spikes in demand and minimise void periods without tenants. So is it worth investing in property? This you can decide after reading through the latest facts and trends of the property market.

        Investing in areas that are regarded as popular tourist destinations or business hubs can enhance short-term rental profits and generate a consistent monthly income stream.

        However, short-term lets may not be the most risk-averse investment option, as they can exhibit lower returns during periods of economic instability.

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          Eco-Properties

          Potential Reward: 5/5

          Potential Risk: 2/5

          Eco-friendly homes and apartments are designed to minimise environmental impact and reduce energy consumption. This is also known as Eco investing.

          These properties are constructed using sustainable building materials and incorporate features promoting energy efficiency, such as triple-glazed windows, high-quality insulation, and energy-efficient lighting and heating systems.

          The growing demand for eco-conscious living has extended beyond homeownership to encompass the investment sector. Investors are increasingly recognising the appeal of eco-friendly properties, driven by their sustainability credentials, energy efficiency, and potential for higher rental yields.

          A recent article by Property Reporter highlighted an increase in younger tenants and buyers seeking greener homes, with 98% of survey respondents (aged 18-34) expressing that they would improve the sustainability of their property if they had the funds to do so. This trend underscores the increasing demand for eco-conscious living among these generations, reinforcing eco-friendly properties as a lucrative investment option.

          These properties often incorporate cutting-edge features that reduce energy consumption and environmental impact, such as solar panels, air source heat pumps, rainwater recycling systems, heat recovery ventilation (HRV) systems, and smart home automation. These features not only make the property more sustainable but also lower the homeowner’s energy costs. Additionally, eco-friendly properties can command higher rental rates, making them an attractive investment option for buy-to-let landlords.

          At the same time, as the transition to a greener future accelerates, eco-friendly properties are poised to become even more valuable assets, offering investors a secure and sustainable source of income.

          Off-Plan Property

          Off-Plan Properties

          Potential Reward: 4/5

          Potential Risk: 3/5

          Investing in off-plan property investments involve purchasing a property that is not yet built or is still in the planning stages. This approach is increasingly popular among investors in the UK’s key cities due to the benefits it offers, such as the potential for below-market pricing and a wider range of unit options.

          Selecting the right location for an off-plan investment is crucial for ensuring long-term success.

          Certain UK regions (such as Liverpool and Manchester) present a higher concentration of off-plan investment opportunities, more attractive property prices, and superior rental yields compared to others.

          As with any investment, off-plan property investment carries inherent risks. However, these can be effectively mitigated and managed with the right knowledge and approach.

          This can include:

          • Risk of Development Failure: Off-plan investments involve committing to a property before it is built, relying on the developer’s ability to complete the project successfully. In some cases, inexperienced or financially unstable developers may encounter unforeseen challenges or delays, leading to project delays or even cancellations.
          • Inability to Physically Inspect the Property: Unlike purchasing a completed property with off-plan investments, investors cannot physically inspect the property before making a decision. They must rely on detailed plans, brochures, and renderings provided by the developer. This lack of firsthand experience with the property can lead to concerns about the quality of construction, the layout, and overall suitability for the investor’s needs.

          With this in mind, investors should carefully weigh the potential benefits against the associated risks and conduct thorough due diligence before committing to an off-plan investment.

          Looking at property investment in Nottingham or properties available for investment in Birmingham are seeing a lot of interest from investors.

          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!

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          Liverpool Investment Guide

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          Student Properties

          Potential Reward: 3/5

          Potential Risk: 3/5

          As the name implies, student property investments are investment properties that specifically target the student rental market.

          The main types of student property investments include:

          • Purpose-Built Student Accommodation (PBSAs)
          • Houses in Multiple Occupation (HMOs)

          Student accommodation provides a stable and dependable source of rental income, as there is a continuous demand from new students seeking accommodation throughout the school year. Additionally, the property is projected to appreciate in value over time, making it a promising investment opportunity for future sale. Learn about some of the alternative property investment strategies available to you with our free guide.

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            House Flipping/Buy-to-Sell

            Potential Reward: 4/5

            Potential Risk: 4/5

            Buy-to-sell, also known as house flipping, is an property investment strategy that involves purchasing a property, renovating it to enhance its value, and then selling it for a profit. This approach often involves collaboration with property developers, who typically oversee the renovation process to align the property with current market trends and attract potential buyers.

            Unlike buy-to-let, where investors generate income through rental payments, buy-to-sell focuses on capital gains from property value appreciation. This strategy relies on a favourable real estate market with high demand and strong market conditions. This strategy is also a very hands-on method of investment, requiring massive levels of expertise and time. Why not review our rental income calculator tool or our popular stamp duty calculator.

            Therefore, whether opting for buy-to-sell or venturing into property development, thorough market research, careful financial planning, and a well-structured strategy are vital to succeed. These are not regarding as short term investments in the UK or

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              What Is The Best Way To Invest £200k?

              There is no right or wrong way to invest £200k, as each investor has their own goals, needs, and risk appetites to consider when investing. All of the investment methods listed here have pros and cons attached to them.

              We at RWInvest believe that property investment offers the best balance between its strengths and weaknesses. With an investment of £200k, there are several exciting opportunities for investment across the UK.

              Our most recent development, Central Park, has investment opportunities available from £159,950, and we also have developments in Liverpool and Manchester with very attractive rental yields available for investment.
              Working with a slightly smaller budget? Read our guide on how to invest £150k for more insight on how to best invest your funds!

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              Author

              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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