Do you have £50,000 in cash and are unsure of whether to invest it to generate returns? With the Bank of England refusing to raise interest rates on savings in 2023 and inflation threatening the value of money left in the bank, investing in property is an attractive option. This guide provides an overview of the 6 best ways to invest £50K in property and get the most from your money based on your timeline, risk tolerance, and desired returns.
Whether you want to invest in residential or commercial property, take an active or passive approach, maximise cash flow or aim for high capital gains, there are opportunities to match your investment goals.
Here’s a summary of how to invest £50K in property via 6 methods:
Continue reading to properly understand how you can get the best out of these strategies.
One of the best ways to invest £50K in the UK is through the purchase of buy-to-let property developments. These are properties with a high-profit turnover, given the potential for recurring revenue and capital gains.
To invest £50K in a buy-to-let property, consider purchasing a rental flat or apartment. They often have high rental yields, and at Baron & Cabot, our team of property development experts can guide you through finding a suitable investment property based on your financial goals.
With a £50K budget, you have these options:
Baron & Cabot property consultants have a proven track record of helping investors maximise returns. We conduct thorough due diligence on all properties to ensure the best opportunities. Our experts can determine the optimal investment strategy based on your financial goals and risk tolerance. Book a call with one of our property investment strategists today to get started.
A Real Estate Investment Trust (REIT) is a company that owns and operates income-producing real estate or real estate-related assets. REITs allow individual investors to earn a share of the income produced through commercial real estate ownership without actually having to purchase individual commercial property. And with a £50K investment, your REIT options are endless.
The two main types of REITs are equity REITs and mortgage REITs.
Equity REITs own and operate real estate, generating income through the collection of rent. Mortgage REITs invest in mortgages and mortgage-backed securities, generating income through interest payments and the sale of the underlying assets.
REITs offer several benefits to investors, including:
REITs have some disadvantages that you must be aware of, too.
You should consider property crowdfunding if you’re curious about how to invest £50,000. Property crowdfunding platforms allow investors to put money into property deals without having to buy an entire property. With £50K, you could invest in a variety of residential or commercial property deals on platforms like Property Partner, CrowdProperty or Crowd2Fund.
These online platforms source property deals from developers and then allow investors to contribute money in exchange for a share of the rental income and capital growth. Usually, the minimum investment is quite low, often just £500, so with £50K, you could spread your money across multiple properties to diversify risk.
The advantages of property crowdfunding are that you get exposure to professional property deals without the hassle of managing the properties yourself. The platforms handle everything from sourcing and evaluating the deals to sorting finance and insurance, managing tenants, and maintenance. As an investor, you simply browse the available deals, choose what you want to invest in and then start earning monthly returns straight away.
Property crowdfunding also has certain downsides. For example, there’s a chance that rental income could fall, tenants may default, or property values may go down, which could impact your returns or even capital. The platforms also charge fees, typically 1-2% a year of the amount invested, which eats into your returns.
When you partake in property crowdfunding, you don’t own the property like when you purchase a buy-to-let property development, depriving you of certain benefits. Historically, property prices appreciate over time regardless of the market condition. Investors who choose to purchase a buy-to-let have the benefits of capital gains. On the other hand, dividends obtained from a property crowdfunding platform are subject to market conditions, which can result in the loss of investment.
It all comes down to your investment goals. If you do invest, make sure to do thorough due diligence on the platforms and specific deals. Examine the platform’s track record, paying attention to how long they’ve been operating and reviews from other investors. Also, only invest money that you can afford to have tied up for several years in case it takes time to find new tenants or sell the properties. At the end, you’re better off putting your £50K into a new-build property investment than in a crowdfunding platform — contact Baron & Cabot to get started!
One of the riskiest but potentially highest reward strategies when considering how to invest £50K in the UK is house flipping. This property investment strategy involves purchasing a property, renovating and improving it, and then selling it quickly for a profit.
With £50,000 as your budget, here are 5 steps you can take to get started with house flipping:
With the right property choice, financing, renovation plan, and marketing strategy, house flipping can be a lucrative way to invest £50,000 in property. But your goal should be making enough profits that afford you your own buy-to-let property eventually. Owning your property is always more profitable in the long run, and you can either begin with an outright purchase now (starting with a 20% down payment) or utilise the buy-to-flip route.
Purchasing a vacation rental property is one of the best investments with £50K for generating income from short-term lets. Vacation rentals, such as holiday homes, cottages, and apartments, are in high demand in popular tourist destinations.
With £50K, you can purchase a property with a mortgage and rent it out to generate an income from rental fees and thereafter, capital gain when you sell the property. The key is to find a property in an area where tourism is steady or growing, such as coastal resort towns, the countryside, or major cities. Look for a property in the best UK areas for Airbnb that appeals to different types of visitors, from families to couples to corporate clients; a multi-purpose property with flexible space is ideal.
