Renting out a house or flat can secure both a regular income and capital growth for a lucky landlord. But unexpected costs, unruly tenants and unoccupied properties can be a major drain on a landlord’s resources.

So, is being a landlord worth the headache?

Yes

Richard Lambert, CEO at the National Landlords Association (NLA), says:

A well-managed buy-to let investment is an attractive option as it offers a competitive return on investment and a supplementary income. Whether you are working or in retirement, it has the potential for capital appreciation and of course is an asset for future generations.

Landlords can typically expect a rental yield of around 6 per cent on their buy-to-let investment, but this is entirely dependent upon the local climate in which the landlord operates and their particular investment strategy. However, this still provides a healthy and competitive return when compared to other forms of saving.

The number of private renters has more than doubled in the past ten years and looks like it will keep on growing. The demand is definitely there from tenants, and will continue to be while house prices rise and it remains difficult to get a mortgage. That means it’s unlikely you’d experience any issues when it comes to letting your property, as long as you’ve done your market research.

Nevertheless, the knowledge and skills needed to be a landlord are considerable and it is important for anyone considering a move into the buy-to-let market to be well aware of the law and their responsibilities to tenants. In the end, you are setting up a business providing someone else with a home, and they have a right to expect a service provided to a professional standard in return for their money.

No

Sophie Carter, UK director at CityR, says:

The average residential rent across England and Wales is now £747 per month, 1.4 per cent higher than June in 2013. This may not seem like much when held up against the 2 per cent inflation rate, but when house price growth of almost 12 per cent is factored in, the benefits of buy-to-let are hard to ignore. However, those looking to get in on the gold rush should be aware that buy-to-let doesn’t come without its fair share of headaches.

The most serious money sink is being faced with an empty property, which can cost thousands of pounds a year in maintenance, utilities charges, lost rent, council tax bills and reduced value if the build fabric is deteriorating. For example, the owner of a two-bedroom flat in London would lose an average of £1,600 every month the property lies unoccupied.

There are also the often overlooked costs associated with the management of tenants while in residence. This starts with tenant checks and estate agent fees before they even move in, and once settled, the management of repairs, maintenance and upkeep can become a never-ending saga.

Hiring a property management company can be a good way of avoiding these headaches, but they can become a handful in their own right. Service charges can eat into the returns you expect to see from your investment, and if they’re deferring a lot of decisions to you as the landlord, you may not be getting good value from the service.

However there are a number of alternatives for the budding entrepreneurial landlords amongst us. A rental model based around multi-family complexes can ensure that rent continues to flow in despite a unit being between tenants, so there’s no need for an empty property to keep you up at night. According to the US Department of Housing and Urban Development , estimates around 61 per cent of tenants in the USA are already living in these multi-family properties, proving that the opportunities to invest in them are all around. Of course buying these larger properties can seem out of reach for many, but by combining your individual buying power with others, it’s possible to invest far beyond your original price limit.

These crowd investment models are gaining in popularity, and by banishing the headaches from the property management side too, this interest shows no signs of abating.