INVESTING in residential property has become a popular alternative or addition to pension provision and many have benefited in recent years from value rises.

However, it's important to go into a property investment properly advised and informed, because in general terms property is an illiquid asset which is expensive to buy and sell and which, in value terms, can go up or down like any other investment.

In addition, there are risks along the way to the income stream - for example, tenants can run into debt and sometimes disappear leaving the property in poor order.

On the positive side, a well-let residential property can give a return of around six per cent net of costs and over the long term can give good capital growth.

Neil Chatterton, of Caxtons, is in no doubt why residential property has become a popular investment. “People are fed up with failing pension plans and a volatile stock market. At least a property is always there and if investors buy carefully then in the long term they should do reasonable well.”

He does, however, add a word of caution: “It is being able to weather the storms that is a key point.”

So, apart from seeking professional help on a purchase, here is some general advice from Caxtons:

• Location is the most important point. Buy in a stable, trouble-free location, close to amenities and services.

• Keep possible repair bills to a minimum by preferably buying a modern property or a very well-maintained older property.

• Do not be too ambitious - Caxtons’ research shows that two bed/three-bed houses will give you the best return.

• Remember, there will be costs - management, maintenance, insurance. Factor these into finance planning.

• If you find good tenants treat them nicely and maintain the property properly.

• Do not assume management is easy and remember that being a landlord brings with it certain obligations.

For sound and sensible advice contact Caxtons Chartered Surveyors on 01474 537733 or www.caxtons.com