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More than seven out of ten buy-to-let landlords are making a profit out of their investment, according to a survey by CHL Mortgages.

The survey found that for 71% of landlords, the rental money they gain from their buy-to-let properties is sufficient to cover the mortgage payments, management and maintenance fees. Fifteen percent say it is only enough to cover the mortgage and just 6.1% of landlords said their rental income was insufficient to cover their outgoings.

The most important thing to make sure of when taking out a buy-to-let mortgage is that it is geared so as to be affordable through the rental income you will receive. A good buy-to-let mortgage adviser will be able to help you find that right deal.

Of course, no mortgage can prevent periods where you don't have rental income, but the right buy-to-let insurance can. While 55% of landlords told CHL that they had not experienced any rental voids in the last 12 months, 28% have had to deal with a rental void in the last six months, and 17% in the last year – but only 12% of respondents said they were using insurance to protect against voids and rent arrears. If you don't have rental income you are out of pocket, so making sure you have cover means you are making sure you don't lose money in the future.

Of those who responded to the survey, the majority are positive about the future for buy-to-let with many suggesting the sector has now shed its former get-rich quick image and is once again a market of professional landlords.

Bob Young, managing director at CHL Mortgages, says: “Buy-to-let has gone back to its roots and is now a sector dominated again by professional landlords rather than the type of borrower we saw in the ‘boom years’ which were motivated by short-term ambitions as they attempted to make money quickly from property.

“It is heartening to see that most landlords are positive about the future and a significant number are looking to purchase more investment properties in the near future. This shows a growing demand for buy-to-let mortgages and we believe will translate into increased lending in the next 12 months, but in this current economic environment we are somewhat surprised to see the relatively low numbers using rental insurance."

SOURCE: CHL, 07/01/10

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