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Currently Living in IP, Want To Renovate - Best Method?

Discussion in 'Real Estate' started by tc123, 13th Apr, 2012.

  1. tc123

    tc123 Tom

    Joined:
    4th Nov, 2011
    Posts:
    40
    Location:
    Australia
    Hi all,

    I'd appreciate some comments on this, as I'm sure there are a few ways to do it.
    Currently, myself and the wife, are living in our first purchase - it's a 2 bedroom unit in the suburb of Mitcham VIC.
    We want to make some renovations to freshen the place up, and then move on to our next home - and hopefully keep this one as a rental.

    We estimate the total value of renovations to be in the order of $30k.

    Currently, we don't have this money on hand. However, we purchsed the property privately for what we think is about $50k under the market value.

    What would be the best approach to obtaining the money to do renovations?
    • Get house valued and use equity?
    • Borrow
    • Other..?

    A further question, if anyone has experience in renovations to a 2 bedroom house - is it worth knocking out a wall to open up the kitchen? Behind the wall is a toilet, which we would like to move into the bathroom.. and then redo the bathroom - tiling, vanity & shower.

    FYI other reno's include: painting all inside, new kitchen benchtop, paving the back yard, building a pergola, new carport, build a small landing/deck at the front entrance, and maybe a front fence.

    Cheers-
    Tom
     
  2. tc123

    tc123 Tom

    Joined:
    4th Nov, 2011
    Posts:
    40
    Location:
    Australia
    Or is there any benefit in buying the next property - hopefully a long term PPOR, and then converting this loan to an investment property loan and then conducting the renovations?
     
  3. Terryw

    Terryw Well-Known Member

    Joined:
    9th Jun, 2006
    Posts:
    653
    Location:
    Sydney
    This would depend on LVR and valuation and your borrowing capacity.

    When you change the use of the property you don't actually change the purpose of the loan - the interest just becomes deductible.