Is it worth investing in the London rentals market? This has been a "darling sector" for offshore investors in past years, mainly because of the overheated UK housing market.

This page contains some cool analysis of what many experts say is a typical "bubble" - a market that is overpriced and due for a mighty pop.

And yet, for brave-hearted souls with an eye for the fast buck, London retains its allure. Marc von Grundherr, director of lettings at Benham & Reeves Residential Lettings in the city, reckons "the prime central London lettings market looks set yet again to surpass returns from other investments, despite current economic uncertainties".

Von Grundherr says his company's central London offices received more tenant enquiries for the first half of 2003 than in the corresponding period last year.

"Although void periods between lettings are longer, together with a downward adjustment in rents, this is short-term. Compared with conventional investments, property is still the most stable," he says.

According to the Royal Institution of Chartered Surveyors and leading UK mortgage lender Nationwide, capital values are set to increase further.

Von Grundherr offers the following advice to SA-resident investors who are keen to become landlords in London:

Take a long-term view and do not be put off by the temporary fluctuations in the market.

Location, location, location is never truer than now. Do your research thoroughly, consulting long-established, reliable London-based letting agents who know the areas where corporate tenants want to live .

In today's competitive market, tenants expect the highest standards of appointment. If you're buying a two-bedroom flat, it should have two bathrooms for professional sharers who often choose this property type.

New developments have advantages because of their low maintenance, but be aware that a property may enter the rental market with up to 20 other units in the same building, so could take some time to rent.

Don't assume that the achievable rental that was given at the time of purchasing your investment will be the actual figure you will achieve when the property enters the market.

Always "invest in your investment" so your property stands out from the crowd. This ensures a speedy letting at the highest rental, and sometimes results in a premium lease.

Be realistic. Rents are lower than they have been and this should be reflected in the marketing. Continuous letting at a slightly lower level will give higher overall income than long voids.

Business Times