0:00:02 > 0:00:04It's easy to fall in love with a house, we've all done it.
0:00:04 > 0:00:06But it's not such a good idea
0:00:06 > 0:00:09if you're buying an investment property rather than a home.
0:00:09 > 0:00:13So, let's see what turned our buyers' heads on today's programme.
0:00:38 > 0:00:43From Manchester to Cardiff, Devon to Kent, you're never too far away
0:00:43 > 0:00:46from the sound of an auctioneer's gavel.
0:00:46 > 0:00:49Yes, thousands of places are sold at property auctions every year.
0:00:49 > 0:00:53So let's find out what tantalised the buyers on today's show.
0:00:53 > 0:01:00A busy main road nearby is just one of the problems with this detached house near Preston.
0:01:00 > 0:01:04Look at this crack. Not good at all.
0:01:04 > 0:01:10Will the new owner of this property in Southsea make the most of its student rental potential?
0:01:10 > 0:01:14More rooms equal more rent, equals more money.
0:01:14 > 0:01:21And near Durham, I take a look at a typical terrace, or is it?
0:01:21 > 0:01:24Probably not too many surprises in store. Oh, I don't know!
0:01:26 > 0:01:30All these properties have been sold at auction and we'll find out who bought them
0:01:30 > 0:01:34and what they paid for them when they went under the hammer.
0:01:36 > 0:01:42I'm in Bilsborrow, just north of Preston, three miles from the junction with the M6.
0:01:42 > 0:01:47The property I'm here to see is right on the side of the A6 and, as you can see,
0:01:47 > 0:01:51it's a very busy road, so that's not a good start. That's the house, though.
0:01:51 > 0:01:57150,000 to 160,000 quid was the guide price, three bedroom detached.
0:01:57 > 0:02:04It's known as the Rural Beat house because it used to be where the local bobby lived with his family
0:02:04 > 0:02:07and carried out his duties in the community.
0:02:07 > 0:02:10It's not the most attractive detached house I've ever seen,
0:02:10 > 0:02:14but with a garage and ample off-street parking it's got some plus points.
0:02:14 > 0:02:18That main road means you are well connected here,
0:02:18 > 0:02:23so time for Roberts Of The Yard to inspect the site, I'd say!
0:02:25 > 0:02:28It goes without saying that one of the first things to do
0:02:28 > 0:02:33is make sure the house has got double or triple glazing to get rid of some of that road noise.
0:02:33 > 0:02:36A nice entrance foyer here, somewhere to hang coats,
0:02:36 > 0:02:38and an interesting sort of anteroom there.
0:02:38 > 0:02:42Into the main part of the house and all the main rooms go off here.
0:02:42 > 0:02:45Kitchen there - it looks a bit tired and dated,
0:02:45 > 0:02:49so you'd want to spend money on that, but you'd definitely reap rewards.
0:02:49 > 0:02:52Into this room, which is your lounge.
0:02:52 > 0:02:55I quite like the design, it's been knocked through to give
0:02:55 > 0:02:58a right big sort of space here, which we really like.
0:02:58 > 0:03:00Open fires again, that's nice to see.
0:03:00 > 0:03:04Big bay window, definitely again make sure that's got double glazing,
0:03:04 > 0:03:07but it does let loads of light into the room.
0:03:07 > 0:03:11And, all in all, yeah, I mean, it's fairly standard, but it seems a good sized house.
0:03:18 > 0:03:21The decor maybe a bit dated, but the proportions here are good.
0:03:21 > 0:03:26No quirky shape to contend with, but plenty of space and light.
0:03:37 > 0:03:41What I like about this house is that it is as you hope it will be.
0:03:41 > 0:03:47I mean, you could say it's a bit dull in some ways, the fact that things are exactly as they should be.
0:03:47 > 0:03:51We've got three bedrooms, good sized doubles - there, there and there.
0:03:51 > 0:03:53Obviously, they need redecorating. A bathroom there.
0:03:53 > 0:03:57Everything is in the right place, but, hey, you shouldn't knock it.
0:04:04 > 0:04:10There's a lot of modernisation to do here for sure, but with three good sized bedrooms...
0:04:14 > 0:04:18..a large garden overlooking agricultural land at the back
0:04:18 > 0:04:26and a garage and plenty of off-street parking at the front, I'm starting to forget all about that main road.
0:04:29 > 0:04:32It was all going so well and then I see something which makes me think
0:04:32 > 0:04:36maybe the house isn't as solid as I thought. Look at this crack.
0:04:36 > 0:04:42Not good at all. In itself, that would be bad, but look above the window here and it continues there.
0:04:42 > 0:04:44The simplest explanation for this could be
0:04:44 > 0:04:50that we've got the double glazing, new, probably. Obviously not original from when the house was built,
0:04:50 > 0:04:54so maybe that's been done badly, or maybe they messed around with the lintel.
0:04:54 > 0:04:57It could be something much more serious, though. Either way,
0:04:57 > 0:05:03check outside, see if there's any indication there and then get a structural surveyor in.
0:05:03 > 0:05:07That crack could have a serious effect on the budget. Remember, this place had
0:05:07 > 0:05:12a guide price of 150,000 to 160,000, but would sorting out this old police house
0:05:12 > 0:05:15leave more than a few coppers left over?
0:05:17 > 0:05:21I've invited a local estate agent along to assist me with my enquiries.
0:05:21 > 0:05:24He sees the main road as a positive rather than a negative.
0:05:24 > 0:05:26It's a busy road,
0:05:26 > 0:05:29but I really don't think it would put anyone off at all.
0:05:29 > 0:05:33We're about four miles from Preston, similar distance to Garstang
0:05:33 > 0:05:36and so it is a good, popular location.
0:05:36 > 0:05:40But could that location translate into a good investment?
0:05:40 > 0:05:45This property does require extensive modernisation, but if you got it for close to
0:05:45 > 0:05:51the £150,000 to £160,000 guide price then the rewards might be attractive.
0:05:51 > 0:05:56Once renovated, I would expect this to achieve around about the £250,000 mark.
0:05:56 > 0:06:04There's also plenty of room to extend here which could add another £50,000 to your asking price.
0:06:04 > 0:06:07Bearing in mind its good location and the other towns nearby,
0:06:07 > 0:06:13you should expect to get around £700 per calendar month in rental income.
0:06:16 > 0:06:20So, a good sized house in a reasonable location.
0:06:20 > 0:06:23The only two things I can see that would put people off
0:06:23 > 0:06:26would be proximity of that road, and it is very busy and, of course,
0:06:26 > 0:06:30that crack, which definitely needs further investigation.
