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

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.

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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