to renovate or to sell or do nothing?

Sorry for the long post!
This is a hard one to explain I guess because I am so confused about what to do! That's why I need help from experts here!

Our PPOR is a semi located in Mascot a couple of blocks from the train station. We purchased 5 years ago and have a bit of equity in it given prices have gone crazy since.

Our plan was to renovate to transform into a 4 bed house to suit our growing family and then use the equity to buy a couple of IPs.
However over the past couple of years there have been a lot of talk about high rise buildings (probably 8-10 lvl) coming up at the back... So we will probably move from here eventually if the buildings do go ahead as it would impact badly on our backyard privacy, Nothing is firm yet and it may not even happen for another 2-3 years. But we have had couple of developers interested in also buying the houses for development but nothing really happened yet and might never happen anyway...

So we have kind of decided that we will eventually be moving elsewhere but we are very reluctant to sell now as this house is a pretty good investment given he location.But the house is small now for our growing family so we need to make a decision move or renovate!

To move we can't really afford another house right now without selling this one. So to keep the house and then move we have a few options:

Option number 1 - We could take 200K out of this house now and keep it on the offset account for about a year before we would be able to buy another house to live in. So this would become an IP then - would there be any tax implication on the $200k that we took out a year before the new purchase?
If we put the house for rent as is we will just cover the mortgage - But if we do at least a basic reno adding a bed and bath it would become positive cashflow.

Option number 2. Take 200K out now, use to renovate to a nice house that will suit our family in the next 2-3 years. Buy more IP with the equity -
Then once the buildings come up either we sell (probably for a good profit) or put up for rent - the problem would be that we would have quite a bit of equity in the house given the reno. But it would positive cashflow if we put up for rent then, probably double the mortgage repayments.

Option number 3 - Do a very basic reno maybe 70K to 100k max (we need new kitchen/ open up living area and add at least one bedroom and bathroom)
And keep the rest of the money for a future deposit on the new house. Then as option use the equity to buy at least 1 IP and in 2 in 2-3 years either sell or put up for rent.

Its also important to remember that a developer could knock on the door again in 1-2 years wanting to buy the houses....or not!
And the last question, would the property depreciate due to the high rising buildings at the back on gardeners rd? The house is very well located close to public transport/ trains/ buses and a new Wollies is coming up next year in front of the station.

Any advise will be greatly appreciated as you can see we are very confused.

Thanks
Malu
 
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Option 4: talk to a few neighbours & see if you can a few houses in a row to up for sale at the same time. Might make it more attractive for developers if some of the hard work is done.
 
Option 4: talk to a few neighbours & see if you can a few houses in a row to up for sale at the same time. Might make it more attractive for developers if some of the hard work is done.

Yes it should be a good option but there is mixed feelings between the owners and not all of them are interested in selling...And the main problem is that the owners of the semi attached to ours definitely don't want to sell....
 
"Option number 1 - We could take 200K out of this house now and keep it on the offset account for about a year before we would be able to buy another house to live in. So this would become an IP then - would there be any tax implication on the $200k that we took out a year before the new purchase?"

The tax side of the $200k depends entirely on what you do with it. If you spent it on renos to your PPOR they won't be dedcutible of course until the PPOR turns into an IP.

If you use the $200k as a deposit for a new PPOR, it won't be deductible at all.

Whatever you plan to do with the 200k, you want to be sure you get the loan set up right, as there can be massive tax implications if it's done wrong.
 
More Options

Rent what you need right now and rent out the property for 2-3 years. Neighbours may change their minds once construction starts.
 
Just rent a place and get yours rented out. Don't sell a house in Mascot. You'll regret it in future and will lose a lot of money. Just live hassle free by renting a bigger place further away from the city
 
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