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Home and income housing. A solution for families and investors

30 October 2020

Commuter delays caused by the temporary closure of lanes on the Auckland Harbour Bridge, and the work-from-home culture that has grown out of covid-19 restrictions, have added impetus to an emerging trend in the Auckland housing market for new builds to be designed as ‘home-and-income’ properties.

* See examples of the Auckland North Team's range of plans below.

Auckland North Managing Director for Generation Homes Peter Suckling, says ‘home-and-income’ builds are a practical “future-proof” solution for families, retirees and investors.

“I’ve been watching this trend for a while now,” Peter says. “It was emerging before the Covid crisis hit, but now it’s really picking up as a financially rewarding option for people looking to purchase a new build in Auckland’s subdivisions.”

The beauty of home-and-income homes, Peter says, is that the cost of the build is not a lot more than a single home over the same square area, but the inclusion of an income space means owners can generate a financial return straight away.

“For landlords, new build rental properties in Auckland were typically run at a loss, relying on capital gains to get a return on their investment. With today’s low interest rates and the potential to generate two rents from one home-and-income build site, investors can receive a positive yield from day one.”

So, just what is a home-and-income build?

“It is not just renting out a room in your existing house,” Peter says. “A home-and-income property provides two consented dwellings on one parent Title. The secondary dwelling can either be attached or separate from the main dwelling and is subject to specific compliance requirements.

Both dwellings can be legally tenanted, typically as rental accommodation and, in some cases, for business purposes (subject to Local Authority consent) providing additional income for the property owner.

“Either way it will have its own entrance, facilities, one or two bedrooms, kitchen, lounge and so on. It will have its own metred services (power, water, gas). In building parlance, the two parts of the home are referred to as the main and minor dwellings.”

In Auckland, Peter says, the minor dwelling of a home-and-income build is restricted to 65 square metres, although a garage for the independent unit, if provided, is additional to that. Generation Homes’ designs for new home-and-income houses comply with building permit and insurance requirements, an important consideration that can be problematic if people simply convert a part of an existing home.

Peter says home-and income builds are attracting interest from a wide range of buyers, from investors to baby boomers and retirees, and people who want to operate a business from home without it impinging on their privacy. With current interest rates, the home-and-income designs can bring in a better income than traditional term deposits, and provide greater security.  People are using them to bring in rental accommodation or office space income, as a granny flat, Air BNB, a small home-based business and so on.

“Clients choosing to live in a home-and-income house also enjoy the flexibility they provide,” Peter says. “They can choose whether to rent both units out, or live in either the major or minor dwelling and rent the other. As their lifestyle changes, or they have different needs, they can change things around, such as moving from the main dwelling to the minor, having children or other family stay, and so on.

Riverhead resident Alexa Bartlett is a big fan.

“We built a home and minor dwelling with Generation Homes four years ago, it is one of the most rewarding decisions that my partner and I have ever made. Initially we wanted to guarantee retirement earnings to complement our lifestyle, but also ensure that should our circumstances change, or our family's needs change, we have the ability to accommodate these.

“During the Covid-19 lockdown it has been reassuring having an ideal tenant for company, security and assistance with shopping, without compromising each other’s privacy.”

Alexa says their home was designed with a minor lounge and a small office nook, which serves as a place from which to run her business as a marriage and funeral celebrant.

“I often joke with my friends that one day we might all be living in this ‘Marigold Hotel’, with the ability to house 10 of us – which would be considerably cheaper than a nursing home – and employ our own staff!”

 - Read Alexa's story on her build, just click here

Peter cautions that there are different local authority planning regulations around home-and-income builds, especially if it is intended that a business operate out of the minor unit, so potential owners should check with their builder and local authority before committing to this option.

“At Generation Homes Auckland we’ve gained a lot of experience in home-and-income builds during the last five years and are happy to pass on what we have learned to our customers considering this option.

“We believe that the Covid-crisis, and even the traffic delays on the harbour bridge at the moment, have simply highlighted and accelerated the home-and-income building trend,” Peter concluded. “It really is a great solution for the city’s growth, allowing more people to live in the same space but without the high density that comes with apartment or terrace home complexes.”

To find out more about building a Home and Income property in Auckland North, talk to our friendly sales team today - find their information here.


PLEASE NOTE: The RED line denotes the separation between the two home and income part of the building.

CORNWALL PLAN: Overall 283m² / Home area 168m² / Income area 99m²

WINDSOR PLAN: Overall 294m² / Home area 235m² / Income area 59m²

BUCKINGHAM PLAN: Overall 351m² / Home area 272m² / Income area 79m²

BALMORAL PLAN: Overall 275m² / Home area 193m² / Income area 82m²

Take a video tour of our Balmoral Plan: