Check a property's rental potential before you buy

Buying a property to let can be a good investment as long as you carry out lots of research beforehand. It is wise to secure rental assessments from several letting agents before you make any offers. Make sure you have three rental valuations and that one or more of these includes a specialist letting agent rather than an estate agent that may also make money from selling it to you.

Protect your property

Your property and portfolio will be one of your biggest assets. It's likely that your mortgage lender will have insisted you have buildings insurance, but you should also consider insuring the contents of your property such as appliances, carpets and protecting the fixtures and fittings against tenant damage. It is also wise to insure against tenants defaulting on payments, especially with the rise in unemployment during recession times.

Make sure you know and record all your costs

There are lots of costs you can deduct from your rental income that will help to reduce your tax bill. These include things like your mortgage; inventory fees; safety inspections and certificates; letting agent's fees and insurance costs. To keep track of these, it's worth considering using property management software so you record every cost you incur.

Ensure your property is let legally

Lettings legals are becoming a minefield, with new laws coming in over the last few years and more in the pipeline. It is essential you and your letting agent are up to date with the latest legal requirements. For example, you will need an Energy Performance Certificate to be able to market your property (for more info click here) and tenant deposits need to be protected in a Tenancy Deposit Protection Scheme (for more info click here).

You will also need to advise your mortgage lender that you are renting the property out and make sure all your safety certificates are up to date.

Keep your property well maintained

It's essential to make sure that you check the condition of your property on a six monthly basis from top to bottom. Things to check are whether the gutters and drains are working properly and there are no leaks. Make sure that any missing tiles are replaced and that your window and door locks are secure. Check the bathroom and kitchen sealants are still water tight.

Is your Tenancy Agreement up to date?

There have been lots of legal changes over the last few years that affect the landlord and tenant relationship, for example, the Tenancy Deposit Protection Scheme. It's important to update your Tenancy Agreement either via your letting agent; a landlord association or on/off-line letting legal services. Some on-line legal services will allow you to pay a set amount per year to download an up to date agreement when required.

Understand the Terms of Business you sign with a letting agent

This is a legal document which lays out your business relationship with the letting agent. It explains what you need to do and what they will do for you and at what cost. Ideally, the agreement should lay out all the letting agent's costs clearly on one page. If it doesn't, it's a good idea to ask for this in writing and check the agreement with an experienced lettings legal professional before you sign.

Minimise your tax bill by working with a property tax specialist

Whether you already have a portfolio or are about to purchase your first buy to let, or even let out a home you have lived in, it is essential to ensure you seek tax advice. There are many ways of legitimately reducing your tax bill, in some cases by tens of thousands of pounds. Make sure you record all the costs associated with the buy to let so you can file your tax returns easily and benefit from lower tax bills.

Ensure your inventory has photographs

With the introduction of Tenancy Deposit Protection (TDP), it is essential to have a good quality inventory as this document is increasingly used in deciding who wins TDP disputes. Photographs are great as they show exactly the condition of a property prior to the tenant moving in. Your letting agent may carry out an inventory on your behalf.Try to ensure you choose an inventory professional from the Association of Independent Inventory Clerks (AIIC) (For more info click here)

Carry out regular property checks

However great the tenants might seem, it's always wise to do regular checks on the property. If nothing else it helps you see anything that needs fixing, such as a leak. You are likely to have to give your tenants 48 hours notice of your visit and it's a good idea to carry out the checks every three to six months. You can do these yourself or ask your letting agent to do them for you.