Money Magazine

ASK PAUL

With three properties already, Rohan needs to … Diversify for some peace of mind

QI am a single income earner, aged 36, and am on $120,000pa with some perks such as a company house and matched share options in the mining industry. I am currently on the highest level of share purchase at $570 a month and salary sacrifice about 2.5% pre-tax into super with matched contributions.

Currently I have three investment properties:

1. Value $580,000, owing $350,000 on an interest-only loan; 2. Value $380,000, owing $265,000 on a principal and interest (P&I) loan;

3. Value $373,00, owing $217,000 on a P&I loan. 

Recently I had an issue with one of the properties that was not covered by insurance, and after the repairs and lost rent, it reduced my savings to almost nothing.

Currently I save $3000 a month and am building my offset account back up to my desired level of three months’ income to start. Overall the properties covered themselves with a small profit before the recent setback.

My question is, do I just reduce my exposure and have a good savings bank for any future setbacks? Or should I start to diversify with shares outside the mining industry by adding some exchange traded funds or similar? With the recent pandemic I feel quite exposed and for peace of mind would like to move towards a position that is comfortable in times like these.

Well, one thing is for sure Rohan. Please, do not buy any more properties. This

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