Move out, Rent out property then reno kitchen?

[DeanW]

Hi,

Currently I own a unit in Frankston which I live in. Since the day I purchased the property I have planned to rip out and replace the kitchen. I am planning to move next year and keep the property as a rental unit. What are people's ideas on waiting until I have moved out and have tenants in the property before moving ahead with the kitchen reno? I am not looking at spending a lot on the reno (approx $7k all up).

I was thinking that if I wait I could offer a week’s free rent for the tenant whilst the kitchen is done. Obviously the main reason I am looking at this is for the tax implications for myself.

Cheers,
Dean.

 

[Propertunity]

I was thinking that if I wait I could offer a week’s free rent for the tenant whilst the kitchen is done. Obviously the main reason I am looking at this is for the tax implications for myself.

Dean, I'd be doing it now or at least before you put tenants in.

You will not be able to claim it as a repair so you will depreciating it over time (for tax purposes). So there is no real advantage to wait until after tenanted.

 

[Buzz]

I agree you probably will Propertunity so it now. You will need more than a week to complete a kitchen reno - you will be alot more tolerant of eating out everynight and having workmen at your door at 6am every morning then a tenant - you will be able to rent it at a higher rent straight up rather than lease it for a year at a certain rent and not be able to put the rent up quickly to reflect the new kitchen.

You possibly will get better tenants with a new kitchen as well.
Hope this helps
Jane