The Best Way To Invest 10k In The UK

How to Invest 10k

What can you do with ten grand? Buy a new car? Take a holiday somewhere exotic? Sure, you can do these things, but then the money is gone and you have little to show for it (well, except the car, which can only depreciate). If you have a nest egg saved up, have had a windfall or an inheritance of a few grand and want to invest 10k wisely, you have come to the right place. We can show you the best way to invest 10k in the UK by following the tips below.

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How To Invest £10,000 In Property

It’s pretty unlikely that you will be able to invest 10k on a property in the UK. Most properties will need at least a 25% deposit, so unless the property is selling for just £40k, then it is just not enough for this kind of investment. Also, property investment requires more than a deposit – you will also need some to come up with legal fees plus money for any refurbishments that the property may need.

Don’t be put off though – we will show you how to invest 10k and start making money with our tips.

Investment Advice For Beginners

Invest 5k in Your Development

If you are new to the game, the best investment for 10k you can make is to use some of your money on yourself – by learning more about investing in property. You could spend 5k on some advanced training in property investment and still have some left over to play with. Take a look at some of the courses and boot camps we offer to start your journey in the world of property investment.

We strongly advise that you get yourself a mentor who can guide you on your journey of investment and offer valuable advice and expertise. You should also make the time to meet more property experts – they can provide you with insider tips and help hold you accountable in a way that passive learning from podcasts and YouTube videos simply cannot.

Invest 5k In ‘Rent-to-Rent’

Once you have used some of the money on some advanced training in property investment, you can take your remaining 5k and use it to get started in property with the ‘rent-to-rent’ model. Also known as guaranteed rent, how it works is that you rent a property, usually for a fixed period. You pay the owner or the letting agent of the property and then rent that property out to tenants for a higher rent than you are paying. There are several advantages to rent-to-rent:

You don’t need a lot of money for rent-to-rent. Unlike other forms of property investment, you really can get started with as little as £5k.
Many landlords or property owners will consider accepting a slight rent reduction if you can pay upfront or provide ‘guaranteed rent’ every month, or in advance.
You can maximise your profits by turning a property into an HMO (house of multiple occupancy) and renting to more tenants, or by offering serviced accommodation in the form of short-term lets.

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The Benefits of Short-Term Lets

Offering short-term lets is one of the fastest-growing property strategies in the UK. Basically, you rent the rooms in the property out on a night-by-night basis, often to holidaymakers, visitors or contractors who only need to stay for a short time. Many people would rather have the home comforts of a house or apartment over a hotel, and you can charge more than you would make on a regular long-term rental.

This strategy requires little cash to get started and has few overheads, but offers maximum returns in a relatively short time. For example, let’s say you are renting a 3-bedroom property for £1200 per month. You could rent that out long-term to three people and charge £600 to each of them, which will make you a little profit, or could you rent each room out at a rate of £50 per night, giving you a potential turnover of £4,500 per month, and make significantly more profit.

Remember that if you want to use the rent-to-rent model or offer short-term lets, you aren’t looking for ‘fixer-upper’ properties that require a lot of time and work to be market-ready. What you will need to find is a property that is already in good condition, as you won’t have to invest any more money on decor or new fixtures and fittings.

You can use websites like Airbnb or booking.com to advertise your short-term lets. Many short-term renters will be looking for certain amenities to be available to them such as a cleaner or laundry service, so bear this in mind when constructing your offer. Take a look at what else is available in the same area and what they offer, so you can see what you have to compete with.

The average net profit you could make from your initial investment of £5k is as much as £12k per year, which is an excellent start. In just 5 years you could have amassed £60k in passive income, all from that initial outlay of just £5k. This is also a great way of getting your foot in the door of professional property investment and helps to build your confidence as an investor.

If You Are Already An Investor

If you already have some experience in investing, maybe you have already made a few deals or have taken a course in property investment, then our advice is slightly different. You can invest 10k in the same way but have two properties instead of one. This way, you can double the return on your investment, netting you a potential £24k per year! Think about how that amount of money could change your life – you could also use it as a source for larger investments and achieve financial freedom, whether that means benefiting from multiple income streams, flipping more homes, or whatever strategy aligns with your own goals and lifestyle.

Things To Remember

As with any kind of investment, the rent-to-rent strategy is not completely free of risk, and there are a few things you should be aware of before diving in. Read on for some valuable advice before you invest 10k in the property market.

Check on local rules and regulations and make sure that the property can be sublet legally. There’s nothing illegal about subletting in general, but the landlord and you must both agree to the terms and specify them in the contract.
You must be ready to make up any shortfall if the property is not rented out at all times. Bear in mind that it’s unlikely that the property will be occupied every single night – work out how much you need to break even and work on meeting this goal every month.
As mentioned previously, tenants of serviced accommodation have come to expect a certain level of service and amenities, so take some time to put together a tempting offer that won’t cut into your bottom line too much.
Don’t rush into things! Take your time to do research in the area you are thinking of investing in, talk to others who have done the same thing and take on their advice.

Before you go …

All of these tips can help you learn the best way to invest 10k, and get you started on your journey to generating that all-important passive income and help you build up some serious capital. Want to know more about the world of property investment? Why not join us for one of our FREE property events?