0:06:30 > 0:06:32Let's see who fancied it at the auction.
0:06:34 > 0:06:40Lot number 105 is the Rural Beat House, Garstang Road.
0:06:40 > 0:06:44A three bedroom detached house offered with vacant possession.
0:06:44 > 0:06:49Someone give me 80? 80 here. Thank you, I'll take it. 90,000. 90 there. 100. I've got 90 here.
0:06:49 > 0:06:53100, I'm looking for. And I have it. 110? 110. 120.
0:06:53 > 0:06:57130, sir. 125, new bidder.
0:06:57 > 0:07:00130 can I say? 130 I have. 135. 140. 145.
0:07:00 > 0:07:05150, new bidder. 155, sir? 160, madam.
0:07:05 > 0:07:10165. 170. 175.
0:07:10 > 0:07:15180. 185? No, thinking about it.
0:07:15 > 0:07:21Are we all finished at 180? 181. New bidder on my right. 182, madam.
0:07:21 > 0:07:24183. 184.
0:07:24 > 0:07:31185. 186. 187. 188. 189, sir? 190.
0:07:31 > 0:07:37191. 192. 193. 194...
0:07:37 > 0:07:39195.
0:07:39 > 0:07:44196. 197? No? At £196,000, then.
0:07:44 > 0:07:48Are we all finished at 196?
0:07:48 > 0:07:51I'll take it half if it helps.
0:07:51 > 0:07:53It does. 197 I need, madam.
0:07:55 > 0:07:57197 and a half.
0:07:57 > 0:07:59198. 199...
0:07:59 > 0:08:02No, shaking his head. Are we all finished?
0:08:02 > 0:08:06198,500 with you, madam. The first time and at 198,000...
0:08:06 > 0:08:09The second time at £198,500.
0:08:09 > 0:08:10Sold to you, madam.
0:08:10 > 0:08:14At £198,500,
0:08:14 > 0:08:20the property went for nearly £50,000 over the guide price.
0:08:20 > 0:08:22The winning bidders were Sally and Jeff.
0:08:22 > 0:08:29I met up with them back at the old rural beat house to find out what their plans were for it.
0:08:29 > 0:08:33- Sally, Jeff, congratulations. - Thank you.- Thank you.
0:08:33 > 0:08:36- Why did you want to buy this place? - It was location for us.
0:08:36 > 0:08:40It's only four miles from where we live now, on the busy A6 road and not far from the...
0:08:40 > 0:08:44- Hang on a minute. It's good that it's on...- Yes, absolutely, absolutely.
0:08:44 > 0:08:47That's interesting. I didn't expect that.
0:08:47 > 0:08:50There's a small amount of passing trade, always helpful.
0:08:50 > 0:08:55- For what?- Importing doors and windows from Europe and then we sell to the social housing market.
0:08:55 > 0:08:59So the plan is what, then? You're not going to use it as a house?
0:08:59 > 0:09:04No, it's for our business. We're bursting at the seams where we are now so we need to change offices.
0:09:04 > 0:09:06I hadn't thought of this as a commercial premises,
0:09:06 > 0:09:10but, now you mention it, I guess it makes perfect sense.
0:09:10 > 0:09:12Tell me more about the business, Jeff?
0:09:12 > 0:09:18We design sustainable construction products, in particular
0:09:18 > 0:09:24- timber doors and windows, that we import from Estonia, Latvia, Lithuania and Poland.- Right.
0:09:24 > 0:09:29And a little bit from Liverpool, the fifth country there! And we...
0:09:29 > 0:09:32- Well known for its forests! - Absolutely, yes!
0:09:32 > 0:09:35We design them here, so we need a design office with
0:09:35 > 0:09:42a reasonable location for people to get to, but we don't need to have a manufacturing place.
0:09:42 > 0:09:45So why not go for an existing commercial premises?
0:09:45 > 0:09:50- Why buy a house and use that as a place to house your business? - We couldn't find anywhere.
0:09:50 > 0:09:54For a year we've been looking, and the last six to eight months
0:09:54 > 0:09:58we've really upped the ante and this actually came up
0:09:58 > 0:10:02a year or so ago, then it very quickly had a "sold" sign up so we ruled it out.
0:10:02 > 0:10:05And there's just been nothing else that's been available.
0:10:07 > 0:10:14Luckily for Jeff and Sally, the house eventually came up at auction so they jumped at the chance of getting it.
0:10:14 > 0:10:16But changing its use won't be straightforward.
0:10:16 > 0:10:22We've spoken to planning and highways and technically they see no issues with that.
0:10:22 > 0:10:27Before you move on, "highways" - I would have thought being by the side of a busy road,
0:10:27 > 0:10:31they'd want to make sure that parking was more than there is now.
0:10:31 > 0:10:35No, they want the circle at the front, the little in and out, to stay the same,
0:10:35 > 0:10:42and, apart from that, as long as we've got enough parking, and we've intimated five or six cars,
0:10:42 > 0:10:46'and they've got room for that either side, they don't seem too bothered.'
0:10:46 > 0:10:50'This building was already partly commercial - it was an old police station and police house,
0:10:50 > 0:10:56'so when we spoke to highways, they were already in favour. We had to have their endorsement before'
0:10:56 > 0:11:01we went to planning, which we did, and they're happy to change use from domestic to commercial.
0:11:03 > 0:11:09It looks as though that's one major box ticked, the permission for change of use.
0:11:09 > 0:11:16If they don't get it, it's back to the drawing board and they may have to redevelop this as a house.
0:11:16 > 0:11:20But, all being well, how do they plan to go about converting it into offices?
0:11:20 > 0:11:23Changing doors and windows because at the moment...
0:11:23 > 0:11:25- No kidding! - ..they're PVC so they've got to go!
0:11:25 > 0:11:30And we want to try and make it a little bit more contemporary without being too outlandish.
0:11:30 > 0:11:35So, we want to change the bay at the front, new full length windows,
0:11:35 > 0:11:38let in some more light, which we think will be a nice feature,
0:11:38 > 0:11:43and definitely decorate, get rid of the lovely wallpaper(!),
0:11:43 > 0:11:47the carpets, and generally, plumbing, electrics.
0:11:47 > 0:11:52Get rid of the bathroom upstairs - that will be utilised as an office, so will just get blocked off.
0:11:52 > 0:11:56Jeff and Sally will also need to make adjustments to the property to comply
0:11:56 > 0:12:01with new legal requirements such as disabled access,
0:12:01 > 0:12:07but before they do that, there is one major stumbling block which has to be sorted.
