When the tenancy is up for renewal you may save on Agency costs by letting the tenancy run on a periodic, as a Letting Agent and investor landlord I always feel it better to have fixed contracts were you are certain of a further term and less costs that trying to fiond new tenants with only a months notice.

Hi Suzanne, It seems that rents are being squeezed as a result of the dramatic capital growth recently. I thought that I could raise the rent in our Margate 2 bed after almost a year at a fairly good rent. However, when I looked at what rents are being acheived, they are no more than what they were a year ago but we have had about 8% CG. I ran the rental on periodoc after the AST expired last October. I told the tenants in December that there would be a very small rent increase in April. However, I am now writing to tell them that we no longer plan to increase their rent at the present and I have presented them with another AST which I am sure they will be happy to sign to maintain their current rent for at least another 6 months. You are right, play safe and keep the property occupied!

I never increase rents for existing tenants. I've got some students who have gone through a 4 year course with no increase. My view is that the rent freeze pays for itself in reducing voids and increasing goodwill. Generally I found the market rent for student accommodation has risen over the past 7 years but rents on 2 bed flats/houses for professionals has not. 7 years ago I could cover my mortgage costs twice over on each property. If I bought now at the same ltv I would be lucky to cover the interest once.

Hi Jonathan I wondered if you'd be prepared to share your thoughts and experiences on Margate. I'm currently looking at areas which will benefit from the new high speed rail link, this being one of them. Thanks Huw

Hi Huw, Margate has been tipped as a hot spot for capital growth. It has some pretty seedy areas but there is a strong rental marketand there is some regeneration going on (Turner Gallery). I stay clear of the flats as the growth is not so strong and prices are bullish but sea-view ones rent very well. You can still pick up 2 bed terraces in good nick / new refurbished for around £135 - £145K. and you'll get a yield of around 4.5 - 5.5% renting at around £550 - £575 for a really good one. The rail link promises to push prices up I made about 8.5% capital growth in the last 12 months, but just about the whole of the UK did that. Look around the QEQM hospital as you'll have a steady tenant pool if it's within walking distance. I'm looking in Ramsgate right now and I'm kicking myself because I procrastinated for a day on a great deal £15K underpriced that would have made 5% yield with a built in profit. You've got to move fast. Trouble is getting the low down before other investors. Most of the time, if the property goes to print it's almost too late. Good ones go in hours. In Ramsgate avoid the Newington area, it'll be difficult to rent ex LA props unless you're in to DHSS lets. Goo luck. PS Where have you invested? Jonathan

Fixing rents for existing tenants is good policy to a degree as a one month void blows a years rent increase. However, if you have a tenant who stays for say 10 years, your yield will go negative. What about when you remortgage at higher fixes?

10 years? One tenant for 10 years?? I wouldn't say no Jonathon! I haven't had a rental property for 10 years but I have had one for 7 going on 8. I let it for the first couple of years at £650/m. Since then rents varied between £550-£650. Currently I get £595. So I wouldn't have minded fixing at £650 for 10 years as things have worked out. Remortgaging? Well yes, the rental does put a ceiling on that but I dont think you really run the risk of falling that far behind the market by adopting a rent freeze policy. I dont guarrantee the rent freeze, by the way. But I do say to tenants that I wont put the rent up unless I absolutely have to.

It's really interesting how other people work. I admire you ethic (not that I don't have ethics - I certainly do). I believe that all tenants should be, comforatable, happy and safe - that's the motto. I would only buy a property that is pristine or one that I could make pristine by buying at the right price,(bright, clean and new), it rents faster that way anyway. However, I also feel that property must be geared as high as possible to roll a capital re-mortgaged profit onto the next one. Eventually in the right market (normally a market with slower capital growth - rents will go up (perhaps 2 - 4% pa) Jonathan

Jonathon I agree with your ethics which I think are good for business. However my approach is pragmatic rather than ethical is basis. Market rents in my area (North-West) are not going up. In the past 7 or 8 years they've been up and down but overall down. I have found it interesting to get rental assessments on the same properties over this time and see how it changes - both up and down. In my area a glut of new build flats has impacted quite significantly on rent levels. I'm confident that it will pick up again long term, as the new builds get absorbed, but we're not on the turn quite yet. The steady 2-4% rise that you hope for is certainly not a reality in my area. In the circumstances not troubling existing tenants with rent rises is just good business. To be honest I'm somewhat relieved that they haven't come back to me to negotiate discounts for staying on!!

Hi Nick, I know there is a plethora of appartments in the Manchester/Liverpool area that has impacted on rents. Quite honestly even here in the South East places like Southampton have the same problem. There is supposed to be a shortage of around 50,000 homes in the South-East alone which should keep rents strong but it is clear that rents haven't moved whilst property prices are flying. I have spent the afternoon loking for a suitable mortgage but with parameters of 1.3 rent to repayments, gearing to 85% is almost impossible. It is tough right now and buying cheap is the only way to get the figures to work but that's not easy given the hot sellers market. If you would like to exchange information you can get me on jonathan@bluewater-properties.co.uk If you know any good btl mortgage deals, please let me know. Best regards Jonathan