Renovating current ppor with intention to rent out later on

[Cath]

Hi, probably a silly question and may be in the wrong forum but anyway..

I am planning on using ppor as an investment property in approx 3-5 years. I was wanting to upgrade kitchen/laundry and front garden needs a massive overhaul to be even classed as ok. I am guestimating 30-35k of rennovations. Would this be of any benefit later on down the track other than increasing rental yield (hopefully got the term right, very new to this).

Reason I am asking is I am wondering wether we should just put up with the things that need doing until we are ready to move out in order to use the money otherwise spent on renovations to invest in another ip and then take out a loan once we have moved out to fund the renovations?

The things I am thinking about is the potential to make more money on cash in the meantime and then be able to have a loan that the interest would be tax deductable - is that even right?

I have read on this forum about a depreciation schedule, would that somehow make the rennovations now be justifiable down the track?

I have no idea if I am even on the right track so any feedback is welcome.

 

[farmilor]

Hi Cath

Not sure if you are on the right track or not as it depends mostly on what tyou want. We are doing a similar thing at the moment with our PPOR, except our renovations sound more extensive than yours

We are doing this because we want to live in a nicer house than the one we bought, and we kind of enjoy it

You need to decide on what kind of house you want to live in for the next 3-5 (or longer) years.

As for the depreciation schedule, keep receipts etc. for everything you do to the place now, and get your schedule done when you turn it into an IP.

Hope this helps you out a bit .....