0:12:07 > 0:12:11There's an issue with the water. There's no water on in the house!
0:12:11 > 0:12:14- Really?- No. And our solicitor was finding it very difficult
0:12:14 > 0:12:17to get any information out regarding why the water's off
0:12:17 > 0:12:21and how we can get it turned back on, but we're persevering and hopefully we'll get that sorted.
0:12:21 > 0:12:26- You've got to get it sorted!- We have to get it sorted, we need water!
0:12:26 > 0:12:32They sure do, but it could be costly and might end up pushing Jeff and Sally's £30,000 to £40,000 budget
0:12:32 > 0:12:35to the absolute limit.
0:12:36 > 0:12:39So, how long until we see you in here?
0:12:39 > 0:12:43- Three to four months, we're hoping. - The pressure's on.- To be realistic.
0:12:43 > 0:12:47It's costing us money just sitting here, so the sooner we can move in the better,
0:12:47 > 0:12:50but realistically, at least three to four months because of the planning.
0:12:50 > 0:12:55It won't stop us getting on with the work inside, but if planning did say we can't go ahead,
0:12:55 > 0:12:58that will just change our plans as how we would decorate it
0:12:58 > 0:13:01and the kitchen and things would then have to be organised.
0:13:01 > 0:13:06- Good luck with it all. I hope it turns out exactly as you hope.- Thank you very much.- Thank you.
0:13:09 > 0:13:11Well, there you go.
0:13:11 > 0:13:16It wouldn't necessarily have been my first thought of a use for this place, but now I'm thinking about it,
0:13:16 > 0:13:20it makes a lot of sense and I'm sure that Jeff and Sally will do very well.
0:13:20 > 0:13:24But I have to say, I am very concerned about this whole water issue.
0:13:24 > 0:13:31That can add literally thousands of pounds to any development budget, obviously something to sort out.
0:13:31 > 0:13:34How will they get on? You can find out later in the show.
0:13:36 > 0:13:38This is Southsea in Hampshire,
0:13:38 > 0:13:44a part of Portsmouth generally regarded as the sea side resort area.
0:13:44 > 0:13:50There are grand Victorian townhouses, shops and cafes, which make it somewhere that attracts
0:13:50 > 0:13:53both seasonal visitors and long-term residents.
0:13:53 > 0:14:00One of the first recorded buildings here in Southsea was a fort built by Henry VIII in 1544.
0:14:00 > 0:14:06Now, I'm not here to see anything quite so grand, or indeed quite so old, but this terrace property is
0:14:06 > 0:14:10still worthy of our attention because it's a two-bedroom mid-terrace
0:14:10 > 0:14:15and it's in a student catchment area near Portsmouth University, so it's got great potential
0:14:15 > 0:14:20to become a student let, or has it? Let's have a look around.
0:14:20 > 0:14:24The property had a guide price of £90,000.
0:14:24 > 0:14:28The auction catalogue described it as requiring complete modernisation.
0:14:28 > 0:14:34From the front, it's not in bad shape, but I'm guessing there's work to be done inside.
0:14:35 > 0:14:42What a mess! Yes, I've got to say, this is an extremely dated property.
0:14:42 > 0:14:45The front reception room there and a disaster area down here.
0:14:45 > 0:14:49Now, you may not be able to see this, but there's a sort of faint water line along here,
0:14:49 > 0:14:55and the joists and the floorboard underneath are feeling extremely spongy.
0:14:55 > 0:14:57They're wobbling around.
0:14:57 > 0:15:01I think there's probably rising damp here, it's come up from the bottom
0:15:01 > 0:15:05up to the top and you can see this plaster is just coming off in my hands.
0:15:05 > 0:15:09I would get an expert in to inject some silicon into that as soon as possible.
0:15:09 > 0:15:12That could be quite an expensive job.
0:15:12 > 0:15:14Reception room through here.
0:15:14 > 0:15:17Now, as a developer, I quite like to open up spaces.
0:15:17 > 0:15:19You've got some lovely light coming in here,
0:15:19 > 0:15:23but I'm now thinking definite student let, so keep this wall up,
0:15:23 > 0:15:27because the front lounge area will have to become a bedroom.
0:15:27 > 0:15:32So, just remember, more rooms equal more rent equals more money.
0:15:32 > 0:15:34Ching-ching!
0:15:34 > 0:15:37Just how many rooms could you get in this place
0:15:37 > 0:15:41and how much would you need to spend to get them?
0:15:41 > 0:15:46So, this is the kitchen.
0:15:46 > 0:15:48Loving that wallpaper(!)
0:15:48 > 0:15:53All you've really got in here is a kitchen sink and, look, a downstairs bathroom.
0:15:53 > 0:15:56You've got a stud partition wall here.
0:15:56 > 0:16:00Now, my guess is that this toilet and bathroom is single skinned,
0:16:00 > 0:16:07which just means one brick, there's no air gap so the damp can come straight through.
0:16:07 > 0:16:11It's probably freezing cold in the winter. It's not really ideal.
0:16:11 > 0:16:16I'm just wondering if you could get this toilet and bathroom upstairs.
0:16:17 > 0:16:20There's definitely work to be done here.
0:16:20 > 0:16:25For a student rental, I'd keep the makeover basic and functional, but hard wearing.
0:16:25 > 0:16:30Obviously, things like the boiler will need to be checked and certified by a regular expert.
0:16:30 > 0:16:34Off the kitchen is a small backyard, but there's not much room to extend
0:16:34 > 0:16:38out here and I'm not sure if the expense would be worthwhile.
0:16:38 > 0:16:44Upstairs, there are just too small double rooms, one at the front and one at the back.
0:16:46 > 0:16:49On reflection, I really don't think it's worth
0:16:49 > 0:16:53bringing that bathroom upstairs and reducing this bedroom size.
0:16:53 > 0:16:57I think now I've had a good look around, I'd leave the layout as it is.
0:16:57 > 0:17:05If you're developing for a student rental, I'd try to keep all the bedrooms a similar size.
0:17:05 > 0:17:08It helps avoid arguments and makes the property easier to rent.
0:17:08 > 0:17:11But what sort of income can you expect to get in this area
0:17:11 > 0:17:16and just how far should you go with the renovation?
0:17:16 > 0:17:18I asked a local estate agent for his opinion.
0:17:18 > 0:17:25We're looking at a rewire, kitchen, bathroom, central heating. The bathroom is on the ground floor.
0:17:25 > 0:17:29I don't think it's a major negative in this kind of scenario,
0:17:29 > 0:17:34even though from looking at the bathroom, it does have a single-skinned structure to it.
0:17:36 > 0:17:40With a student rental, there may be a bit more maintenance work,
0:17:40 > 0:17:44but you'd be able to charge a significantly higher rent.
0:17:44 > 0:17:48As a family home, you'd probably rent this out at around £700 per calendar month.
0:17:48 > 0:17:54As a three bedroom student let you're probably looking between £850 to £900 per calendar month.
0:17:55 > 0:17:58That could increase your rental income by about a third,
0:17:58 > 0:18:02but what if you decided to renovate and sell it on?
0:18:02 > 0:18:06How much value could you add to that £90,000 guide price?
0:18:06 > 0:18:08Resale values for this property,
0:18:08 > 0:18:12I would say once in A1 condition, would be around £140,000.
0:18:13 > 0:18:17This is a pretty standard two-bed terrace.
0:18:17 > 0:18:20It needs work. That damp has to be sorted out for a start,
0:18:20 > 0:18:26but rent this out as a three bedroom property to students, and you've got a pretty good yield there.
0:18:26 > 0:18:28Now, that excites me.
0:18:28 > 0:18:30So, who spotted the potential here?
0:18:30 > 0:18:31Let's find out at the auction.
0:18:34 > 0:18:38Now we come to the next lot in your catalogue,
0:18:38 > 0:18:41lot number five, Sutherland Road in Southsea, Hampshire.
0:18:41 > 0:18:44Somebody wish to start at 75 for Sutherland Road?
0:18:44 > 0:18:4775, I have got here in the centre.
0:18:47 > 0:18:50And 76 bid, thank you. 77, I have.
0:18:50 > 0:18:5178? Eight's bid. And nine?
0:18:51 > 0:18:5580? 80,000. And one. Two.
0:18:55 > 0:19:02Three. Four. Five. And six. 86,000.
0:19:02 > 0:19:04The bidding's against you. Shaking the head.
0:19:04 > 0:19:08It's with you, sir, at £85,000 directly in front. Looking for...
0:19:08 > 0:19:09A new bidder on the left, at 86.
0:19:09 > 0:19:1586,000. 87? 87. 88, thank you. 89?
0:19:15 > 0:19:18Nine's bid. 90.
0:19:18 > 0:19:2091? Shake of the head.
0:19:20 > 0:19:27It's with you, sir, then at 90. Any of you two... OK, new bidder. You're close to each other. 91, 92.
0:19:27 > 0:19:31Three. 93. 94 I have. 95.
0:19:31 > 0:19:35I'll give you a half. 94 and a half? No? 94 and a half, new bidder.
0:19:35 > 0:19:3894 and a half. And five, sir?
0:19:38 > 0:19:4095. 95 and a half we have. And six?
0:19:40 > 0:19:4496. And a half we have.
0:19:44 > 0:19:4797. 97 and a half.
0:19:47 > 0:19:4898. And a half, sir?
0:19:48 > 0:19:5398,000 we have got. 98,000, I've got and I shall be selling.
0:19:53 > 0:19:5798,000 I have then once.
0:19:57 > 0:20:0098,000 twice.
0:20:00 > 0:20:0498,000 for the third and final time.
0:20:04 > 0:20:08Sold. It's your property, sir. 7022. Congratulations.
0:20:08 > 0:20:13Not surprisingly, there was a great deal of interest in this one in the auction room,
0:20:13 > 0:20:18but the man who made that winning bid of 98,000 was James.
0:20:18 > 0:20:23Despite his apparent youth, he's no stranger to auctions or property developing.
0:20:23 > 0:20:27I met up with him back at the Southsea terrace to find out more.
0:20:30 > 0:20:32- James, congratulations.- Thank you.
0:20:32 > 0:20:37- Tell me why you bought this property.- Well, I thought was a great location for students.
0:20:37 > 0:20:40There wasn't that much work that needs to be done to it.
0:20:40 > 0:20:43We can turn it over pretty quick and get rented out.
0:20:43 > 0:20:47So, you've bought this property to let as a landlord to students?
0:20:47 > 0:20:49- Yeah, yeah. - So, what is your background?
0:20:49 > 0:20:54Well, I was a student myself, graduated in 2004,
0:20:54 > 0:20:56went back home to Torquay for a year.
0:20:56 > 0:21:01My parents helped me out with buying a place that I renovated and sold, which all worked quite well,
0:21:01 > 0:21:05then I moved back to Portsmouth and started buying student properties.
0:21:05 > 0:21:09- How many properties have you got now, James? - This will be the seventh.
0:21:09 > 0:21:11- Seven properties! How old are you?- 25.
0:21:11 > 0:21:14- So you're 25 years old, and you've really cracked on with this.- Yeah.
0:21:14 > 0:21:18Is this something you see yourself doing for the foreseeable future?
0:21:18 > 0:21:20For the next ten years at least.
0:21:20 > 0:21:24If I stop now, it would be a bit silly, now that I've sort of learned how to do it.
0:21:24 > 0:21:30So, James has latched onto a market that he knows really well.
0:21:30 > 0:21:33As he went to university in Portsmouth himself, he knows
0:21:33 > 0:21:37this part of Southsea will be very attractive to students looking to rent.
0:21:37 > 0:21:41He knows how much they'll pay and what they'll expect.
0:21:41 > 0:21:45When I first came round, I thought you could probably get four students in here.
0:21:45 > 0:21:47- Four students?- Yeah, four.
0:21:47 > 0:21:51- Now, how are you going to get four students in here? - Two upstairs and two downstairs.
0:21:51 > 0:21:55I tried it down the road with a house with the same layout as this -
0:21:55 > 0:21:59by putting the bathroom upstairs and having two bedrooms upstairs and two downstairs,
0:21:59 > 0:22:02and then having this area here as the kitchen/lounge,
0:22:02 > 0:22:04it worked pretty well.
0:22:04 > 0:22:11The kitchen's not the biggest in the world and the lounge isn't the biggest in the world...
0:22:11 > 0:22:13- You can say that again! - You can fit a couple of sofas in.
0:22:13 > 0:22:16But it's going to be such a squeeze, isn't it?
0:22:16 > 0:22:19Yeah, it is tight, but we can stick a plasma on the wall,
0:22:19 > 0:22:23two small sofas and keep it all looking, you know, neat and modern.
0:22:25 > 0:22:27Ah-ha! That ought to do it!
0:22:27 > 0:22:29You see, it's all about knowing your market.
0:22:29 > 0:22:32It's going to be a squeeze, that's for sure,
0:22:32 > 0:22:38but by moving the bathroom upstairs and shifting the kitchen into the space left behind,
0:22:38 > 0:22:42James is convinced he can make it a four-bed rental.
0:22:43 > 0:22:46So, are you against the clock with this house?
0:22:46 > 0:22:49You've got to get it ready for the new term.
0:22:49 > 0:22:53- Yeah, it's going to be tight, but it's already rented now.- Really?
0:22:53 > 0:22:59- Yeah.- You've got your tenants?- Yeah, they signed the contract yesterday. - No?!- So...- Like this?
0:22:59 > 0:23:02Yeah - we've got a house round the corner that's exactly the same,
0:23:02 > 0:23:06they looked round that. We do the same thing in each house anyway.
0:23:06 > 0:23:09So, yes, you know, we've got a few months to fix it up.
0:23:09 > 0:23:12- So how much are you going to spend on this?- Around 15,000.
0:23:12 > 0:23:14- You've got a lot of damp out there, as well.- Yeah.
0:23:14 > 0:23:19The damp's the main issue with this house. But once you get in,
0:23:19 > 0:23:22hack all the render off, inject it and then re render it it's not...
0:23:22 > 0:23:25it's not a massive, massive problem.
0:23:25 > 0:23:28But the student lets, it is hassle because it is such a high turnover
0:23:28 > 0:23:31of different tenants, but it's working for you, isn't it?
0:23:31 > 0:23:35Well, with the student lets you you get a lot more than you would
0:23:35 > 0:23:39with anyone else who'd rent the property, although wear and tear does increase.
0:23:39 > 0:23:42But I've always got people that can come in and paint the walls anyway,
0:23:42 > 0:23:50- so it's not drastic if you get marks on the walls or a cupboard breaks. - You can't sniff at 13% yield.- Yeah.
0:23:50 > 0:23:53- No, it's not bad!- James, good luck with this.- Thank you.
0:23:53 > 0:23:58- It'll be exciting to see what you do with this place. - Thanks.- Well done.- Cheers.
0:24:04 > 0:24:09James has bought in an area that he knows well and in a good location for his target market.
0:24:09 > 0:24:11Basically, boy done good!
0:24:11 > 0:24:14And only 25 years old! But the pressure's on.
0:24:14 > 0:24:20He's only got a couple of months to get this place sorted before his new students move in.
0:24:20 > 0:24:25Will he get it done in time and will his new tenants find it a bit of a squeeze?
0:24:25 > 0:24:27You can find out later on in the show.
0:24:29 > 0:24:33Still to come, a terrace property near Durham with a low guide price.
0:24:33 > 0:24:38And what's better, unusually for this kind of property, it's got an upstairs loo.
0:24:39 > 0:24:44Can James really squeeze four bedrooms into this Southsea student let?
0:24:44 > 0:24:48We didn't want to have to compromise with smaller or larger units that we didn't want.
0:24:50 > 0:24:57But, first, it's back to Preston and the Rural Beat House to tot up the old bill!
0:25:01 > 0:25:09Earlier in the show, I met Jeff and Sally who just bought this three bedroom detached house
0:25:09 > 0:25:15near Preston in Lancashire for £198,500. What did they plan to do with it?
0:25:15 > 0:25:18Why, turn it into an office, of course!
0:25:18 > 0:25:22Obvious when you come to think of it, especially given its location on the busy A6.
0:25:22 > 0:25:29The couple were hoping to attract passing trade by transforming this old police house into
0:25:29 > 0:25:34premises that would show off their sustainable wooden doors and windows,
0:25:34 > 0:25:38so the UPVC definitely had to go, but would they get planning permission
0:25:38 > 0:25:43for their bold plan and would they find that elusive water supply?
0:25:45 > 0:25:51Well, six months on, and it's obvious there have been some big changes here.
0:25:51 > 0:25:55With that new full height bay window at the front, you'd hardly think that
0:25:55 > 0:25:59it was the same house, but it looks as though work is still going on.
0:25:59 > 0:26:01Originally, Jeff and Sally had hoped to be in
0:26:01 > 0:26:03within three to four months,
0:26:03 > 0:26:06though it turns out that connecting the water
0:26:06 > 0:26:08was the least of their problems.
0:26:08 > 0:26:10I don't know where to start!
0:26:10 > 0:26:14As always, I think everybody does more than you think,
0:26:14 > 0:26:17so you start off with one plan and then before you realise it
0:26:17 > 0:26:19the end product is slightly left of
0:26:19 > 0:26:21what you thought you were going to do.
0:26:21 > 0:26:25The roof detail at the front of the property is probably the biggest change.
0:26:25 > 0:26:29That slowed us right up, as well as taking the roof back,
0:26:29 > 0:26:32building in a new pitch ready for the new bay.
0:26:32 > 0:26:35So, pleased with it, but that took a lot of time.
0:26:35 > 0:26:39We wanted a really good showroom, so we stripped out all the fireplaces
0:26:39 > 0:26:42that were in here to make this room much bigger.
0:26:42 > 0:26:44That meant that we had to do some structural work
0:26:44 > 0:26:47which meant that we had to get a structural engineer
0:26:47 > 0:26:51and we found that there were some problems with the roof in the garage
0:26:51 > 0:26:53which we wanted to convert to an office,
0:26:53 > 0:26:56so we had to take the roof off and put a new roof on.
0:26:56 > 0:27:00And whilst we were there the ceiling was quite low,
0:27:00 > 0:27:03so we built it up higher, so we had to go back to building control for that.
0:27:06 > 0:27:08So, all-in-all, Jeff and Sally
0:27:08 > 0:27:11have had a lot of problems to contend with.
0:27:11 > 0:27:15They encountered cracking in the concrete that they had laid
0:27:15 > 0:27:17and problems with the exterior render.
0:27:17 > 0:27:22Then a lead pipe had to be removed from under the freshly laid tarmac
0:27:22 > 0:27:26and, to top it all, they had to remove 160 tonnes
0:27:26 > 0:27:28of soil to level the land at the back.
0:27:28 > 0:27:31But with all those dramas behind them now,
0:27:31 > 0:27:36the couple can finally look forward to moving into their new offices.
0:27:40 > 0:27:42OK, so this is going to be my office
0:27:42 > 0:27:44and the reason why I love it is it's at the back,
0:27:44 > 0:27:48no road noise, looking out on to the fields.
0:27:48 > 0:27:51They have ponies out there, so it reminds me a bit of home,
0:27:51 > 0:27:54and it's just lovely and quiet and peaceful
0:27:54 > 0:27:56and I'm delighted with it.
