Investing for Monthly Income: 15 Investments in 2024 (2024)

Looking for the top investments that pay monthly income, UK or otherwise?

Perhaps one of the best investments for monthly income is residential rental property.

A must-have for any serious investment portfolio, residential rental property investment has exploded in popularity over the last year and is a top contender for those looking at investing for income. UK property, in particular, is a hot item – thanks to its massive growth in income potential.

With residential real estate, investors will buy a property and rent it out to a tenant. This means that residential real estate delivers two forms of income.

1. Rental income – A regular monthly income stream that reached a record-high in the UK rental market in 2023. The average rent hit £1,279 per month in November 2023, according to HomeLet.
2. Capital growth – Otherwise known as capital gains or capital appreciation, capital growth is the increase in a property’s value over time. UK property prices increased at their highest rate in 2021 since 2004, reaching an average of £250k for the first time ever.

This makes property an effective solution for those thinking ahead to retirement, as investors can earn regular rental income and secure a huge profit when they sell their assets later down the line.

While this asset class can deliver an effective monthly income stream, you need to know that there are ongoing costs with real estate, including property management fees and interest payments if you use a buy to let mortgage.

Overall, we estimate that you’ll likely need a minimum initial investment of around £30k, including; property taxes, a BTL mortgage initial deposit, and a down payment of 25% if you want to secure an effective residential property.

You can learn more about property investment by reading our ultimate guide for 2024. You can also see if now is a good time to invest in property by reading our brand-new property guide.

One of the riskier investments on this list but still incredibly popular amongst investors, London property, is an excellent asset to invest in to get monthly passive income due to its high rent levels.

However, while London is good for a high monthly income, there are other issues that have made it less attractive over the years.
Depending on the area, London property comes with a luxury price tag, and the region suffers from lower rental yields and stunted capital growth compared to other locations.

Finding the right location for a buy-to-let investment can be pretty tricky, and it isn’t as simple as investing in the area with the highest potential rental income.

You need to keep an eye on the projected capital growth and ensure that the area has a high average rental yield to secure a sustainable investment.

Likewise, you need to avoid investing in areas with low demand. Cheaper property is appealing on the surface, but if they can’t offer consistent rental income, they aren’t a good investment.

This is usually because there is little demand for an area, which could mean that there are long void periods, and your returns will be set to drop.

However, if you can find the right blend, rental income can be sizable enough to secure a regular monthly income, but you should be wary. Areas like London are historically known as safe investments, but the premium property prices and sluggish growth have made other areas, such as the North of England, more appealing.

Check out our guide to the London property market to learn more.

Another way of securing passive income by making an investment in real estate is through student rental property.

You can buy student rental property in the UK in two main ways.

1. You can buy purpose-built student accommodation: Likely the top choice in 2024, with Savills reporting that over £5.77 billion was spent on PBSA in 2020 – a record-high.
2. You can buy a house of multiple occupancy, otherwise known as HMOs: Historically a popular choice, with various tenants paying rent and increasing the income generated.

Like residential real estate, student property is a top passive income investment, allowing investors to earn both rent on a monthly basis and long-term capital appreciation.

Student property can potentially offer some of the best monthly income funds out of all real estate assets thanks to high rental income and low property prices, typically below £100k – In fact, our student property, City Point, was available for purchase from only £59,995 and offered 8% NET rental yields.

While the minimum investment for student property is less, it also offers less capital appreciation potential than residential property, which is something to keep in mind for investors looking at retirement.

You will also need to pay additional fees, such as property management fees, when buying a purpose-built student apartment.

Overall, if you’re a buy-to-let investor looking for dependable income and want to invest money in real estate, student property is a top choice. You can learn more by reading our complete guide to student property investment in 2024.

As a way of investing in property with a lower initial budget, goo can be a smart choice for beginner investors in 2024.

Off-plan is a way of investing in a new build that is still in the planning or construction stage. Due to this, it can be bought for a below-market price, with the option of using a payment plan.

Once completed, the units are often managed by a professional management company that will take care of the landlord’s duties, generating passive income for their investors.

By investing in off-plan property, investors can kick-start their property portfolio far cheaper than expected, with the potential to earn two forms of income.

They are:

1. Investors can earn monthly rental income from tenants.
2. Investors can get returns from capital growth when the investor sells a property that has increased in price over time.

With plenty of exciting off-plan projects to choose from, such as the previously mentioned student accommodation, eco-properties, short-let apartments, luxury accommodation and more, investors have plenty of choices to determine what option is right for them.

As off-plan properties offer so much choice for investors, it’s undoubtedly a top choice for the best monthly income investments.

Manhattan apartments can be an interesting solution for those looking for safe investments and wanting to know how to invest for monthly income.

A Manhattan apartment is a mix between studio apartments and one-bedroom flats.

Sometimes confused with a studio flat, Manhattan apartments are a studio with a secluded bedroom. As it is smaller, investors will then receive rental income, which is lower, based on the apartment’s size.

As a way to generate monthly income, Manhattan apartments can be a top choice as they are more affordable and less of an initial budget is needed to start investing.

However, opting for a Manhattan apartment could risk gaining less rental income than other property investments. Manhattan apartments are smaller than other properties, meaning you’ll be earning less than you usually would on an apartment.

But while rental income can fall behind other property investments, Manhattan apartments are more affordable, will pay a regular payment, and are very in demand if you want to re-sell.

Another real estate option on this list, commercial rental property, is another investment offering consistent income every month.

Investors can buy a unit in a commercial building, like an office block, retail space, or industrial space, and rent the premises to companies or businesses.

The main benefit of commercial real estate over other rental properties is longer lease lengths. You’ll have access to tenants for longer and can consistently see returns without running the risk of void periods.

However, these investments can get tricky, making it far more challenging to find business tenants. Likewise, if you’re looking to finance your deal, buy-to-let mortgages are also harder to find and can often incur higher deposits and interest payments. We have a handy Buy to let mortgage calculator available.

As such, while this can be a good choice for a real estate investor, it may not be the best way to invest for monthly income.

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A top choice if you want to buy real estate you can live in, holiday homes allow investors to rent out a house on a short-term basis to a holiday goer or tourist.

Typically listed on websites like Airbnb, those owning a holiday home, whether based in the UK or abroad, can live in their holiday home while travelling and rent it out when not in use.

However, if you wish to do this, remember that living in a home purchased with a buy-to-let mortgage won’t be possible. Likewise, if you buy it with a residential mortgage, you won’t be able to let out the property.

Investors can produce monthly income from a holiday home, which could be considerable depending on its size and quality. However, securing a BTL mortgage can be tricky, and you could encounter extensive void periods if the area’s tourism is based on seasonal demand.