Ask Paul: Should I buy property in a regional area?

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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?). 

ask paul clitheroe should i buy property in a regional area

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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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.
Comments
Marthese Xuereb Baiada
July 20, 2022 6.26pm

Hi Paul, you say buying shares is easy but I have no clue where to buy them. If it's through a share broker how do I find a one I can trust?

Kate S
July 21, 2022 12.16pm

Hi Marthese,

Have a look at what your bank offers, my bank has a portal I can use to purchase shares and see all my finances in one place, I believe that most banks offer a similar type of thing.

Money magazine
Verified
July 21, 2022 1.00pm

Hi Marthese,

That's a great question! Here are some stories we've done about buying shares for the first time:

https://www.moneymag.com.au/st...

https://www.moneymag.com.au/ri...

And this is a recent podcast we recorded on starting out in shares:

https://www.moneymag.com.au/fr...

If you would like more information, please feel free to submit a question to Paul here: https://www.moneymag.com.au/co...

Good luck!

- Money team

Liam Flynn
July 21, 2022 12.55pm

Hi Marthese,

I'm not a financial advisor. But. You could have a look at Stockspot. It's a Robo Advisor, run by real people. Basically you answer a simple questionaire for risk/ time assessment and they do the rest. The fees are low and the idea is to set it and forget it. But you need to look at at least a 7 year time frame. If you want to know more, give them a call. That's where I have parked some money for the next 8 to 10 years.

Money magazine
Verified
July 21, 2022 1.40pm

*EDITOR'S NOTE*

Paul Clitheroe is unable to respond to questions posted here in the comments. Please submit your question via this link: https://www.moneymag.com.au/co...