Getting income from flatmates is a simple house-hacking strategy Connor Rensford used to get himself over the hurdle of mortgage application criteria as a first-home buyer.
He was willing to sacrifice a bit of privacy and share his home so he could achieve the dream of owning his own place.
Connor bought his first home in Milldale in North Auckland when he was 25. In the two years since then, he’s shared his place with flatmates to make ends meet.
“A written document from my first flatmates saying what they would pay got me across the line for my mortgage application and allowed for an extra $80,000 in my pre-approval,” Connor says. “I probably wouldn’t have achieved the funding without that letter.
“I’m striving to get ahead and the reality is having flatmates relieves the financial stress. I provide two bedrooms and a bathroom for them in my four-bedroom place and we share the kitchen. It would be a luxury for me and my partner Keagan to have our house to ourselves,” says Connor, who is a quantity surveyor for Generation Homes.
Many new homes are designed with house-hacking in mind and combine extra privacy for homeowners to share spaces but live separately from their flatmates, he says.
CONNOR
At the time when I purchased, to get something similar to what I was paying, I think existing and new were roughly the same amount of money. So that’s why it was a no brainer for me to build because I ended up with a better product. The existing homes I was trying to compete for were single-glazed, whereas my house was double glazed and warm and I knew it was constructed well. Plus, I get to customise it the way I want it, which is obviously an added bonus.
I also think a new build is better than an existing home because there’s no maintenance and you have new appliances. You obviously get to choose all your fit-out. I guess my interior colours are quite masculine – dark and gray with greenery spread out.
My goal is to eventually buy a lifestyle block, so with buying new potentially the resale is going to be a lot easier and effective to achieve my goal. I know it’s a good stepping stone to get where I want to be.
The main thing when you’re looking is just not putting all your eggs in one basket. I feel like I sat dormant for a long time, not knowing I was capable of doing what I’ve achieved until I actually reached out and asked questions. So I recommend to people to get out there and ask questions about building a home, and even if the first answer is no, at least you know what you need to do to fill that gap.
Building code changes since I built include that your joinery has to be thermally broken and you have to have multiple layers of insulation in the roof to meet a certain standard. So there has been some cost added. But the best thing about buying new is you can go in with a budget and you can cater it to make that budget. In my case, it would have been very hard for me to buy an existing house with four bedrooms at that price point.
Building new, I could effectively adjust my house plan choice to make the budget work. It’s really hard to say if buying new is cheaper or more expensive than existing. It really depends on what you’re looking for. With a new home you know exactly what you are buying and that’s an advantage, like knowing the cladding and other materials.
When you are looking for a first home it’s important to explore all your options. I think people get fixated on an idea of buying a doer-upper and then doing things to it. But at the end of the day, you’ve ended up at the same point where you would have done with a new build. My advice is to think about where you want to be in the future and don’t focus too particularly on the current time. Is it your goal to live in that house forever? My house now is a stepping stone to my lifestyle block dream.
CONNOR
I customised a two-story house plan for myself. I found my section first. It was one of the smallest sections and that two-story plan did allow me to maximise that effectively. I put the biggest house possible on that section to make the most out of it. I actually deleted the upstairs living area from the original plan to accommodate another bedroom to allow an extra flatmate.
CONNOR
I chose Milldale because it is an up-and-coming area. Since I’ve moved in the number of homes that have been built here is crazy. I bought in that subdivision so I could maximise my investment pretty much. And I feel like it’s worked.
CONNOR
I’ve been working for Generation Homes since December 2019. So, I was fully aware of what we were capable of with our fixed price and fixed handover date. Our track record is 100%. So, for me, I didn’t really see the need to go elsewhere. Obviously, working for the company I had lot more insight into the whole process. I had complete trust in what we do.
Basically, I got a pre-approval for up to a certain amount of money. The main thing, as well as being on a fixed budget, was the fixed timeline. It meant that I knew exactly when I was drawing down money from the bank. And then I also knew when I could get into the house. But I guess the main thing was the fixed price and the fact it covered everything. There were no surprises.
CONNOR
The schedule was great. As those milestones were hit, the house reality was coming into effect. I didn’t have any delays, even approaching up to the final day. I knew when I had to start organising, getting furniture and stuff like that. It was all streamlined, even for my flatmates. It made things easy. Right at the start of the job, I sent my bank a full list of all my progress payment dates and they were met.
I built at the same time as a friend of mine nearby, in a subdivision over the hill. He put his foundations in and started before me, but I was in my house before him. And his house was single-story and smaller than mine, so that’s great proof of the Generation Home process.
CONNOR
It was great – exciting and fun. I enjoyed everything, from choosing all the colours and working with people. I would definitely build again. The quality is great. I know our homes are built to show home standard every time. We do handover on time, every time. People are skeptical to hear that. But we do – honestly, truthfully.
CONNOR
The fact that it’s got polished concrete floor. I love that. That’s a core feature of mine. I wanted a large living space. It’s open plan and there’s no walls. I really like that, too. As I’ve got flatmates to help me to pay my mortgage, another good feature of the home is the way that my space is separated from the rest of the house. There’s privacy for my partner Keagan and I, and also for our flatmates.
CONNOR
You don’t have to do everything at once would be my budget tip. The structure is the only thing I would focus on. Any cosmetic stuff can be done after the fact. You can add in your own little bits here and there on the property as you can afford it. So, think about what you need rather than what you want.
For example, at the back of my property I didn’t do any landscaping, because I wasn’t sure what I wanted the space to be like. And since then, I’ve built a raised veggie garden. The fun part about being a homeowner is you can make changes to your house and no one can tell you not to. You might want to live in the space first and then you realise there is something else you want to do. The journey doesn’t have to stop when you get the keys. You can keep adding things.
Now I’m in the home I realise I could have spent an extra few hundred dollars here and there and it would have made this house a little bit better. For example, I wish I rebated (hid) the big joinery slider in the slab so to give it a seamless feel from inside to outside without a little step. Also I wish I had adjusted a window size or maybe added a small skylight above the kitchen to let in more natural light! But when I was making the decisions I was constrained by my budget.
One thing I learned about using your KiwiSaver is they actually keep $1,000 in there. So even if your account is $20,000, you can take out $19,000. I didn’t know that. Also, I’d recommend diversifying your mortgage terms. I’ve split my mortgage over four terms so I re-fix them at different times to minimise the risk of a massive increase in repayments.
