Mr Hannah believes a drain pipe being constructed behind the property caused the flooding.
His neighbour's driveway had huge ruts dug into it from the flow of water as well.
"They have started working on it and I think there must have been a slip upstream that caused this. Our backyard has flooded before but nothing like this," he said.
Electronic equipment including a stereo and electric lawnmower along with furniture and bedding was also stored in the room.
"We've lost a lot of bits and pieces.
"It's a mess," he said.
Rotorua District Council works manager Peter Dine said CastleCorp had done some excavation work behind the property and had left two piles of dirt on site. This dirt was being removed but Mr Dine said he wasn't sure if this had caused the problem.
The heavy rain could have caused slips further up the hill between Gordon Rd and Mountain Rd where there was a large slip already, Mr Dine said.
"Staff will be out assessing things," he said.
Meanwhile, down the road from the Hannahs' property, the Mihaka family woke to a "river of mud, water and neighbours' rubbish" gushing down their property, drenching exercise equipment in a carport and flooding a locked storage shed.
Council staff were clearing a blocked drain outside her home when The Daily Post arrived.
Sherayne Mihaka said the water was flowing fast through her sloping property.
"You needed a kayak to go out the back. It was about a foot [30cm] deep," she said.
Her son, Storm Mihaka, had to rescue his young puppy from standing in neck-deep water.
"It was quite shocking," he said.
Julie Hills, who lives with Mihaka family, said the gushing water was frightening to watch.
"It was like a fast flowing river," she said.
Many other properties around the city have been affected. One on Lake Rd looked like a swimming pool, as did many parks.
CastleCorp general manager Mike Davies said some roads around the city flooded with drains overflowing and staff were out clearing them and removing debris yesterday. "There has been lots of surface flooding ... the rain was heavy and constant," he said.
Rain started about 5pm on Tuesday with light drizzle and by midnight torrential rain hit and carried on throughout the night dumping 70mm on the city by 8am yesterday and another 10mm by midday. Streets and garages flooded, trees and powerlines came down on Waipa State Mill Rd cutting power to the Red Stag Mill.
Rotorua Red Stag Mill general manager Tim Rigter said they had a turbine on site which could have supplied power to the mill but this was "tripped out" during the power outage as well.
"We need power to turn the boilers on to run it," he said.
Staff had to use 8 Mile Gate, a forestry road to get to work.
Unison customer relations manager Danny Gough said a fallen tree was responsible for the powerline down on Waipa State Mill Rd about 8am yesterday, cutting power to the mill.
Power was restored by midday.
MetService weather forecaster Geoff Sanders said a low from the Tasman crossing the Central North Island brought the heavy rain band to the region.
By today, the wild weather crossing the country from the northeast should start easing bringing light showers to the region, Mr Sanders said.
More heavy rain was expected from Monday next week.
"Rotorua is looking at a bit more rain yet.
"Some could be heavy," he said.
Springfield weatherman Brian Holden said Rotorua residents can look forward to a fine weekend but the rain could return on Monday.
