If you’re considering buying an investment property and don’t know much about the process, you probably have a few questions. We therefore asked the experts to provide the answers to the most frequently asked questions.

Why should I buy an investment property?

The answer to this question is simple, says Lloyd Edge, author of Buy Now: The Ultimate Guide to Owning and Investing in Property.

“It can give you financial security for the future,” he says. “Otherwise, you’re just relying on your paid job, your pension, and your retirement super, which might not be enough for the lifestyle you have in mind.”

But I heard that interest rates are about to go up. Isn’t it a bad time to buy?

“I disagree. Rising interest rates will mean markets should calm down and stabilize. This is a much better time to buy than last year or earlier in the year,” Edge said.

“Buyers should carefully consider their overall strategy and long-term goals, so interest rate hikes should not play into this too much, as well-prepared investors will have already factored in a contingency for this eventuality. .”

Where do I start?

Jon McGuinness, senior mobile relationship manager at Bendigo Bank Geelong, says you should start by finding out what you can afford. “Your bank will advise you on your borrowing capacity and your options,” he says.

A home loan calculator can give you an idea of ​​how much you can comfortably borrow, but if you talk to your lender you can get a more accurate determination.

It’s good to remember that if your lender gives you pre-approval for a loan, you can go out and make an offer on a property, confident that you have the financial backing to move quickly to secure it.

What costs should I take into account?

“There can be a lot of costs involved in buying a property,” says McGuinness.

When you review properties, you may have to pay for building and pest inspections, as well as strata reports. Then when you have purchased something, in addition to the purchase price, you may have to pay stamp duty, registration fees and legal fees.

Once you own an investment property you will have ongoing costs such as agent fees, mortgage repayments, landlord’s insurance, council rates and condominium/corporate fees (if the property is in an apartment complex). Everything must be taken into account.

What type of property should I buy and where?

House or unit? New or old? A property that promises a big capital gain or that offers a high rental yield? These are big questions that are not easy to answer. “It all depends on your strategy and goals,” says Edge.

As for where you should look, here’s where our experts differ. McGuinness recommends starting in your area or another area you know. “Use your local knowledge,” he says. “What and where you buy can also be influenced by your affordability.”

Edge, on the other hand, says, “There are usually better options across the country.”

Do research online to compare capital growth rates, demographics, vacancy rates, etc. from different regions can help you narrow your search.

What advice for getting started in real estate investing?

Before you begin, it’s important to identify your goals, Edge says, whether that’s retiring early, sending the kids to private school or taking a vacation abroad.

Investing periodically in stocks or managed funds may be a better option if the disposable income you can commit to investing is erratic.

“However, once you have a goal and have decided the property is for you, work backwards to see which properties and price ranges fit your strategy,” he adds.

McGuinness recommends setting up your pre-approval early, so you know exactly what your budget is and stay in touch with your lender throughout the buying process. He also says you should take your time.

“Do your research,” he advises. “You don’t have to go out and buy the first property you see, especially in a market where prices are falling.”

Bendigo Bank wants to help you plan and save to build a better future for you and your family. Get more information on bendigobank.com.au/familyhub

Note: This article contains general advice only. You should determine if the product is right for you and seek the advice of a trusted professional on financial matters. Please read the applicable Product Disclosure Statement(s) and Terms and Conditions on the Bendigo Bank website before making any investment decision.