With the prices falling, the key lies in picking your market carefully

Posted under General by Alan

The correction was long overdue and had to come in the property market, but it should not hurt those landlords who have done their due diligence and are there in the market for the long term. There are still a lot of winners in buy to let. Analysts point out that it is not a great time for a novice to enter the market, but experienced landlords are still buying. According to a recent research by the Association of Residential Letting Agents almost 46 per cent of landlords intend to buy more property in the next year or so, while only 18 per cent plan to sell some.

The key is to pick your market carefully. For example, in cities like Manchester and Leeds, rampant development has led to a massive glut of apartments, forcing many landlords to cut down rents in order to attract tenants.

Also, ensure rental cover is at least about 125 per cent of mortgage payments, and make sure that you have enough equity – say about 25 to 30 per cent – to permit you to exit quickly if you are needed to. Maintaining a good credit profile is very vital. Lenders now meticulously check the credit profile of someone they lend to. Keep in mind the fact that even a missed credit card payment could go against you if you are remortgaging.

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