Tax Deductibility

Hi everyone,
Long time reader with a first time post here! Hope someone can help.

I am one of those who is in a fortunate, but unfortunate position in that I had paid off my PPOR (let's call it property 1) and now rent it out while my new PPOR (property 2) has a mortgage. Both properties are in need of renovating, which I have the funds to do but I am thinking that if I were to borrow the funds to renovate property 1, all the interest would be deductible and would offset the rent I receive. The property would still be rented while the reno is taking place. Is this a good way of doing this or would it not really save me in the long run?

Thanks in advance.
Welcome, Freena! You are correct that interest in the funds for property 1 would be deductible. This would mean you could use your $ for other things, like offsetting your PPOR mortgage.
How big a renovation are you planning? I'm surprised that you could retain tenants in the property while this is going on.
Hi Freena

If you still have large PPOR debt, look at the option of a PPOR spousal sale or the sale of the PPOR to a unit trust to re gear it in a way that yout tax adviser may approve