When developing SharePoint solutions, you normally use a virtual image locally or hosted on a Cloud service. If you wish to use outgoing emails you normally require an Exchange server. Instead, I am now installing relay to my live.com account hosted by Microsoft.
First, I activate the SMTP server feature on the server via Server Manager:

I then open the IIS 6.0 Manager, connect to the local SMTP server instance and configure the properties of the relay server.

Under Access select Relay and select the “All except the list below” option

From Delivery, click Outbound Security and enter your Live ID credentials and check the TLS encryption option.

Under Advanced set the smart host address to smtp.live.com.

Last, configure the outgoing email settings from the Central Administration site under System Settings/Outgoing Email Settings.

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