"The footprint was done by the developer but we changed the layout," says Donald, who points out that the configuration would work just as well for a family.
Kathy says the idea to build and run a B&B came about because the couple loves entertaining.
"We started doing it because we would run into people in a hotel somewhere and get talking and we'd say, 'If you're ever in Auckland, you must come and have a meal with us'," she says.
Guests stay on the top level, where there is a kitchenette on the landing and three bedrooms, all with en suites. Although the look is classic and restrained throughout these rooms, the wow factor is still delivered through Donald's choice of colours, fabrics, light fittings, tapware, furniture and artworks.
Donald, who still works in interior design, points out that the furniture and artworks have been "gathered on life's journey".
"I didn't want to theme the house," he says. "I don't like things to be matchy-matchy; I much prefer that eclectic look."
The Premier Suite features a beautiful stand-alone clawfoot bath framed with railways tiles in one corner. Through a door is a bathroom with shower, and his and hers wardrobes sit behind and either side of the bulkhead of the bed. A balcony enjoys views back to the city.
The other bedrooms on this level - The Green Room and The Red Room - also have railway tiles in their en suites that complement the colour schemes of the respective rooms.
On the middle level is Donald and Kathy's bedroom, with an en suite and laundry. Their space occupies a corner of the house so that it can be shut off from the living areas.
Across the hallway is a formal lounge with gas fire and built-in bookshelves.
This level also opens out to a veranda overlooking the street.
At one end of the lounge is what the couple call their "folly" - a space they created to look like a built-in veranda that connects to the kitchen at the back of the house.
Designed for entertaining, the country-style kitchen has vast expanses of Corian benches, a wine fridge, three DishDrawers, two ovens and lots of open shelving to accommodate everything from pots and pans to platters.
"This kitchen will be very hard to leave behind," says Donald, who bakes daily for guests.
Kitchen and dining room are part of an open-plan space, with a partial wall shielding "the snug" at the western end. A series of French doors along the rear of the house open it out to a covered deck surrounded by a subtropical garden.
Another favourite spot is the media room on the lower level, where they can shut themselves away to watch a movie.
Although the couple has loved playing host to visitors from far and wide, they now want to downsize and take things a bit easier. In fact, they have been so good at welcoming guests that Sunderland House is now rated number one B&B in Auckland City on tripadvisor.com - something that has made it even busier.
Donald exclaims, "We never thought it would be so successful!"