Rennovate or rent?

Discussion in 'Introductions' started by Livo, 21st Feb, 2016.

Join Australia's most dynamic and respected property investment community
  1. Livo

    Livo New Member

    21st Feb, 2016
    Hi, was wanting a few tips regarding new purchase of existing house we will be renting out.
    It needs some TLC, but rather confused as to the tax benefits vs building value. We are wanting to do some rennos to bring a better rent and sale price in a year or two, but not sure if its worth it doing this or just renting out straight away and deal with issues as they happen. All comments welcome.
  2. Property Twins

    Property Twins Mortgage Brokers - Australia Wide Business Plus Member

    18th Jun, 2015
    Sydney, Australia
    Hi @Livo

    Welcome to PC.

    What sort of work are you looking to do? How much will it increase the rent by? Worthwhile checking for how much renovated properties are going for at the moment.

    In terms of tax benefits, any work done prior to earning rent will be claimable under the capital works rules 2.5% over 40 years. Check with your tax accountant.

    Tax benefits should be secondary, and focus should be whether there is an impact on the rental return or increase in end value.

    In terms of sales, check what other renovated properties are selling for vs yours - which will give you an idea on whether renovating will add value.

    I think consider if it is even worth renovating if there aren't immediate benefits in terms of rent or equity gains.

    Look forward to hearing what you decide.
    MTR likes this.