0:28:02 > 0:28:04When we first planned the project,
0:28:04 > 0:28:07I'm not sure which office we were going to work in,
0:28:07 > 0:28:11but I got the chance of this room and we put the special feature
0:28:11 > 0:28:15on the front and so it's a really nice looking office.
0:28:15 > 0:28:19We've put special lighting on so we can cope with computers
0:28:19 > 0:28:24and we've put this special glazing in here for road traffic noise,
0:28:24 > 0:28:27so it reduces the amount of noise on this very busy road.
0:28:27 > 0:28:31Compared to the office that I've been working in on the farm,
0:28:31 > 0:28:35which was small and dingy, this is my new paradise!
0:28:41 > 0:28:44With the garage, third bedroom and bathroom
0:28:44 > 0:28:46all now converted into offices,
0:28:46 > 0:28:51the couple should have enough space, but only just.
0:28:52 > 0:28:55At one stage, Jeff and Sally had considered
0:28:55 > 0:28:58building a second storey over the old garage
0:28:58 > 0:29:02to add extra space upstairs, but that would have meant
0:29:02 > 0:29:05yet more expense and delays for planning.
0:29:05 > 0:29:08With everyone crammed into makeshift offices in their home,
0:29:08 > 0:29:12it seems that their employees are also itching to move in.
0:29:12 > 0:29:15They're really excited about it.
0:29:15 > 0:29:18I think they were pleased that we were
0:29:18 > 0:29:20committing to taking the business forward
0:29:20 > 0:29:23and the fact that we'd bought a building
0:29:23 > 0:29:26that we'd actually move everybody into,
0:29:26 > 0:29:28that's been a really good boost for them.
0:29:28 > 0:29:31It gets a bit too squashed in our offices
0:29:31 > 0:29:33and it's all just... It would be very,
0:29:33 > 0:29:35really nice to get our privacy back
0:29:35 > 0:29:37and while we've got a great team it...
0:29:37 > 0:29:39It would be the end of an era and hopefully
0:29:39 > 0:29:42the start of a good new one, so I'm delighted.
0:29:42 > 0:29:46As a business that specialises in environmentally friendly products,
0:29:46 > 0:29:50Jeff and Sally have taken care to make this old police house
0:29:50 > 0:29:53as energy efficient as they possibly can.
0:29:57 > 0:30:01They've added extra insulation and, of course, new doors and windows.
0:30:01 > 0:30:05There are just a few bits and pieces to finish off here.
0:30:05 > 0:30:11Carpets and tarmac will be laid and the inside and outside painted.
0:30:11 > 0:30:15The couple also plan to put in a storage shed on a concrete base
0:30:15 > 0:30:19that they've had put down, but they expect to be moving in very soon.
0:30:19 > 0:30:23All these new facilities have come at a cost, though.
0:30:23 > 0:30:26They estimate they've gone £10,000 to £15,000
0:30:26 > 0:30:28over their original £40,000 budget.
0:30:28 > 0:30:32That takes their total spend here up to around 255,000,
0:30:32 > 0:30:37so have they been throwing their money down the drain?
0:30:40 > 0:30:44We invited two local estate agents to brave the weather
0:30:44 > 0:30:47and take a look at Jeff and Sally's new offices.
0:30:47 > 0:30:49I think it's an excellent property.
0:30:49 > 0:30:54I think the way they've transformed it into offices and showroom
0:30:54 > 0:30:56from originally a very run down
0:30:56 > 0:31:01police house is quite remarkable and it shows extremely well.
0:31:01 > 0:31:05Absolutely fantastic. The changes are obviously very significant.
0:31:05 > 0:31:07Everything looks of extremely good quality
0:31:07 > 0:31:10and I think they've made an absolutely superb job.
0:31:10 > 0:31:14As a commercial premises, I think the property has a lot going for it.
0:31:14 > 0:31:17Obviously, in particular, the parking is extremely good.
0:31:17 > 0:31:21That's essential in a commercial property.
0:31:21 > 0:31:23The location is also extremely good,
0:31:23 > 0:31:27it's very well placed between the market town of Garstang and Preston,
0:31:27 > 0:31:33which is a city now, and also the motorway network is also very close by.
0:31:34 > 0:31:37With work almost complete, Jeff and Sally
0:31:37 > 0:31:39now have a well soundproofed property
0:31:39 > 0:31:41in a great location, but it's cost them nearly
0:31:41 > 0:31:44255,000 to get to this stage.
0:31:44 > 0:31:48How much do the estate agents think it's now worth?
0:31:49 > 0:31:53I would be looking to market the property at around about the £290,000 mark.
0:31:53 > 0:31:59I believe I could sell this property as a commercial enterprise for £325,000.
0:31:59 > 0:32:00I think they're great figures.
0:32:00 > 0:32:03They're along probably what we thought.
0:32:03 > 0:32:04- No huge surprise.- No.
0:32:04 > 0:32:10Those figures could give the couple £40,000 to £70,000 pre tax profit
0:32:10 > 0:32:14if they decided to sell, but having come this far
0:32:14 > 0:32:17the main priority is obviously to get the business
0:32:17 > 0:32:18moved in and their own home back.
0:32:21 > 0:32:23It'll be a great move for the business
0:32:23 > 0:32:26and I think it'll be great for the team to have office premises.
0:32:26 > 0:32:29They've been really tolerant and patient,
0:32:29 > 0:32:31but this will be ten times better for them.
0:32:40 > 0:32:44I'm in Stanley in County Durham which,
0:32:44 > 0:32:49as everybody knows, is where the Pink Panther came from.
0:32:49 > 0:32:52All together now... HUMS PINK PANTHER THEME
0:32:54 > 0:32:57Strictly speaking though, of course, that's not true.
0:32:57 > 0:33:03But there are some lovely old buildings and traditional terraces.
0:33:03 > 0:33:06Let's hope that the property I'm here to see
0:33:06 > 0:33:10left both the person who bought it tickled and in the pink.
0:33:17 > 0:33:20OK, so, the Pink Panther wasn't actually from Durham,
0:33:20 > 0:33:24but just like Inspector Clouseau I'm hunting for elusive treasure
0:33:24 > 0:33:27and the property I'm here to see could well be it.
0:33:32 > 0:33:37So here it is, this little two-bedroom mid-terrace gem.
0:33:37 > 0:33:41£40,000 to £45,000 was the guide price, that's a great start.
0:33:41 > 0:33:42And what's better,
0:33:42 > 0:33:47unusually for this kind of property, it's got an upstairs loo.
0:33:47 > 0:33:49Happy days!
