Financial Planning - investment/primary residence/upgrades

[Pixel Rogue]

Hello everyone,

We are considering purchasing a neighbors home. The home is deep need of renovation, where our own home has been fully updated. The idea would be to rent out our own home, move into the neighbor's home and upgrade over time. Purpose of the new purchase would be as an investment...rent it out when ready.

The sticking point is an accounting question. Are there ways to upgrade the new purchase while living in the home and expense the upgrades in a similar manner as one would do if the unit were rented out to other individuals? We doubt we would find renters who would be up for renting the unit while upgrades are happening. Renovations might take a few years. I imagine we are not the first to encounter the question and curious what methods people have used in these situations.

Let me know if this is better suited for a different category.