The economy isn’t the only thing running at two speeds at the moment. Residential property seems to be in the same position.

While property values are softening around the country, rents continue to rise.

Bad for sellers but good for buyers and investors.

Rental returns from investment properties have been attractive for some time and continue to stay that way.

But owning an investment property also means being a landlord. And therein lies the problem.

While the property itself may be ideal, the person who rents it will determine whether it is an investment dream or nightmare.

If the tenant pays rent on time and looks after the property, your investment will most likely do very nicely.

But if this absolute stranger who takes possession of your $400,000 investment continually misses rent payments or trashes the place, then welcome to your worst nightmare.

The secret is finding the perfect tenants, and then keeping them for as long as possible.

So, how do you become a landlord without the tears?

1) Understand your rights as a landlord.

This is the scary bit. However, if you do it before buying an investment property, it can be a good test of your resolve to see whether being a landlord is for you. If not, then property investments can be made through managed property funds such as listed property trusts or property syndicates.

Make yourself familiar with the appropriate Landlord and Tenant Act in your State, fully understand your rights and obligations as well as the tenants'.

2) Rent at the right time for the best price.

Like anything else there is a good time to rent and an even better time. The difference can mean an extra 10 per cent on the rent which will mount up over the life of the investment.

Peak renting time is late spring and early summer.

This is the time when uni leavers are most likely to cut their cord with mum and dad to venture out "flatting" and when most interstate business transfers occur.

In the depths of winter there is usually a shortage of renters and therefore rents can be lower to make the property more attractive.

It also depends on supply and demand.

3) Choose your tenant carefully.

This is crunch time. Thoroughly checking the background of tenants and ensuring all parties act responsibly is crucial.

Your screening process should be formalised with the right application form which outlines the renter's history as a wage earner, tenant and bill payer. It must have an area where references can be nominated and you must follow up these references. The best references to look at are from employers, bank managers and previous landlords.

Landlords can't discriminate between tenants on the basis of sex or if they have children.

The biggest pitfall for any landlord is the problem tenant whose rent gets into arrears.

Get the tenant to sign a property condition report that shows you both agreed on the condition of the unit when the tenant moves in. It should include notes on things like cracked ceilings, torn flyscreens and stained carpets, and list what is in the property, e.g. chairs, fridge, cups, towels, light fittings and curtains.

If the tenant leaves before the end of the agreed tenancy, the tenant may be liable for rent until new tenants are found.

Always have your tenancy agreement in writing. Most people are fairly honest, but anyone can forget details about what was agreed.

4) Hire a good handyman.

If you don't hire a good handyman, you will more than likely kiss your free time goodbye. If something goes wrong at a property, many tenants will simply fix it themselves.

But other tenants will be less cooperative. If you are a real handyman and enjoy pottering around, then you may be able to do all this yourself. If not, then organise an outside handyman to do the odd jobs but make sure their prices are competitive.

There are all sorts of horror stories of landlords being slugged $50 to change a light globe by a maintenance person, so make sure you find someone reasonable.

5) Don't scrimp on repairs.

The look and condition of a rental property is a big factor in determining what rent can be charged, so it is imperative your property is kept in good nick.

Remember that maintenance expenses can be offset against rental income for tax purposes. If the bathroom needs fixing, do it right away as it will pay off in the long run.

Don't forget insurance cover to protect you from the unexpected.

Many investors buy home units or townhouses because the maintenance of the common areas is the responsibility of the corporate body.

6) Find a good property manager.

As you can see, being a landlord isn’t a simple matter. If you have the time, the application and follow the first five rules you should be okay. If it all sounds too daunting and complicated, let a good local real estate agent manage it for you for a monthly percentage of the rent.