How can landlords survive the credit crunch?

The National Landlords Association (NLA), representing 20,000 landlords, is offering important advice to landlords which should help them not only survive the credit crunch but even benefit in these leaner times.

With the first anniversary of the credit crunch upon us, many professional landlords are benefiting from increased demand for their rental properties and, in many areas, rising rents.

However, doom-mongering headlines about the housing market have understandably led to some landlords becoming increasingly concerned about their financial situation. In light of this, the NLA is offering advice to landlords on how to survive the economic downturn.

TOP TIPS FOR LANDLORDS

HOW TO RIDE OUT THE ECONOMIC STORM?

1. Research, research, research

Thoroughly research the rental market in your area to make sure you are charging the right level of rent and not pricing yourself out of the market. Even during periods of high demand, it's always better to charge slightly below market rent. It is also important to market your property effectively and remember that different tenants are looking for different things in a rental property. Students will be looking for different things to young families.

2. Make your mortgage work for you

If you are struggling with mortgage repayments, or your circumstances change, talk to your lender and try to arrange a new repayment plan. If you are coming to the end of a deal, search the market for a mortgage which best suits your needs. If you are a professional portfolio landlord and you don't find what you're looking for with the traditional buy-to-let lenders, it may be worth exploring commercial finance opportunities. Check out nlamortgages.co.uk for the latest deals.

3. Avoid the void!

It is amazing how many landlords experience rental voids because of a lack of forward planning. Marketing your property before the current tenants leave increases your chances of keeping the property fully tenanted. A sure fire way of having no gaps is trying to keep good tenants for as long as possible.

4. Pick your tenants with care

Carrying out proper checks on prospective tenants should be par for the course for every landlord. Don't hand over the keys before carrying out credit checks, bankruptcy searches and previous residency information.

5. Together you're better

Landlords and tenants both benefit from having a good relationship. Courtesy, reliability and availability will make for a happier tenancy all round. What starts off as a small problem can turn into something costly if it's left to fester. Communication is critical.

6. The Golden Rules

The list of rules and regulations with which landlords must comply is long and growing. The risk to reputation and bank balance of not complying is significant. Last year, landlords began having to protect their tenants' deposits. This year sees the introduction of having to provide energy performance certificates for most rental properties in England & Wales and from February in Scotland.

7. Get it protected

Taking a deposit is important. But changes to the law mean the cash now has to be protected in a Government-approved scheme. Mydeposits.co.uk is the only scheme specifically designed to enable individual landlords to hold deposits throughout tenancies. To make life easier when it comes to handing back the cash, it is a good idea to draw-up a clear and simple inventory. Both you and your tenants need to agree and then sign two copies. This should help to avoid disputes at the end of the tenancy.

8. Are you covered?

There are a number of things for which landlords need decent insurance. From injury to tenants and their guests, to avoiding the dreaded void periods as well as building cover and damage insurance too. Can you afford not to have the right policy?

9. Start a ‘rainy day fund'

Life as a landlord is rarely straight forward and any number of expensive emergencies can crop up without warning. Putting a bit of money aside each month will help take the sting out of the cost of a new boiler or windows. And if it doesn't rain it pours, so if you've got several properties, make sure you put aside even more for the inevitable.

10. Get decent advice

Whether you've been a landlord for years or if you're just thinking about taking the plunge, it's important to get the right advice. The market is always changing and it's worth listening to the view of an experienced landlord. By joining a landlord association, you gain access to plenty of useful information as well as a listening ear and sound advice when it's needed.

David Salusbury, Chairman, National Landlords Association, thinks this could be a good time for professional landlords. He said: "It's now 12 months since the ‘credit crunch' became a part of everyday conversation. Although in leaner times we all need to be a little more prudent, for professional landlords with an eye for a bargain, there could well be rich pickings.

"Rumours of massive increases in rent are probably being overplayed but there is certainly a hike in demand for decent and well-placed rental properties. This should be music to the ears of the portfolio landlord, but don't get caught out.

"Proper advice for landlords is critical. By following the NLA top tips, landlords could increase their chances of getting the most from their properties at a time when the wider economic outlook is not looking so good."