Here are 5 key points to consider before purchasing a vacation rental:
With the right approach, a vacation rental property can provide an ongoing income stream and significant capital gains. Baron & Cabot can help you secure properties in high-demand areas with suitable, low maintenance that appeal to a wide range of visitors. Contact us now to get started.
Commercial property offers attractive investment opportunities for those looking for the best way to invest £50K in property. Unlike residential property, commercial real estate is purchased or leased specifically to generate revenue from businesses.
Here are 5 great options to consider:
Once you determine the optimal commercial property type for your investment goals, thoroughly vet any opportunity to make an informed purchase. Analyse location, tenant history, lease terms, building condition, and potential capital appreciation to identify high-return, low-risk investments poised to maximise your £50,000.
However, be informed that commercial properties are generally risky. Also, considering that commercial properties are more expensive than residential options, you’ll need a high-interest mortgage to complete your purchase. A safer property investment option is purchasing a buy-to-let development by partnering with property investment experts like Baron & Cabot.
To maximise your returns when making a £50K investment in UK property, consider these 6 expert property investment tips:
Don’t put all your eggs in one basket — once you have enough capital to buy more properties, spread your investment across different locations to minimise risk. You may build a diverse property portfolio by investing in a mix of buy-to-let flats and apartments across various cities. Diversification allows you to take advantage of market changes and protects your capital.
The best places to invest in UK property are those with higher rental yields and property price growth. Consider commercial hubs and regeneration areas. Analyse current yields, employment opportunities, infrastructure projects, and lifestyle amenities to determine potentially high-yielding locations. Some of our top picks for buy-to-let properties are Birmingham and Manchester.
Do your due diligence to determine a property’s fair market value and make an offer below the asking price. Look for motivated sellers or properties that have been on the market for some time. Have a building survey conducted to identify any faults you can leverage to negotiate a lower price.
Negotiating the best deal for a property requires experience and dedication to learning. If you’re not willing to go through the stress of scouting for properties, consider consulting property investment experts like Baron & Cabot — we handle everything on your behalf. This is particularly helpful for international investors looking to buy UK property but can’t take frequent trips to inspect properties in person.
You can increase a property’s value through renovations and improvements. Consider a loft conversion, kitchen/bathroom upgrade, or landscaping the garden. Choose updates that will attract high-quality, long-term tenants and yield the best return on your investment. Compare the cost of any work to the potential increase in rent and property value. Since your budget is £50K, you might want to consider getting a mortgage with a down payment of not more than £30K; this lets you renovate the property with the rest of your budget.
While mortgages allow you to buy an investment property with a minimal down payment, we recommend you leverage with caution. Only take on as much debt as you can comfortably service if rental income fluctuates. Moreover, interest rates may rise in the future, increasing your costs. A good rule of thumb is to borrow no more than 80% of a property’s value.
To maximise your returns, you must actively manage your investment property. Market your £50K investment to find quality tenants, conduct regular inspections, handle any maintenance issues promptly, review and increase rents when appropriate, and stay up-to-date with the latest regulations. While you can manage the property yourself to save costs, consider hiring a professional property management company, especially if you have a busy schedule.
Following these tips from industry experts will help you achieve the highest possible returns when investing £50,000 in UK property. With the right strategy and execution, you can build a profitable investment portfolio and generate substantial returns.
With £50K, you have a wide range of options for investment and personal development in the UK, including:
Remember, each of these options has its own risks and benefits — what works best for you will depend on your personal circumstances and risk tolerance. It’s generally recommended to seek advice from property investment experts before making significant financial decisions.
Investing in property with a budget of 50K is possible, although it might come with certain limitations. Your budget can’t purchase a property outright, so you need a mortgage to finance the property. While mortgage interest can diminish your profit initially, focus on the long-term returns of property investment.
Finding where to invest £50K in the UK property market might be a bit challenging, especially in larger cities. However, there are certain areas in the country with such property prices, mostly in Wales and the northern parts of England. These can include cities like Bradford, Sunderland, and Liverpool or certain areas in Wales like Rhondda Cynon Taf.
Note that properties in this price range are likely to be auctioned properties, in need of renovation, or located in less popular areas. Therefore, it’s always crucial to do thorough research before making a purchase.
On the other hand, you can consider financing your purchase through a mortgage. This will give you a market advantage while allowing you to profit over the long run. Some of the best areas to purchase a new-build property, starting with a 20% down payment, are Manchester and London.
Of the 6 best ways to invest £50K in property covered in this guide, buy-to-let investment is the most likely to achieve solid returns. The key is partnering with experienced property investment specialists who can help you navigate the market and find the right opportunities. At Baron & Cabot, our team of property investment experts have helped clients build portfolios and maximise returns for several years. We can help you, too — contact us today to get started!
Disclaimer: Any information provided by Baron & Cabot does not constitute financial advice and is for educational purposes only.