When to renovate

[zimby]

Howdy

We've currently Living In one of our Units but plan to move out shortly.
Its a 3 bed 2 bath in Taringa Brisbane.
We have a rather large Sun Room that we want to convert into a 4th Bedroom.
We got a few quotes ranging from 3k to 12k, the best we feel being around the 8K mark.
This includes electrical,paint,carpet the works.
So a few questions.
We'd like to get the property on the market in Jan/Feb however this might be tight to organize a reno before then( we'll make sure work completes when we are out of the property, for tax reasons)
Should we try for this, or should we:
a) Organize during the lease
b) During a change of Tenant

We expect the extra room to get around 20-30 extra per week, but hard to guesstimate as not an abundance of 4 bed 2 bath's in Taringa.
Oh and has anyone used Mason Constructions QLD?

 

[travelbug]

When you say you are doing it after you move out for tax reasons I assume you are buying another PPOR.


If you are you will no longer get the CGT excemption on this property. So if you do the reno after any capital gain realised will be added to your CG and yopu will pay tax on it when you sell.
If the reno will add a substantial amount to your CG then it may be better to get the gain before you change over. Get a valuation after the eno to minimize you CGT.

Also if you do the reno straight away what/how are you claiming? The wear and tear was from when you lived there.

Trying to do a reno during a lease is not advisable.
You need to work out whether it is worthwhile doing the reno before or after tenancy. Just work out the cost and the interest on this VS how much extra rent you'll get. Unless the in pocket gain is more then it may not be worth doing straight away. Also consider the capital gain if you want to draw out equity.

 

[marg4000]

It's an improvement, therefore not tax deductible whether you do it now or after you move out. You will be able to depreciate it under the building depreciation. Therefore, when you do it is immaterial.

To do work like that during a lease will have to be written into the lease before the tenancy. I would imagine most tenants would not like it, so would affect appeal to tenants and therefore rental income.

Either start as soon as possible so it is ready when you move out, or you will be best to wait until between tenancies.
Marg

 

[zimby]

Awesome thanks, Sorry "Tax reasons" was rather general.
We're moving out to rent and not purchase a PPOR, so CGT not an issue now.
Best to do it before.

Cheers