For some, buying and letting property is a successful alternative to other forms of investment. There are many experienced landlords who are already familiar with the benefits of rental properties, the continual income stream they provide, and the steady rise in the value of their investment.

Over the last few years, investing in the property market has proved that property has given a better return than bank and building society investments. In fact, in the rental area, property gives a double return with income in the form of rent, plus capital growth. In some areas capital growth has been quite outstanding.

As with all things, it is not as easy or as straightforward as one would like to think. First, you must have the right property in the right area. Try speaking to a letting agent to discuss the demand for properties in the areas you are interested in, and they will also indicate the level of rent you could expect to achieve for the property and the area.

Next you will need a proper Letting Agreement, as letting without a properly drafted agreement is putting a valuable asset at risk. It is likely that a Letting Agreement will be an assured short-hold tenancy, and because of the protection it affords landlords, is by some distance the most common type of residential tenancy arrangement.

Assured shorthold

An assured shorthold tenancy will normally be for a fixed term. When the fixed term is over, the tenancy will automatically continue as a periodic tenancy, so there will be no need to enter into a new agreement. You can regain possession of your property at any time after the first six months of the tenancy, as long as you have given your tenant two months’ notice.

It is important that there is a comprehensive tenancy agreement. Don’t be tempted with getting an ‘off-the-shelf, do-it-yourself tenancy agreement’. Some may be free, but they do not necessarily give you the level of protection you need.

It really is worth investing in a fully comprehensive, solicitor prepared, assured shorthold tenancy agreement ,either by your solicitor or letting agent. A small investment, but a worthwhile exercise.

Your obligations as landlord are many and will include: adhering to safety requirements; collecting rent; attending to repairs on the property; not harassing the tenants. This can include visiting the property without prior notice, builders/tradesman arriving at the property without prior notice and generally leaving the property in a poor condition for the tenants.

To make the investment work, the property has to be well managed. This makes good business sense and minimises the landlord's risks, but if the management side is neglected you could have real problems.

Complex letting

Letting is a relatively complex area and requires a fair amount of knowledge. You could use agents to do your lettings, and indeed agents can be very useful to you. Agents can charge anything between 10 to 15 per cent and for this will take away the worry and the day-to-day problems involved with letting properties.

Against this, however, the payment of the fees is an expense and will eat into your income stream. Therefore, to maximise your earnings, you should learn to do it yourself.

However, this is easier said than done - property management can be intensive - finding tenants, chasing rent arrears, dealing with repairs. Some people would not want to be directly involved in this work while others will enjoy it.

Anyone who has acted as a landlord or been a tenant will have come across a tenancy deposit. A typical deposit is usually a month’s rent, and is held by the landlord against the tenant failing to pay rent or comply with any of their other tenancy obligations.

Since April this year ,a deposit must be paid in accordance with a government authorised scheme. This will be either under a ‘custodian scheme’ or under an insurance backed scheme.

The ‘custodian scheme’ is where the deposit is paid to an independent scheme administrator, and the deposit is held in a specific account. The administration of the scheme is paid for out of the interest that accrues on the deposit, so no other costs are involved.

Under an insurance-backed scheme, the landlord is able to keep the deposit but has to insure the deposit with an official recognised scheme. Both schemes must offer alternative dispute resolution. Once any dispute is resolved, an agreement, adjudication or court order is required for the deposit to be paid. Your solicitor or letting agent will advise you further regarding this.

Get proper advice and do your homework. There is no doubt that residential property has proved itself over the past years, so if you do venture on the buy to let route – protect your asset.