INVESTMENT: Investing in property is not just about bricks and mortar - it's also about becoming a landlord. There are legal responsibilities, ongoing costs and possibly hassles to deal with.

If you employ an estate agent, Threshold advises that you clarify the terms of your contract and the amount of commission payable. Also be clear about the extent of your agent's duties. You have to establish whether you wish the agent only to secure tenants for you or also to collect rent and manage the property.

Estate agents or letting agencies can act as middlemen, finding and vetting tenants. They will inspect the property, advise on the attainable rent, and advertise and arrange for prospective tenants to view the property. The agency will also get employer, bank and landlord references from the tenant.

Once everything is in order, the agency will arrange the standing order and inform utility companies about the transfer of accounts. They can also draw up a standard lease.

Charges for these services vary but landlords can expect to pay around 6.25 per cent of the annual rent plus VAT. Of course, the investor can do all this legwork but, if you are new to the market, using an agency takes the element of trial and error out of the process.

Ms Kathrina Cahill of Homelocators in Dublin describes the job as a matchmaking service.

"If you are using an agency make sure their vetting procedures are thorough, and they are a fully bonded and licensed company," she says.

The majority of new landlords are opting for a fixed-term tenancy, usually for six months or a year. As a landlord you are required by law to provide your tenant with a rent book or written letting agreement/lease and can be prosecuted for not doing so. All payments from the tenant must be recorded in the rent book or by written statement. In addition the rent book or letting agreement must contain information about the tenancy, specified by the Rent Book Regulations.

The information must include: the address of the rented dwelling; the name and address of the landlord and agent (if any); the name of the tenant; the term of the tenancy; the amount of rent, and when and how it is to be paid; details of other payments such as telephone and Cabelink; the amount and purpose of any deposit paid and conditions under which it will be returned to the tenant; a statement of information on basic rights and duties of landlords and tenants; and details of appliances and furnishings provided.

If you decide to use a management company to run the letting, you will have little or no contact with the tenant. Normally the tenant pays the rent directly to the management company. If the rent is in arrears, the company will follow up on it.

The company will also deal with all tenant queries and problems. Most provide emergency numbers for maintenance issues that arise outside business hours.

Mr Declan Carolan of New City Estates Management says the role of the management company is to make the investment as trouble-free as possible. Some 10 to 15 per cent of Mr Carolan's clients live overseas.

The standard charge for management services is 10 per cent plus VAT. The company remits the rent to the landlord on a monthly basis, net of its own charge and any other expenses.

The rental income can now be offset against the mortgage interest on the property. A list of other expenses may be claimed for, including: ground rent; rates payable by the landlord, such as water rates and refuse collection; maintenance; insurance; and repairs (i.e. decorating and general upkeep of the property).

Where rental property is furnished, a claim can be made for a wear-and-tear allowance based on the cost of the furniture and fittings. The allowance is 20 per cent per year over five years.

Pre-letting expenses are not allowable for tax-relief purposes. However, it is possible to claim for auctioneer's letting fees, advertising fees and legal expenses incurred on first lettings.

Profit on renting is taxed on an actual tax-year basis. For individuals taxed under the PAYE system with rental profits that are relatively small, it can be arranged to have the tax collected by reduction of their tax credits or standard rate cut-off point. Otherwise, the tax due is collected under the self-assessment system.