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I don't understand your logic. So: 1. You have loan for 140k, property worth $140k. rents 220pw. (ignoring purchase costs) 2. You spend $15k on reno, loan now $155k, rent $250pw. property worth $200k. Yield (rent compared to current market value) might be 6.5% - but you didn't pay $200k...

Surely the money you've drawn down on the refinance would be reported against the new IP purchase (for which it was used), not the old one (from which you've drawn it out of). So the old IP is still yielding 8%, and now you have a new IP yielding X%. And if you bought bought below market...