How To Invest 20k In Real Estate

  • July 15, 2023
  • July 15, 2023
  • Shaz Nawaz
  • 8 min read

Congratulations! You’ve got money in your bank to the tune of £20,000. But you don’t plan on keeping it there. Fair strategy if you wish to multiply it. Where should you put that money is the question now? You could get some stocks and shares, put it in a pension or simply have it safe in an Individual Savings Account (ISA). Some deviant people even wish to put it all on black. We would highly discourage such plans. We recommend the property market for your money. Along with this suggestion, let us also tell you how to invest 20k in real estate.  

Strategies on how to invest 20k in real estate

Is Investing in Real Estate With £20,000 Practical?

Yes, £20,000 you can use properly to get you started in real estate investing. However, as you might imagine, it’s not a sizable sum of money in real estate, so to really maximise your £20,000, you’ll need to be flexible in terms of location, property type, and investor style. For instance, as you might expect, your £20,000 won’t go very far in London.

Here are the major steps you should take and items to think about if you want to be mindful of how to invest 20k in real estate.

Subtracting £2,000 for costs

After deducting all your expenses and having some money in the bank as a backup in case there is a problem with the property, your £20k becomes more like £18k. You need to set at least 2k apart as the deduction is inevitable.

Smartly select your investment opportunity

Choosing an investment that can boost your investment pot and enable you to optimise your cash flow is undoubtedly the most important step.

Make an investing fund.

This is the most crucial step since, as we’ve already showed, it doesn’t take much money to get started—$20k—so the priority is to accumulate this investment fund. We’ll discuss many tactics and sorts of investments you could make, but you should choose options that will swiftly increase your investment pot; for the time being, you shouldn’t worry about cash flow and should just set aside any profits you make for future reinvestment.

You might make $200 to $300 a month on your £20,000, for example, but that won’t get you financially independent, therefore we advise to keep it until you can increase your monthly earnings.

Increase your cash flow.

It isn’t until you’ve made the best investment decision, amassed a sizeable investment fund, and purchased several properties that you can finally kick back, relax, and enjoy from the cash flow you’ve generated.

It takes a while to reach this point because you need to increase your monthly income from £200 to £300 (£20k) by 10 to 20 times. This is the budget estimate if you want to know how to invest 20k in real estate.

Strategies on how to invest 20k in real estate

Depending on your personal preferences and your budget, we would suggest looking at a few alternative investment techniques. Below are a few choices that we would suggest:

House Flipping

When you purchase a home that needs some work and is a touch run down, your other choice is to flip the house. This is challenging, though, particularly within your budget. You will require a mortgage or bridging loan and must make sure you can rapidly and affordably renovate the home.

Always maintain a cushion since flipping a house is challenging. And staying inside your budget is tough because unexpected expenses frequently arise. Planning is the key to this, and the property needs to be flawless if you want to guarantee that you finish up with a substantial profit.

Rent-to-Rent Businesses

Another choice is rent to rent, which is leasing a home once from a landlord and then renting it out to other tenants separately to make money. This is typically done with HMO-style properties.

High Yield BTL

To be able to pay off the mortgage and still have extra money to spare, you’ll need to choose a neighbourhood with affordable housing and obtain a repayment-based mortgage. A property priced between £60 and £80k would be excellent. If your yield is high, you might be able to save enough money or make annual overpayments to enable you to buy another property for a comparable price in a few years and repeat the process.

It’s a reliable, low-risk long-term investment plan that should result in you having several mortgage-free properties over time that you can either use for cash flow or sell for a profit.

HMO Property (Room Rental)

An ideal choice is a BTL on an HMO property (House of Multiple Occupation). By utilising your money as a deposit for a BTL repayment mortgage, you can stretch your budget a little further. The concept is that you rent out individual rooms, which will enhance your earnings from the house compared to if you were to rent it out to a single tenant. This is why you may spend a little bit more on an HMO home because you should ideally get a lot more back on the rental.

Is Investing in Real Estate With £20,000 Practical

The Best Budget to Spend Your 20k in Real Estate

Now that we have a better sense of the type of investment you are looking to make, let’s discuss how you might be able to locate the ideal home within your price range, while sticking to how to invest 20k in real estate. To make the most of your money, you should think about the following:

Property Sourcing

The secret to discovering the ideal property that will satisfy your needs and generate revenue is to utilise a property sourcing business. They have access to a wide range of deals that are below market value.

Particularly when hunting for your first few houses and before you are sure what to look for. A property sourcing business can be quite helpful in locating a fantastic offer. They can assist you optimise your profit using their extensive property expertise. You may also return to them when you need to expand your portfolio. You can find a verified UK property sourcing entity here.

Going for the right location

This is crucial. It can be challenging and rare to discover a place with low property prices yet strong yields. Conventionally, it doesn’t matter where you live if you plan to be a landlord. However, if this is your first investment we would advise sticking as close to 100 miles as you can. It just usually makes things easier.

Look at the localities to see if they are a desirable place to reside in. Are they in the works for new designs and renovations? Other than yields, enquire whether the value of the house will rise when the time comes for you to sell.

If you flip, make more room.

Making more space is essential if you’ve opted to flip a house to maximise your profit. That refers to anything that will make the property appealing to a different group of purchasers and significantly raise the property’s overall worth. Such as building a sizable addition or converting a two-bedroom home into a three-bedroom one.

BMV realty

You need to put your £20,000 to a lot of use and stretch it far to start building up your capital quickly. To achieve this, you need to get off to a good start. Do so by purchasing a home that is substantially under market value. By doing this, you can increase your rental return and profit when you eventually decide to sell the property.

What comes next? 

The idea is to grow that £20,000 and create a consistent cash flow so you can achieve financial independence, right? So, what follows you knowing how to invest 20k in real estate?  After you’ve found the property and are beginning to make money, there are a few crucial things you need to do:

Expand your contacts and network.

Building a network, you know can support you in your endeavours is essential for success in the real estate industry. They may help you find bargains and chances for additional properties to add to your portfolio. Even for financing solutions to enhance your returns, contacts are crucial.

Create a reliable cash flow

Developing a regular, reliable, and good cash flow across a variety of assets is obviously the next step. By doing so, you may spread the risk and raise your earnings!


Can I buy a home in the UK for $20,000?

For a low-cost home, you’ll need to have between £5,000 and £10,000 saved up as a deposit. For a property costing the UK average, you’ll need between £10,000 and £20,000. If you’re purchasing in London or another area with high housing costs, you’ll need between £40,000 and £50,000.

Is British real estate profitable?

Buying real estate is always a wise and rewarding decision. Property stands out as a tempting option for long-term growth and financial security in the UK in 2023.

Are homes in the UK a wise investment?

Yes. This investment facilitates long-term wealth generation and accumulation. This can happen through individual investment property portfolios or as a component of one of the numerous institutional portfolios.

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