Is it better or not to live in a house when you renovate

[Gatoblanco]

Is it better to live in a place when you renovate it?

Advantages:
No tenants to work around. Can paint whenever you want, turn power off etc.

Disadvantage:
Cannot tax deduct expenses - or are there ways around that?

Please share experience relating to this.
Thanks
Jesse

 

[Firsthomelooker]

For your own sanity - don't do it. We have DIY renovated our PPOR whilst living here. I would only renovate again if I was taking a few weeks off work and the house was empty so we could just get in and get it done. The biggest nightmare is constantly shifting furniture from room to room.

 

[scamp]

Yes, from a sanity point, if you can afford it, don't be in your PPOR. If you don't want to rent, then at least hire a campervan to stay in somewhere on a caravanpark. It's so nice to 'be away' from DIY where you can sleep , have warm water etc. Especially warm water is nice
But also being away from dust, have light ( electricity ) and toilet is a must really.
I like to be away from the DIY house, close but away from it.

 

[Gatoblanco]

Doing repairs around tenants

What about if a property is rented. How do renos get done then?
If the tenant is not there any more then you cant deduct the renos as repairs (those that would be classed as repairs).
However if there is a tenant it is hard to get the work done isnt it?

 

[BayView]

The renos are depreciated as capital improvements, the repairs are deducted as expenses. Check with your accountant as to which is what.

The tenants don't have to be there to claim all of the above; just as long as you have a PPoR nominated, the renovating property is classed as an investment if there is income to offset the renos/repairs in that financial year.

Again, consult the bean counter.

We lived in our PPoR for a year's worth of renos before we turned it into our B&B. It got a bit tiresome living in the dust, the drafts, the paint fumes etc after about 3 months.

The end was worth the pain though.

 

[RumpledElf]

Renovated two PPoRs while living in them, the comment about constant furniture rearranging is spot on. If possible, don't do it! Its very disruptive, and if you own a cat there's a chance you'll never see it again.

Quite looking forward to fixing up the empty IP, but since that house has a good bathroom and ours has a horrible one, when we do the bathroom here we'll stay in the other house for a bit. Very hard to use a bathroom when tiling, using floor levelling compound, toilet floor needs concreting etc etc. Rather not be there if I don't have to be.

 

[granev]

Renovated two PPoRs while living in them, the comment about constant furniture rearranging is spot on. If possible, don't do it! Its very disruptive, and if you own a cat there's a chance you'll never see it again.
Quite looking forward to fixing up the empty IP, but since that house has a good bathroom and ours has a horrible one, when we do the bathroom here we'll stay in the other house for a bit. Very hard to use a bathroom when tiling, using floor levelling compound, toilet floor needs concreting etc etc. Rather not be there if I don't have to be.

so its not all bad then

 

[LynnH]

Granev

That's just what I was thinking, too! (Must admit I prefer dogs!)

Cheers
LynnH

 

[Firsthomelooker]

Very hard to use a bathroom when tiling, using floor levelling compound, toilet floor needs concreting etc etc. Rather not be there if I don't have to be.

We have a bathroom reno planned for the future - thank god we have an ensuite!

 

[Gatoblanco]

Please explain

The tenants don't have to be there to claim all of the above; just as long as you have a PPoR nominated,

Please explain this with an example. Thanks.
Jesse

 

[RumpledElf]

Our cat is roof obsessed ... she's got into the roof in ways I never thought possible. Jumping 6 foot vertically from the scaffold, and one time jumping about 8 foot diagonally aiming for a 3 inch wide hole where the cornice was off, which she missed and fell 4m to the ground. Another time tried to dig her way through a particularly large crack at ceiling level where we'd knocked out a chunk of plaster ... funny sight, a cat hanging from a hole at ceiling height by one paw while digging with the other paw and trying to hang onto a sheer wall with her back feet. So whenever we lose the cat while renovating, we just wait about 8 hours until she gets thirsty, pokes her head out from a hole in the ceiling and demands water be brought up.

 

[Gravos]

We recently completed a renovation on PPOR that was supposed to take '6 months' and took 1year+ and we're still doing bits and pieces although the suffering is pretty much over. We at least had a functioning bathroom throughout which is essential IMHO, but had to cope without a kitchen for a while.

I think it depends on your circumstances. If you are single or young couple maybe you could manage ok. I'm married with 2 kids and it almost drove my wife round the bend (she was home much more than me with a fulltime job)

If you think you can manage dust everywhere, constant noise, wandering tradies, wafting cigarette smoke, boxes and stuff everywhere and general chaos for an indeterminate period (or if you have to due to $ reasons) then go for it - if not you might want to consider alternatives.

 

[BayView]

Please explain this with an example. Thanks.
Jesse

You are living in your PPoR, and have an IP.

The current tenants move out, and in between tenants you conduct your renos.

The rental income from the previous tenants and the next tenants does not have to be consecutive weeks, or without vacancies.

The ATO only looks at your total rent income and any expenses and capital works in any given financial year; not when you receive it during that financial year.

 

[Gatoblanco]

You are living in your PPoR, and have an IP.

The current tenants move out, and in between tenants you conduct your renos.

The rental income from the previous tenants and the next tenants does not have to be consecutive weeks, or without vacancies.

The ATO only looks at your total rent income and any expenses and capital works in any given financial year; not when you receive it during that financial year.

LA Aussie. So what if you have no nominated PPOR. I.e. you rent and are renovating an IP. Can you still make the deductions you describe? I would understand you couldnt make them on your PPOR but surely they could be made on an IP regardless of whether you have a PPOR?

The bit about the financial year timeframes makes sense. thanks for the info.

 

[BayView]

LA Aussie. So what if you have no nominated PPOR. I.e. you rent and are renovating an IP. Can you still make the deductions you describe? I would understand you couldnt make them on your PPOR but surely they could be made on an IP regardless of whether you have a PPOR?

The bit about the financial year timeframes makes sense. thanks for the info.

Yes, you can on the IP, but not on the PPoR.

You don't need to have a PPoR nominated, and you simply file your tax return with all the relevant costs/expenses/income stated for that financial year.

Your accountant will be able to collate all of theses factors for you.

 

[wylie]

We have a bathroom reno planned for the future - thank god we have an ensuite!

So.... when my hubby "helpfully" removed our only toilet on a Sunday (telling me, we would have a new one next weekend ) when I was eight months pregnant......

Luckily our neighbour had an outside loo and I was able to nip across the back yard several times a night. For anybody who has been pregnant, you will understand that sometimes I used her outdoor loo, and on they way back across our yard, realise I had to go again. In the end, I just went in our yard to save the trip back .

I have also lived through three PPOR renos and have made a promise that I will never do it again.