We have just discussed Residential Property and Commercial Property, as well as UK and overseas investments, but within each of these are a number of different markets.

There are distinct benefits in buying properties to let in your local area: you probably have a clear idea of house prices and typical rental values, and you could manage the tenancies yourself to save the cost of an agent. If you live in the South East of England, however, you will find it difficult to achieve good rental yields. In theory this is compensated for by higher than average capital growth, but this is by no means guaranteed.

There is no substitute for knowing your area. If buying to let, you need to understand the local rental demand. Is there a large student population looking for bed-sits? If so, the rental yield can be more than 10% even if units are only let in term time, but there are many costly regulations for HMOs (Houses in Multiple Occupation), not all of which relate to safety.

The Housing Act 2004, which came into effect in April 2006, introduced local authority licensing of these types of property, with the authority having the freedom to charge unspecified and unregulated fees for granting such licences. At some time in the near future, this scheme is intended to apply to all privately-let properties, not just HMOs.

Studio apartments and one-bedroom flats are ideal for single people and often young couples as well, but two-bed houses and flats tend to be occupied by couples with a young child, whilst those with two or more children will typically look for three-bed accommodation.

Before investing, you would be well advised to discuss the local market with more than one Letting Agent, to determine what type of property is in demand and how much rent people are prepared to pay.

Although there are always exceptions, the rental market for four bedroom detached houses occupied by a “single family unit” is not usually very large, and rental yields will certainly be lower than with smaller, cheaper properties.

When choosing a Letting or Managing Agent, it is wise to appoint one who is a member of a professional body such as the Association of Residential Letting Agents (ARLA). To belong to such an organisation, an agent must satisfy a number of conditions designed to safeguard the landlord’s money and guarantee a professional level of service.

If you are purchasing property to let which is more than an hour’s drive from your home, it is probably unwise to try to manage the tenancies yourself.