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Not really silly. I'm pretty sure I'll spend way more than prudent on the house we're planning to build for ourselves over the next year or so. Keep in mind though that this isn't the 'dream house'.

$30 per week isn't a very good return for a $25k renovation, but this can be very much dependent on the property. In many instances a coat of paint, some carpeting blinds and better lighting can achieve the same rental result for a lot less than $10k. Nothing wrong with your overall plan...