As I warned in the Introduction, some of the bigger ‘issues’ in this guide are a bit weightier than others. And learning the ropes when buying property is about as weighty and important as it gets – because what you buy, why you buy it, where you buy and how much you pay is absolutely pivotal to getting this business right.

Forget everything you’ve previously read or been told. This guide takes you back to the very beginning of the learning curve that’s part and parcel of knowing ‘enough’ not to fail. Investing wisely is a ‘mindset’ thing.

You need to pick over the bones of your thinking with a care and honesty you probably haven’t realised. Therefore, reading this lesson takes time. But it’s time well spent. In fact it’s absolutely essential time. Believe me, if the amount of time merely reading about the reality daunts you, remember that the lettings business is a long-term investment, it’s a big step involving big money over even bigger timescales.

So what you first have to realise is that anyone can be a landlord. It’s being a successful landlord that counts.

However, to unpick an industry this diverse means that some earlier lessons are inevitably weightier than others.

Knowing what to buy

Why does what I buy matter?

Because bad property choices just aren’t easy to fix.

Does it really matter that much?

Nothing is irredeemable, but ‘hard’ properties with inadequate ‘markets’ are the most difficult problems to ‘solve’.

It’s now virtually impossible to offer the ‘wrong’ type of lease or for tenants to outstay their welcome, but it remains horribly simple to buy the wrong building because you didn’t understand the market.

The climate that you invest in matters. A lot!

Despite all you’ve ever read before, snapping up any old unit with no idea of the local market conditions is a recipe for problems, long void periods, disruptive tenants, poor rent flow. Bananas won’t grow in Surrey, grapes might, apples will. Understanding local climates matters. Everything in this first lesson is either important, necessary, or absolutely vital.

Letting property is no get rich quick scheme – it’s a long-haul slog. Research and understanding of what’s right for you are paramount. It’s not your job to fill your agent’s window with yet another un-let property that he advised you to buy when wearing his estate agent’s hat. It is your job to find the right match to your own unique circumstances for such a long-term purchase.

Why is buying the ‘right’ property so important?

Because paying vast sums of money for the wrong building is the most costly mistake you can make.

What’s the first step?

For most landlords (but by no means all), the first part of the process usually boils down to buying one or more properties, and that means making choices in what is a fantastically diverse market.

What kind of tenancies should I be considering?

Assured shortholds – no question about it. (For details of what they are, how they work and what few exceptions can’t be shortholds, read Lesson 5: Assured shorthold leases.)

Why does it matter what kind of tenancy I use?

Because, when using shorthold assured tenancies (ie those created by the 1988 Housing Acts), landlords are guaranteed under the law that their property will be returned at the end of a relatively short initial ‘fixed term’, therefore (a bit of hassle aside) that part of things simply cannot go too far wrong.

Can anything go wrong?

Indeed but all businesses have running ‘issues’ occasionally. That’s par for the course. What’s important is the structure of the business investment whether your business is tenants or timeshares.

Nothing that you do, or even that backfires a bit is anything like as troublesome as buying an inappropriate property nor as hard to correct.

Unfortunately, that knack of making a wise investment choice simply isn’t down to ‘luck’ or finding one of those mythical ‘snips’. Research takes time. With it, you can find the right match in tenant types or pocket size to suit any safe building.

A vital word on safety

Without exceptions or excuses, absolutely everything that a landlord lets to a tenant must be safe. And that means safe as defined by a variety of legislation (housing, health and safety, common and civil and now HMO (houses in multiple occupation) and deposit rules to name but a few – see appropriate lessons). Safe does not mean what your brother-in-law’s builder claims is ‘safe’. Safety needs to be built into every rental unit. Forget it at your peril.

Problem buildings

But be warned, rental research requires an absolute honesty that’s quite opposite to the qualities that so many of us use to survive other work environments. Something is wrong with rent levels, location, presentation or management style when buildings are repeatedly empty or attract problematic tenants. Learn to look on problems as questions needing solutions and find some.

What types of property should I consider?

Buying investment property requires you to consider a huge range of topics simultaneously. The tired old advice of ‘snapping up a two-bedroomed flat on the next development’ that so many novices have listened to, has led to a crisis of gluts and falling rents that should never have occurred had investors been encouraged to examine the whole, huge marketplace – to say nothing of overpriced new developments that can push both you and your lender straight into negative equity before you’ve even taken hold of the keys!

Before you buy brand new, check out selling prices for similar flats locally that are six to 12 months old. Forget the cars, two-year deals and free carpets. They’re peanuts on a cost base of £200,000. Many nearly new units are trading at around 30 per cent cheaper than new asking prices – but their rent level will usually be exactly the same.

Whatever the property, the questions remain the same

• Is the price of the unit viable?
• Is it suitable for borrowings?
• Is it affordable in your circumstances?
• Is it in a safe condition without massive expense?
• Is it likely to create an HMO (read Lesson 13 on HMOs dedicated to these potentially radical changes)?
• Are you looking for instant profit over costs, ie high yield?
• Or are you looking for long-term capital acquisition (overall return)?
• Are you prepared to cross-subsidise borrowing costs from other income? Or not?

But the most vital question to landlords is: will this unit attract a decade’s worth of customers?Because tenants, not buildings, pay rent.