Ask Paul: I'm 26, should I buy another investment property?


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Q. I'm 26 years old with a great job. I have two properties (an apartment and a house) and $15,000 in exchange-traded funds (ETFs). I recently received an inheritance of $300,000, part of which I used to buy the house.

I have $50,000 in a growth superannuation account making great returns.

I've estimated repayments should I buy a third property and if interest rates rise another 4%, and I can meet repayments of principal and interest on the three properties within my current salary.

ask pual clitheroe should i buy another investment property

Should I purchase another investment property, keep the funds in my offset account and wait, or add to my share portfolio?

I would like to have children in the next several years but it's not on the immediate horizon. - Emma

A. Emma, call me old-fashioned but diversification is one of the fundamental laws when it comes to our money.

Despite the current really solid downturn in property values, with a strong economy and a growing population it is hard not to predict that over the long term property will do well.

But there are few guarantees in life, so if I was in your shoes I'd spread my risk by adding to my ETFs.

In particular I'd make sure I had exposure to international shares.

Our economy is heavily resource-based and very small in global terms.

Adding to super via salary sacrifice is always a great idea but at 26 it does lock away your money for many decades, so I suggest that your employer's contributions are enough here.

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Paul Clitheroe AM is founder and editorial adviser of Money magazine. He is one of Australia's leading financial voices, responsible for bringing financial insight to Australians through personal finance books, the Money TV show, and this publication, which he established in 1999. Paul is the chair of the Australian Government Financial Literacy Board and is chairman of InvestSMART Financial Services. He is the chair of Financial Literacy at Macquarie University where he is also a Professor with the School of Business and Economics. Click here to ask Paul your money question. Unfortunately Paul cannot respond to questions posted in the comments section. Please view our disclaimer here.
Epenesa Tuioti
February 8, 2019 2.17pm

Thanks Paul for the direction given but wonder if that suits my situation. I am 48 stayed home mum looking after 7 kids and my husband is the only income earner of around 60k. Also I want to ask if we can change banks to better rates as I noticed our unit is on principle & Interest (very high interest 5.06%)
instead of Interest only mortgage.The other property is 4.56%(fixed) but coming up due soon then go to P & I mortgage. Our PPR is less than 5k to pay it off with the interest rate of 4.21%.
Looking forward to your advice


Epenesa Tuioti
February 11, 2019 10.13am

Does it cost to reply to my question above?

February 11, 2019 10.39am

Hi Epenesa,

Paul doesn't monitor the comments section of our website.

Please email your question for consideration by Paul to [email protected] There is no cost involved.

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