Letting out a property is a considerable undertaking. You could try furnishing it with cast-offs, sticking an ad in the local paper and waiting for the cash to roll in. But to stand any real chance of turning a profit, you need to approach the process with a much more professional attitude, and be prepared to spend both time and money before you make a penny.
A realistic look at finance is the very first step, according to Tim Brooks, director of Infoguides, a new company that provides property-related "e-books". Its first publication is The Practical Guide to Buy-to-Let. "We've condensed all the information available to make it accessible and interactive," he explains.
The Infoguides Buy-to-Let package, which costs £25, is delivered by e-mail and consists of the book itself, a checklist, a directory of 5,000 further property contacts and, perhaps most useful of all, the Buy-to-Let calculator. This is the most important tool - it will tell you whether or not your letting plan is going to make you money. Enter all the financial information you can muster, including factors like interest rates, tax thresholds and legal fees, plus costs such as furnishing the property or using a property management service, and the calculator will then work out how much you'll have to spend - and how much you can expect to make.
"We update the calculator for existing customers without charge," says Brooks. "For instance, when stamp duty changed, we could send out the new version straight away - that's the beauty of the internet."
Although the guide is simple enough for a novice landlord, Brooks also has accountants and estate agents among his customers. Gary Salisbury, head of the City office of London estate agent Ludlow Thompson, says many landlords started as "landlords of necessity" due to negative equity and debt during the recession. "As rents went up, they realised they could achieve capital growth and yield. At one time, you were looking at yields of nine to 12 per cent; now in London, you're looking at five to seven per cent."
Likely tenants are young professionals who don't yet want to take on a mortgage, people working on short-term contracts or students. "Many tenants don't have a car, so they don't need a garage or parking, but they will need proximity to a good station and a major shop," notes Salisbury.
Making your property attractive when renting is as important as when you're selling. According to Brooks, the more mod cons the better. Many people will expect a dishwasher and tumble drier. "The quality of the bathroom and the kitchen is key. Good-quality white goods are standard. Keep everything neutral, clean and modern. Don't inflict your personal taste on the property. Make sure everything is immaculately clean,with new decor. It doesn't cost much to repaint."
When it comes to furniture, says Gary Salisbury, think contemporary: Habitat, Ikea, Heal's. "Buy furniture that will last and won't fall apart in the second half of the tenancy."
You're also obliged to make sure that the property is safe. By law, a landlord must have gas appliances inspected every year by a qualified engineer and an inspection must be carried out before the property is let for the first time. British Gas Property Care is a new service for landlords; £17 a month covers all gas safety issues and central heating, and for £29 electricity and plumbing can be added. Tenants contact British Gas direct if there's a problem.
One way to avoid hassle as a landlord is to use a management service; an agent will charge you around 10 per cent of the rent. It's about weighing up time versus money, says Brooks. Formerly an account director in the City, he is also a landlord himself, and speaks with feeling of the time a tenant's boiler conked out at eight in the morning on a Sunday when he was due to leave on holiday.
A formal contract between landlord and tenant is essential. Brooks recommends consulting a solicitor, particularly if you want to customise the standard tenancy form, for example to exclude pets or smokers.
Gary Salisbury adds that a bona fide letting agent, who will be a member of the Association of Residential Letting Agents, will be more than competent to tie up the legal side.
Tim Brooks is planning several new e-book titles; next in the pipeline is a guide to Spanish property. He says that he enjoys being a landlord. "You worry at first that the place will be wrecked or the tenants won't pay, but I've had a very good experience, far less stressful than I thought it might be. I'd definitely recommend it as a source of long-term savings, and a way to close the pensions gap."
British Gas: 0845 300 0303
The Practical Guide to Buy-to-Let: Infoguides Ltd, 01293 888158, www.let-a-property.info
Ludlow Thompson: 0845 450 7599, www.ludlowthompson.com
I'll take one of everything, please
If you are starting out as a landlord, Peter Jones department store in Sloane Square now has a one-stop shop that plans to take the headache out of equipping a home for tenants.
The Moving In service can furnish and equip a home in 10 days - supplying everything from the carpets and curtains to an entire batterie de cuisine. The store provides an inventory box - all you have to do is tick the box and the store's Moving In team pack everything up and dispatch it direct to the empty house or flat. If you need help choosing, you'll get a free two-hour consultation with the furnishing advice service. Get a free Lettings Pack from Peter Jones on 020-7730 3434 or e-mail: furnishingadvice_peter_ firstname.lastname@example.org
When 'how much?' is too much
We have become so obsessed with checking out house prices that some of us are pretending to move just to get our properties valued. The Woolwich says one in 10 of those people wanting their properties valued has "phantom movers syndrome" - they have no intention of selling. They are probably the same people who came up later in the same research as dinner party bores on the subject of house prices; only religion and personal finance were seen as more unpopular topics of conversation.
30-something mortgage virgins
The average age of a first-time buyer in Scotland is now 35 internet bank Egg tells us. That's the highest in the UK, yet it could rise to 40 if the trends of the last decade are repeated. At this rate our first purchase of a home could be a retirement bungalow. With first-time buyer figures at an all-time low (just over a quarter of new mortgage loans in November went to first-timers), no wonder the Nationwide recently referred to them as 'an endangered species'.
Buy now while stocks last
Workers heading for London and the South-east from the new EU member countries after their entry in May could set off another buy-to-let boom. Hometrack, the independent property company, reckons that 100,000 extra jobseekers will arrive, almost all needing properties to rent - and most looking in southern England. The countries set to join are Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia. The Association of Residential Lettings Agents is warning landlords, especially novice investors, to take care when vetting potential tenants. "Some countries have a less sophisticated approach to credit referencing" is the association's carefully couched observation.
Education, education, education
Good schools are the local service that almost two-thirds of 30-something homebuyers look for first, the Alliance & Leicester says. Moving to the right school's catchment area is the key factor for homebuyers in almost all regions in Britain, with only those in Yorkshire and the North choosing proximity to a supermarket instead.