Should I Renovate My Rental Before Making It My Primary?

[James Palassis]

My wife and I are about 3 years out from retirement. Both kids will be out of the house and we are looking to downsize. We have identified one of our rental properties to be our primary residence when we do this. We have several renovations planned (build 2-car garage, install solar, new kitchen and bathrooms). I'm looking to optimize our tax exposure. Would it be advantageous to perform these renovations while the unit is still a rental? Or does it even make a difference on whether renovations occur when it's a rental or when it is our primary residence?

We are anticipating the expense of these renovations to be in the neighborhood of $100-$125K.