» Click here for the original article

A quarter of buy-to-let landlords are just breaking even or worse at the moment – be one of those that make a profit by making sure you have the best possible buy-to-let mortgage.

The latest findings from research agency BDRC found that most landlords have seen their profit margins fall in the third quarter of 2009 and just over a quarter of landlords either break even or make a loss. Of those, 7% make a small loss and 1% "a large loss".

Interestingly, the survey also probed how frequently private landlords approach their tenants for rental increases – 21% saying they haven’t actually implemented a rental increase yet, whilst 50% increase the rent regularly at frequencies of between six months to two years. Looking over the last 12 months, 19% have decreased their rent, 27% have increased it and 49% have kept it static.

While making a rent change might make you a profit, it might be risky – demand too much and tenants will look elsewhere. The best way of making a profit is striking a balance between your rental income, your mortgage rate and your investment choices – there is more to making buy-to-let profits than just shaking your tenant down for money.

Mark Long, director at BDRC, says “With 2009 characterised as a year of survival for many landlords, we are starting to see signs of a brighter future into 2010. Despite the current profitability situation, as shown by these findings, prospects
for rental yields do appear to be improving in line with our landlords’ optimism index. The UK’s private landlords are a resilient bunch and will opt for a strategy that allows them to protect their income and portfolio.”

If you are not making enough, talk to your mortgage adviser right away. A new mortgage might make all the difference. Then again, you may have sensibly raised rents and now have extra income – again, your first port of call should be your mortgage adviser. They will help you put your money to work through clever savings, clever investment or even an expansion of your buy-to-let portfolio.

SOURCE: BDRC, 10/11/09

To keep up with the latest News and comment on the UK buy to let market visit the Buy to Let Mortgage Blog