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When the going gets tough

When everything went wrong with his first renovation, Tushar Sharma dug deep … and it paid off in spades, writes Joanna Mathers.

By: Joanna Mathers

30 April 2023

‘The bathroom was like a horror movie set’

At this early stage he planned to bowl the house and build four separate dwellings on the property, which was in a great location in the heart of Wellington. Once again, he asked the mortgage broker if he could get finance. “He said that it would be fine; I asked him if I could go unconditional, and he said ‘yes’.”

So he purchased the property for $815,000, with a three-month settlement, in late February 2022, and an architect drew up plans.

But things didn’t work out as planned.


Unfortunately, the broker had been wrong about the finance. In the three months between signing and settlement, CCCFA changes had come into force. Gone were the days of easy money and Sharma’s “sure thing” was transformed into a big “no”.

“My mortgage broker told me that the development was not going to happen. It would have cost over $2 million. But then, he also wasn’t able to secure the money for even the cost of the house. It was incredibly stressful.”

Fortunately, Sharma was able to find another broker, who secured a loan through a second-tier lender, but with a much higher interest rate. “And I had to extend the settlement date by 14 days, which cost me some money, but allowed me to get a mortgage.”

But now he was stuck with an unlivable house and no funds for renovation. He had to think quickly.


Sharma had a contact who was a builder, and asked him to work out the cost of completely gutting the house and starting again. The quote came back at a staggering $250,000 – money he didn’t have. So he went to the bank.

“I was able to get half the money from a Westpac loan,” he says. He also had money left over from another mortgage (a new build duplex) that he could put towards the renovation.

“But I didn’t have all the money at once, so I had to explain to the builder what was happening and he worked at his own pace.”

Sharma had intended to do aspects of the project himself – such as painting – but his day job was full-on so he
outsourced all the work. It ended up costing him $280,000 all up.

Because the house was so awful he spared no expense in making it beautiful. “I was used to new builds and I think I went a bit over the top,” he says. The walls and floors needed to be removed and replaced and the kitchen and bathroom gutted and re-created. He also turned an outside shed into an extra bedroom.

The build took around five months. at the time there was no GIB to be found in New Zealand. “We ended up using plywood, which was three times the cost, but we had no other option.”


By the time the build was complete and ready for rent, it was January 2023, which was a quiet month in the city when no-one was looking for rentals. Shortly after, an enormous amount of rentals became available at once (Sharma says there were 46 of his type of property at one stage) and the competition was fierce. The location and size of the property lent itself to student accommodation, but it was possibly out of their price range.

“Students tend to not care what properties look like inside, and go for the most affordable place,” he says. “One group of overseas students were keen, but I wasn’t able to get any reference checks so I didn’t feel comfortable giving it to them.”

He was also determined to manage the property himself: “I wanted to save money.”

But he realises in hindsight this was a mistake. “I wouldn’t try to do this again – it’s best to let the professionals
do their job.”

It still is yet to be rented, but there is interest. And better still, the valuation on the property came back at $1.22 million, which leaves him with just over $100,000 equity after mortgage and renovation costs, so there is a definite silver lining to this renovation cloud.

Sharma isn’t embarrassed about sharing a story that’s different from the usual renovation successes, and he is
determined to hold onto the property. “If I sold it I would have to pay so much in taxes that I would be unlikely to make anything.”

The home has brought him “so much grief” but he admits the renovation itself was a success.

“It’s such a great place – I would live in it myself!”

And he’s hoping that the likely capital gains in the next few years are likely to override any of the stress he experienced during his great home transformation.


Territorial authorities have different regulations, but buildings are classed the same throughout the country.

Adding a new dwelling on an existing property always involves a consent of some type.

The complexity and cost depends on things like how big you want the new dwelling to be, if you’re looking to establish a new title for it (subdivide), and how it will be used.

Different territorial authorities have different rules, but buildings are classed the same throughout the country.

• Sleepouts can’t have food preparation facilities or a bathroom, and are generally classed as “accessory buildings” rather than dwellings. These are the simplest to consent and build. In some cases, no consent is needed.

• “Minor dwellings” include sleepouts with food preparation facilities and a bathroom, up to a size of 60 or 65m2. They must be built on a section with a primary dwelling. Exactly what is allowable will depend on the size of your site, existing building coverage and zoning. This is the most common.

• Subdividing is the process of dividing land into separate titles. You’ll be creating a new section (or dwelling), on its own title, allowing the new dwelling or section to be sold independently of the original home. There are various consents required for this activity, and it is usually the most complex project type.


Your ideal new dwelling type will depend on your objectives and needs, and the constraints of your property’s zoning. An initial chat with your local council will give you an idea of what’s possible on your site. Builderscrack.co.nz has planners, surveyors, architects and builders New Zealand-wide to help turn your dream into a reality


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