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YEs you can do a reno to add capital to either sell or rent. Just make sure you always do your numbers ie: go through a reno with a fine tooth comb, write down each item that needs doing and then cost it.

In your costs you need to add your stamp duty, mortgage/settlement costs, holding costs (ie: payments on mortgage while renovating) and selling costs ie: cost of the agent to sell etc.

Once you’ve done that also add a couple of extra thousand for the things you find along the way that weren’t visibile or simply overlooked when you did your costings (there’s always something!)

Search the recent sales history of the area to find out what a similar homes that have been renovated are going for.

Once you’ve estimated what you should get then take off our costing that you’ve worked out. There’s your profit (or loss), and don’t forget you then need to pay capitla gains, take this off the profit. Are you happy wiht what you’d be left with? If so, go for it. If not start looking at the next one…..

Good Luck
PK

HI Royalty,

PK has covered a great deal of the important and relevent points.

To that list of ‘things to consider’ I would also add that you do need to factor into the ‘sums’ the loss of your income as you take time off work and also the cost of your labours. Once these numbers are put into perspective the potential for a ‘quick gain’ can be problematic.

You haven’t defined what your timeframe is but CGT on assets held for less than 12 months can be a killer. Whereas if the asset is held for more than 12 months it is reduced to 50%.

Given that you are contemplating time off work to do the renovation this may not be a mjor issue as your capital gains will be offset by a reduced income.

Derek
[email protected]

Property Investment Support Available.

I trust that your $70k is sitting in an account that has full offset to your home loan? (I wouldn’t rush in to dumping the $70k straight off your home loan just yet).

Why is it that you have 0% equity in your own home? Did you buy, and the market moved backwards that much? or perhaps you owe the usual 20% deposit plus closing costs to your parents? (and therefore you say that you have no equity in your own home)

Royalty, you may need to do a little tidying of your own back yard before embarking on your reno

[biggrin]

Royalty,

I apologise profusely but I only have one star….therefore my comments are probably not relevant.

Could I suggest (remember it’s only a one star suggestion) that you itemise your data into a readable format and clearly enunciate your specific question. Vagaries don’t hit the mark.

Without question that would have to be the longest and most confusing sentence I have ever perused.

Original question deleted – topic locked

Derek
[email protected]

Property Investment Support Available.