Jasmine Birtles
Your money-making expert. Financial journalist, TV and radio personality.
Investing in property can be a good way to invest your money for the longer term. We’ve all spent a lazy morning in front of Homes Under The Hammer and thought to ourselves, “I could do that”.
But does investing in property really turn a profit every time? Tying up your capital in bricks and mortar means you don’t have that cash to invest in other options like stocks and shares.
However, if you’re savvy about buying property for profit, you could make a much bigger return in a shorter time than other long-term investment routes.
So, what should you do? This guide to investing in property will outline the things you need to think about before you invest – as well as 3 ways to invest in property in the UK.
Before you jump in and put your money into a property investment, it’s important to take stock of your current financial situation to determine whether or not this is a good investment opportunity for you.
Firstly, you must consider whether investing in property is right for you.
Ask yourself these questions:
If you’re planning on renting your house out it will mean your money is tied up and, unlike some other forms of investing, it can take a long time to access your money.
The longer you own a property, the better the investment (usually). However, if you think you want to ‘flip’ a house quickly, what will you do if you can’t find a buyer?
If you’re renting your property out to maximise the returns, you’ll need to put in a lot of time and energy, too. Can you afford that – or a management agency – or would a profit from a quick sale suit you better?
Buying property has a lot of fees attached, from mortgage arrangement fees to conveyancing charges. After you own the property, you may need to complete renovation work, pay to extend the leasehold, cover mortgage payments during empty months on a rental property… You need to work out all of the costs before you decide to invest.
As with all investments there is also risk: property prices and demand for rented accommodation can rise and fall so there are no guarantees.
If, after saying yes to the questions above, you feel investing in property is right for you then you should, if possible, have a diverse portfolio of investments so when the housing market slows down you don’t feel the pinch. In other words, don’t put all your money in property, and certainly don’t put it all into one house.
Other investments you might have include shares, bonds, gold and even art. Here at MoneyMagpie we’re always saying that you need to spread your bets. It’s always good to have another source of income so you can wait out the slow periods and make the most of having a long-term investment.
When most people think of property investing, their mind goes to securing a mortgage and buying a house.
Although this is certainly the most popular way to invest your money, it isn’t the only option out there!
In the following section, we will take a look at 3 different ways that you can invest in property in the UK including buying a home, investing in REITs and investing in property abroad.
Something to think about: Property investing in the UK is not limited to the 3 options that we have mentioned above. In fact, there are numerous different ways to make money from property investing in 2025. For example, here are 3 ways to invest without buying property.
We recommend exploring all of your options before deciding on one route.
Let’s start with the most popular way to invest in property in the UK.
Buying a house is undoubtedly one of the most common investments in the UK. Millions of new homeowners enter the property market each year with hopes of buying a home that will eventually increase in value.
There are three primary ways that you can turn a profit from buying a property: capital appreciation, buy-to-let and property flipping.
Capital appreciation refers to the tendency for house prices to increase over time. House prices in the UK have increased by around 78% over the last 20 years, providing substantial returns for homeowners.
The second way to turn a profit from your investment is to buy a house to rent out (also know as buy-to-let). This is a more hands-on option that allows you to profit from both capital appreciation and monthly rental income.
Lastly, flipping property involves buying an old (often run-down) property for a low price, fixing it up, and then selling it on for a profit. If you know how to spot undervalued opportunities, flipping can be a very lucrative venture.
‘Flipping’ a house is what you’ll see on property auction programmes like Homes Under the Hammer: you buy a property in need of renovation, complete the works, then sell for a profit.
Alternatively, you can buy a property to become a landlord.
Make sure you know which one you want to do before you get a mortgage: the rates and fees are different depending on whether you intend to make the property a buy-to-let investment.
In his book, Property Tycoon, Ian Samuels recommends that if you want to make the most money from your property, you should be buying to let. “House flipping is harder and more expensive than you might think,” he says. “It requires deep pockets, and, even if you make a quick burst of money, buying to let is likely to be the most profitable in the long term. This is particularly true when you consider the cost of Capital Gains Tax each time you sell a property.”
It’s also worth noting that, if you’ve rented out your property for a period of time before you sell it, you can get some relief on your Capital Gains Tax bill. You’ll get additional Private Residence Relief on the time you lived in the home before or after you let it out, too.
There’s always going to be a demand for rental accommodation. Even though mortgage providers are now finding ways to open the market for first-time buyers, costs are still prohibitive for many. Other people prefer to rent over buying, as it gives more freedom to relocate for work or family needs.
If you want to profit from the property market but you don’t have enough money to secure a mortgage, REITs could be a good option for you.