0:33:49 > 0:33:53So, no need to worry about expensive extensions
0:33:53 > 0:33:57or plumbing costs to adjust the layout, but does this place
0:33:57 > 0:34:02tick all the right boxes as far as investment potential is concerned?
0:34:02 > 0:34:06So, probably not too many surprises in store.
0:34:06 > 0:34:08Oh, I don't know, the first one is
0:34:08 > 0:34:10it's actually in pretty good condition.
0:34:10 > 0:34:14One big living room area here that you come straight into.
0:34:14 > 0:34:17Disproportionately large fireplace,
0:34:17 > 0:34:21but the room has a really nice open feel to it.
0:34:21 > 0:34:22Good use of space here.
0:34:22 > 0:34:24This is the area underneath the stairs,
0:34:24 > 0:34:26again, it just really opens the room up.
0:34:26 > 0:34:31Then through into the kitchen, a little rear porch area there.
0:34:31 > 0:34:33The kitchen itself, well, it's a bit tired.
0:34:33 > 0:34:38There's knobs missing, a few doors here and there need sorting out,
0:34:38 > 0:34:40but overall very serviceable.
0:34:40 > 0:34:43What are you going to use this property for?
0:34:43 > 0:34:46If you're going to rent it, then you want to get away without
0:34:46 > 0:34:48spending too much doing this up
0:34:48 > 0:34:51cos any money you can save has to be good news.
0:34:51 > 0:34:53So far so good, then.
0:34:53 > 0:34:54The property has been looked after,
0:34:54 > 0:34:58it's clean and just needs a coat of paint here and there,
0:34:58 > 0:35:02so you could turn it around as an investment quite quickly.
0:35:04 > 0:35:09So, upstairs, two bedrooms, great-sized one of at front there,
0:35:09 > 0:35:13smaller one towards the back, and then that upstairs bathroom.
0:35:13 > 0:35:17It's not just an average bathroom, a really nice bathroom.
0:35:17 > 0:35:21You've got a corner bath, you've got this nice shower enclosure, here.
0:35:21 > 0:35:26It just tops off what is a really good, solid little property.
0:35:26 > 0:35:29There are a few things to sort out here and there,
0:35:29 > 0:35:32but it's mostly straightforward DIY stuff.
0:35:32 > 0:35:35The only negative that I can see is the lack of parking,
0:35:35 > 0:35:38but even that could turn out to be a positive in the long run.
0:35:41 > 0:35:43At the front you've got something quite interesting
0:35:43 > 0:35:46and I imagine this was a road, once.
0:35:46 > 0:35:50As it is now, it's an unadopted road and it has got grass all over it,
0:35:50 > 0:35:53but what people have done is that they've claimed the area
0:35:53 > 0:35:56directly outside their property as their own.
0:35:56 > 0:36:00It's never completely theirs because there will always be a right of way along here,
0:36:00 > 0:36:02but you could lineate off,
0:36:02 > 0:36:06maybe put a fence around the area in front of your property,
0:36:06 > 0:36:08with a gateway of course,
0:36:08 > 0:36:10and after ten to 12 years you could then say you have
0:36:10 > 0:36:12the right to own this bit of land.
0:36:12 > 0:36:15Well, you know, it's a nice additional thing to have.
0:36:15 > 0:36:18So, the property's a good one,
0:36:18 > 0:36:22but what about that guide price of 40,000 to 45,000?
0:36:22 > 0:36:25How does that compare to other local properties
0:36:25 > 0:36:27and what scope would it give an investor?
0:36:30 > 0:36:33A local estate agent should be able to provide the answers.
0:36:33 > 0:36:35What does he think of the place?
0:36:37 > 0:36:41It's a good property, situated in a decent area of Stanley.
0:36:41 > 0:36:44The property is in reasonably good condition.
0:36:44 > 0:36:48I believe it would represent a good opportunity for investment.
0:36:48 > 0:36:51There will be a decent demand for local people to rent the property
0:36:51 > 0:36:54and there's also the possibility of people renting from
0:36:54 > 0:36:58outside the area with a view to commuting to Newcastle
0:36:58 > 0:37:00and to Durham for work purposes.
0:37:00 > 0:37:03I would expect the rental potential to be in the region
0:37:03 > 0:37:06of £350 to £375 per calendar month.
0:37:06 > 0:37:10If a buyer got it for around the £40,000 to £45,000 guide price
0:37:10 > 0:37:13they could be looking at a potential yield
0:37:13 > 0:37:16of around 10%, but what about resale?
0:37:16 > 0:37:20Would it be possible to add value by putting in a new kitchen?
0:37:23 > 0:37:25Once renovated I would expect it to achieve
0:37:25 > 0:37:30somewhere in the region of £60,000 if put back on to the market for resale.
0:37:30 > 0:37:34As far as my hunt for property treasure goes then,
0:37:34 > 0:37:39you could say that I'm well and truly on the right track.
0:37:39 > 0:37:43Well, if you can't see that this is a potentially fantastic little
0:37:43 > 0:37:46investment property then I ain't taught you nuthin'!
0:37:46 > 0:37:49Great one to go for, and for that guide price
0:37:49 > 0:37:51of £40,000 to £45,000 you really can't go wrong.
0:37:51 > 0:37:53Let's see who spotted it at the auction.
0:37:57 > 0:37:59Lot number two is the terraced house,
0:37:59 > 0:38:0222 Bell Street in Stanley, Durham.
0:38:02 > 0:38:06Guide price £40,000 to £45,000.
0:38:06 > 0:38:09Start me off in the room if you like, or on the phone.
0:38:11 > 0:38:1430,000. Beg your pardon? 30,000. 25?
0:38:14 > 0:38:1625 taken in the room. 25.
0:38:16 > 0:38:1926. 27. 28. 29 if you want it, sir.
0:38:19 > 0:38:23I got 28 here. 29? £29,000. What about the phone, coming in?
0:38:23 > 0:38:2530,000 here. 31.
0:38:25 > 0:38:31Coming in again, sir? I've got 31. £31,000. 32. 33 I've taken.
0:38:31 > 0:38:32Any advance on 33?
0:38:32 > 0:38:35You're all right at 34 if you want it. I've got 33 here.
0:38:35 > 0:38:37You're back in at 34. At 34,000.
0:38:37 > 0:38:40£35,000. Looking for 36.
0:38:40 > 0:38:43I got 36. I've got 37 against you.
0:38:43 > 0:38:46£38,000. 39. I've got £39,000.
0:38:46 > 0:38:48Looking for 40.
