A Kiwi couple have returned to total destruction after a blaze left their holiday home near Taupo in ashes.

Kim Sullivan and her husband rented their house, on a quiet dead-end street overlooking Lake Mangakino, for a week on accommodation website Bookabach, Fairfax reported.

The guests provided references and paid up front, for two people to stay at the lakeside property.

However, early Monday morning the three-bedroom bach on Rimu St went up in smoke, the blaze so intense that it gutted the house and threatened nearby homes.

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"I have seen for myself the devastation, I went back yesterday and it was like a bad dream," Sullivan told Fairfax.

Taupo Detective Senior Sergeant Matt Cranshaw said the fire was "highly suspicious" but it was too early to speculate on the cause of the blaze.

The Mangakino bach was rented out when it went up in flame on Monday. Photo/Stephen Parker
The Mangakino bach was rented out when it went up in flame on Monday. Photo/Stephen Parker

As four fire crews rushed to the house on Monday, there were fears that two people were inside the burning bach, but the property was unoccupied.

"The people had rented through Bookabach before and they had some good feedback, we always look at people's feedback when it's a new person and they had two items of positive feedback on there," Sullivan said.

"We actually had more people booked to move in on Thursday, obviously they are not going to be staying there."

Fire investigator Bay of Plenty Coast Jon Rewi said the fire was being treated as suspicious.

He said there was evidence to suggest it started in the kitchen area but investigations were ongoing and the cause had not yet been determined.