Hi guys,
I have a IP worth $290k tenanted for $370 p/w and im after your opinions on weather you think i should renovate my IP ie put in a new kitchen to hopefully make it worth more to invest further down the track or should i keep the money in my offset account (i currently have just over 10K in there)?
And when do you think i should get the depreciaiton schedule done? should it be now or should i wait until the renovations have finisghed?
Thanks.
AC80, so many things to think about!
Regarding the renovation, a starting point might be to look around at properties for sale and rent in the local area, and work out what a renovation may be worth (both in terms of increases to rent and value). Look for similar properties that have renovated and see what they are selling for. You don’t want to overcapitalise, but it really depends on your local property market. Also look to see what renovated places rent for – and how much you might be able to increase the rent you charge (if at all).
With regards to tax depreciation schedules – speak to your accountant, but generally people do get them made before renovation to ascertain if there is asset value that can be written off as part of the works being done. You’d generally also get one made afterwards so that you can start depreciating your improvements. Ring your accountant and/or a good deprecation schedule service and ask them what they recommend. It also depends on the age of the property (pre 1985 or post) etc.
Best of luck!
PropertyBuyingGuide
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