It's very common for a client to purchase a rental property and renovate that property before it is rented out. You need to be aware that the IRD would most likely view those renovation costs as improvements and not tax deductible.
The IRD consider that costs incurred soon after purchasing a property as an improvement. This is on the basis that repair costs are only those costs that restore an asset to the condition it was in when you purchased it, not to its original condition.
So, if a property purchased is in need of immediate work, then that should have been reflected in the purchase price. Therefore, that work would form part of the acquisition costs of the asset and be treated as improvements.
The longer you can hold off on doing any work to a newly acquired rental property, the more likely that those costs will be treated as repairs.
Additionally, the more cosmetic the work (such as painting as opposed to a new bathroom), or the lower the cost of the work, the more likely that those costs will be treated as repairs.
Disclaimer: The above article is general in nature and we recommend you seek professional advice tailored to your specific personal situation.