We actually have a whole guide on how to invest in REITs that you should check out to earn more.
In a nutshell, a REIT is a type of investment trust that allows you to pool your money together with other investors to gain exposure to the property market with a lower initial investment.
When you invest in a REIT, you put your money into a company that owns a portfolio of income-generating properties. The income that is produced by these properties is distributed between investors, based on the amount invested.
REITs are a hands-off approach to property investing, suitable for anyone who wants to add property to their portfolio without the hassle of managing a property of their own.
It’s no secret that the UK housing market is pretty difficult to enter right now!
If you want to invest in property but can’t afford to buy a home in the UK, investing in property abroad could be the solution for you!
This option involves buying property overseas and then renting it out as a holiday home on platforms such as Airbnb.
To maximize your profit, you will need to spend time researching the market to find locations that are the most appealing to holidaymakers.
Although this investment opportunity can seem quite exciting (who wouldn’t want to own their own holiday home?), it takes a lot of hands-on management. As a holiday homeowner, you will need to ensure that the property is cleaned and maintained throughout the season, which may require hiring staff.
You’ll need to consider a fair few things before you invest in property in the UK.
1. What’s the current market like? With political turmoil and economic uncertainty, the housing market is unpredictable: buying to rent a property out before you sell it could provide a buffer so you don’t suffer huge losses if house prices drop.
2. Where is it located? Places close to local amenities, public transport links, and good schools will always do well for both rental and ‘flipped’ properties.
3. Who do you want as tenants? Families tend to stay put longer, to keep children in the same schools – but professionals may only want short-term tenancies, which could suit you if you’re planning to sell up fairly quickly.
4. Can you afford the repairs and maintenance on the property? These will be ongoing, even if they’re not major works, and can eat into profit.
5. What other developments are planned in the area? Check the planning permission applications for the local area. Large new housing developments could affect your property price or potential to rent out. Other things, such as new music venues, can also drop property prices. On the flip side, town regeneration plans can significantly increase the value of a property in a short space of time.
1. How much can you afford to invest? Only invest money that you can afford to lose and have locked up for a long period of time.
2. What are your investment goals? Make sure that REITs align with your wider investment goals. To maximize your returns, you may need to hold your investment for a long time which might not be suitable for investors who want to withdraw their funds for a big expense in the near future.
With London’s property bubble unaffordable for most, there could soon be (hopefully!) a drop in the house price value. This means it’s not a good place to invest.
Look outside of London at key areas for economic output, high employment figures, and great transport links. Newcastle, Cardiff, York, Leeds, Manchester, and Liverpool all offer much better value than London but have a high demand for both property buyers and renters.
Properties in Scotland near cities like Edinburgh can also be great investments – but be aware that the purchase process is very different to the rest of the UK.
Huge regeneration projects in Manchester, and the Wirral Waters Scheme in Liverpool, mean the north-west of the UK is becoming a powerhouse in its own right. The ripple effect will extend out to regions with transport links to these cities, such as Stockport, and that means house prices will continue to rise for a while.
However, if you live in London, buying a property elsewhere comes at a different kind of price. If you’re renovating your new property to flip it, you’ll need to spend a lot of time away from home to do this. If you want to rent out the property, you’ll be far away to manage it – and may need to pay a management agency, instead.
We’ll assume you’re not buying the property to live in: you either want to flip it or rent it out. To do this, you’ll need to:
1. Assess how much you can afford to put down for a deposit.
2. Make a budget for house purchase and maintenance fees (mortgage arrangement, conveyancing, etc)
3. Decide whether you want to purchase a buy-to-let or second property to flip
4. Speak to a mortgage broker to find the best deals and get an Agreement in Principle
5. View properties and find one you want
6. Get a survey done – then budget for repairs or negotiate on the offer price
7. Complete the purchase process
8. …
9. Profit!
Just kidding – once you own the house, you’ll need to carry out all renovation and repair works.
Make sure you leave plenty of time and cash in your budget for unexpected repairs. For example, you may find that the house needs new pipes when you’d only wanted to put in a new bathroom suite!
To be eligible for buy-to-let mortgages, you need to be a property owner already. You’ll need to meet other eligibility requirements too – check out our mortgage guides here.
Buying property for profit can mean you’ll see huge returns – if you’re willing to play the long game OR take big risks (such as buying a rundown auction property and doing it up to sell on). It takes a lot of time investment, too – so if you want to grow your wealth without being quite so hands-on, check out our other investment guides to find a less time-intensive way to financial security!
*This is not financial or investment advice. Remember to do your own research and speak to a professional advisor before parting with any money.
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Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.
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