Upgrades to own home / future IP

Hansi on 06/07/2022 - 16:07
Last edited 06/07/2022 - 18:01

G'day Ozbargain,

Bought a house recently, which will become an investment property when I have to relocate in a few years (have to move around for jobs).

Based on your investment property experience, what upgrades / renovations provided the best ROI?

For example:
Putting solar on to reduce energy bill whilst I still live here, be able to charge a little bit higher rent and partially write it off once it is an IP (I live far North and having air con is a must during most of the year). Also one person in the household will be home most days, meaning solar power could be used during peak time

Upgrading appliances / floors / curtains (or does that make more sense once I rent it out to then fully deduct it as it'll be an IP?

Any input is appreciated!

Home & Garden

Comments

  • Mokr on 06/07/2022 - 16:15
    +1

    air conditoning/ heating, storage, 2 bathroom, ktichen (dishwasher)

  • MS Paint on 06/07/2022 - 16:27
    +7

    Aren't you better off (tax wise) making the improvements after it becomes an IP?

    • Hansi on 06/07/2022 - 17:56

      Yes then it would be 100% claimable. I wonder if I can upgrade now and let's say I stay for two more years depreciate the asset over time, less two years during which it was owner occupied. That way I get to enjoy the upgrade and also depreciate the upgrade over time (unsure if this is possible though)

    • Hansi on 06/07/2022 - 17:57

      Forgot to add - I won't be living near my current property, so can't make upgrade and repairs myself. If I upgrade things now I can DIY it, but will have to pay professionals when I song live close.

  • andresampras on 06/07/2022 - 16:30
    +2

    Option B: Rent the house out now, and start renting (ie. rentvest) a cheaper place now instead of in a few years' time.

    So all your upgrades are claimable.

    Profit!

  • Drakesy on 06/07/2022 - 16:32

    Definitely a dishwasher
    And PV panels you get an additional rebate if for an IP

    I'm a sucker for hardwood floors and would happily change them out if i could deduct it from my IP expenses

    • Hansi on 06/07/2022 - 17:57

      Already put in a nice brand dishwasher - works very well!

  • bdl on 06/07/2022 - 17:00
    +2

    Whatever you can enjoy now while you're living in it

    • Hansi on 06/07/2022 - 18:06

      Any idea if things can still be (partially) written off once I move out for the period it's an IP?

  • 87percent on 06/07/2022 - 17:08
    +1

    Are you not intending to have curtains before you intend to make it an IP?

    • Hansi on 06/07/2022 - 17:54

      I currently have vertical blinds, but they are so annoying and everywhere I've lived they break and come down all the time. . Thinking of replacing them with simple roller blinds which should be more reliable.

      • elgrande on 06/07/2022 - 18:01

        Roller blinds are just as much fun …

        • Hansi on 06/07/2022 - 18:06

          Do you know anything more sturdy that would be good / reliable?

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