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The Raj Family: 3 Properties

Four years ago, IT professionals Sanjay and Aiswarya Raj got married in India, and then Aiswarya moved to Hamilton to live with her husband.

14 October 2021

Unfortunately, it wasn’t quite the comfortable lifestyle Aiswarya had been used to having, because Sanjay’s finances were in a total mess.

While he was a student, he’d run up debts for study, a car, computers, and money to send to his family in India. He was NZ$35,000 in the red, paying up to 20 per cent interest, and his credit rating was so poor the couple couldn’t get an account with a power company.

They were living on pre-paid electricity in a damp, rundown rental, shopping for food only once a month at a discount outlet.

Despairing, Aiswarya called her brother, who reminded her that she had always been great at saving money. Get a job, save up, and buy a house, he said.

She found a job as a data warehouse developer. The couple saved her entire income, and not long after, the debt had been cleared.

They studied ways to buy a house though reading books and watching YouTube videos. But Sanjay’s credit score didn’t change as rapidly as their finances – they were turned down nine times before they finally found a bank that would give them a home loan.

From debt to dwellings

In mid-2015 they bought a townhouse, picking it up for NZ$50,000 under its capital value. They rented out the spare room, and let out their own bedroom on Airbnb, sleeping in the living room when it was in use. These incomings cover their mortgage completely each month.

Three months later, they bought and rented out an apartment in Rotorua, then a townhouse in Hawera. Then they found their best buy to date: a stand-alone three-bedroom home in Lower Hutt on an 800 square-metre site.

The couple recently subdivided the site, moving the house and creating a second plot.

“We spent NZ$300,000 on it, then another NZ$80,000 subdividing and moving the house, plus about NZ$15,000 renovating the house,” Sanjay says.

“The new market value of the land is NZ$160,000, and the land with the existing house has a NZ$410,000 market value.”

That’s an impressive NZ$175,000 equity gain – and they’re not finished yet.

They plan to build on the section, which will cost around NZ$300,00, but the end value is likely to be closer to NZ$560,000.

Even with a portfolio worth close to NZ$2 million and with a loan-to-value of under 60 per cent, they still live very frugally and spend most of each month sleeping on their sofa.

They believe anyone can make a start in property if they save, study the market, and think creatively.

“Right now, you need to create opportunity with a do-up or subdivision,” Sanjay says.

“You’ll need to save NZ$50,000 to NZ$70,000, then get some loans. We saved and did this project – if we can do it, everyone else can.”

First published 28 May, 2018.

Story by Amy Hamilton Chadwick

JUNO does not contain financial advice as defined by the Financial Advisers Act 2008. Consult a suitably qualified financial adviser before making investment decisions. This story reflects the views of the contributor only. Content comes from sources that JUNO considers accurate, but we do not guarantee that the content is accurate.

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