Ask Paul: Should I buy property in a regional area?
I'm a 53-year-old living in Brisbane. I have a $120,000 mortgage with my 56-year-old partner on a house worth about $1 million. I have minimal other debts apart from a mortgage, and max out annual super contributions.
I inherited a townhouse worth about $350,000. My self-funded retiree parents helped with house renovations to the tune of $750,000.I share joint bills with my financially challenged partner, but we have otherwise separate finances.
I have saved about $130,000 in my emergency fund. I don't wish to pay out the mortgage as I see it as a joint bill with my partner. My tax agent doesn't think I should get into shares (at my age?).
Should I research small regional towns where property would be cheap and buy an investment property? I would look for places that might be going ahead with rents/industry.
What else could I do with $130,000 that's getting no interest? - Kirsten
I had to laugh at your comment about your "financially challenged partner", Kirsten. Rarely in a relationship does a couple have similar skills or interest in money.
Pretty obviously, money differences are a very common cause of relationship stress, and it sounds like you have come to a solution that works for you both.
Also chuckled at your tax agent's comment that you are "too old" to own shares at 53. That is just ridiculous. Heavens knows what he or she would think about me owning shares at age 67.
It seems the agent is happy with property, which is a complex and "high management" investment. I love my shares, they leave me in peace, send me nice, fully franked dividends, are super easy to buy and sell and grow in value over time.
If property is your thing, buying a regional place is fine with me. You are maxing your super, which is ideal, and your super fund will own shares for you.
So as a long-term strategy, I think property is just fine. Alternatively, a low-cost share fund such as one run by a manager like Vanguard or BlackRock would work, or an exchange traded fund or a listed share fund could also be a nice, simple way to increase your diversification.
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