0:38:48 > 0:38:50£40,000. Any advance on 40?
0:38:50 > 0:38:53What about you, Richard, going another one? You're not.
0:38:53 > 0:38:54Yours at 40 then, Alan.
0:38:54 > 0:38:57Anybody else coming in at £40,000?
0:38:59 > 0:39:03Sold to Alan's telephone bid at £40,000.
0:39:03 > 0:39:08That two-bed terrace sold for £40,000 to first time property developer
0:39:08 > 0:39:12and local lad Mark, who was the phantom phone bidder!
0:39:12 > 0:39:14At least that's what I thought
0:39:14 > 0:39:17until I caught up with him back at the house.
0:39:19 > 0:39:22- Good to meet you.- Hi, there. - Congratulations. Well done.
0:39:22 > 0:39:25- You've got yourself a nice little house.- Yes.
0:39:25 > 0:39:28The auction then, you weren't there, you were on the phone.
0:39:28 > 0:39:32I wasn't on the phone. I couldn't handle the pressure.
0:39:32 > 0:39:35My brother-in-law did the bidding. I was sat next to him.
0:39:35 > 0:39:40- Good grief.- We'd set the figure, we'd sat waiting and we'd had a good...
0:39:40 > 0:39:42We'd come and had a look at the house with the estate agent
0:39:42 > 0:39:47and we knew next door had sold for about the 60 mark, so that was,
0:39:47 > 0:39:49you know, that was the guide.
0:39:49 > 0:39:54You know, I think we were prepared to bid up to 52, 53
0:39:54 > 0:39:57and just absolutely blown away we got it for 40.
0:39:57 > 0:40:01We were skipping round the front room, dancing and doing jigs!
0:40:01 > 0:40:05I'm not surprised! Mark has done really well to pick this up
0:40:05 > 0:40:09at the guide price and as he lives locally he knows all about the area.
0:40:09 > 0:40:14My best friend used to go out with a girl that lived across the street.
0:40:14 > 0:40:17- No way!- His first girlfriend lived across the street
0:40:17 > 0:40:19and I had a friend lived in that street,
0:40:19 > 0:40:22and an aunt and uncle that lived in the street across.
0:40:22 > 0:40:25That's 20 odd years ago, so I came back and once my
0:40:25 > 0:40:28brother-in-law mentioned it I came up a few times in the evening.
0:40:28 > 0:40:31It seemed quiet, it's a pleasant little spot and I'd live here.
0:40:31 > 0:40:36That's my criteria, if I'd live somewhere then I'll have a go at buying it.
0:40:36 > 0:40:38What do you do when you're not doing this?
0:40:38 > 0:40:43I do a kind of health check, like a health MoT looking at your pH
0:40:43 > 0:40:47and your electrolytes in your blood, see how healthy you are.
0:40:47 > 0:40:50I got interested in health about seven or eight years ago
0:40:50 > 0:40:52and started going on courses and reading
0:40:52 > 0:40:54and a hobby changed to into my job.
0:40:54 > 0:40:58I got sick of the rat race and more interested in my hobby and...
0:40:58 > 0:41:01Well done, you, following your heart, that's brilliant.
0:41:01 > 0:41:07But the finances and that sort of feet on the ground stuff.
0:41:07 > 0:41:10I banked money ready cos I knew I was going to make this leap.
0:41:10 > 0:41:12So, I never touched that money.
0:41:12 > 0:41:14The business has done well enough, my wife works,
0:41:14 > 0:41:17so I've never have to touch the savings
0:41:17 > 0:41:19and the savings aren't doing well in the building society,
0:41:19 > 0:41:23so that was another impetus to do something better with that money
0:41:23 > 0:41:27for the future and pension funds and things like that.
0:41:27 > 0:41:29A shrewd move, I'd say.
0:41:29 > 0:41:34If Mark spends wisely on this project he could get a much better return
0:41:34 > 0:41:37on his investment than he would by putting his money in the bank.
0:41:37 > 0:41:41So, how much have you set aside to titivate?
0:41:41 > 0:41:43We we're talking £20, £40 for a couple of doors.
0:41:43 > 0:41:45I'm not sure how much the kitchen...
0:41:45 > 0:41:48I mean, whether we spend and put a new kitchen in,
0:41:48 > 0:41:51I mean, a new kitchen might cost us two or three grand.
0:41:51 > 0:41:55Whether we just get some new cupboard doors for a few hundred,
0:41:55 > 0:41:57I think the carpets just need cleaning.
0:41:57 > 0:41:59There's 50, 60 quid.
0:41:59 > 0:42:01£100 worth of paint.
0:42:01 > 0:42:05- 500 quid, all done.- I don't know what the boiler's going to be like.
0:42:05 > 0:42:07That could be biggie. It could be £1,000,
0:42:07 > 0:42:10£800, £1,000 for a boiler.
0:42:11 > 0:42:14Mark is planning to rent the property out.
0:42:14 > 0:42:17He will need to get a certified expert in to assess
0:42:17 > 0:42:19the boiler, but he and his wife are planning
0:42:19 > 0:42:22to do as much as possible of the basic renovations.
0:42:22 > 0:42:26He's set aside a one month timescale to turn it around
0:42:26 > 0:42:29and meantime he'll start advertising for tenants.
0:42:32 > 0:42:34£60, get on the internet and see how that goes,
0:42:34 > 0:42:38and maybe give that two or three weeks and during that time
0:42:38 > 0:42:42- we can get it decorated and the doors on and boiler serviced and.- People in it.
0:42:42 > 0:42:45- The job's a black pudding.- Yahoo! - Champo!
0:42:45 > 0:42:47- Well, congratulations. Good luck with it.- Thank you.
0:42:47 > 0:42:50- And here's to many more. - Come back when it's ready.
0:42:50 > 0:42:52- Good to meet you.- Next week!
0:42:56 > 0:42:59Well, a great little property for Mark
0:42:59 > 0:43:02to take on as his first investment project.
0:43:02 > 0:43:05He can't go wrong. The only thing I'm concerned about
0:43:05 > 0:43:08is whether or not he'll be tempted to redo that kitchen
0:43:08 > 0:43:11and it is going to take a long time to repay that
0:43:11 > 0:43:14in terms of the amount of extra rent he can get if he did it.
0:43:14 > 0:43:17You can find out what he decides to do later in the show.
0:43:20 > 0:43:23Well, you know what they say, time is money.
0:43:23 > 0:43:27So, have our brave buyers run out of both or are they bang on schedule?
0:43:27 > 0:43:29Let's go back and find out.
0:43:30 > 0:43:32Southsea in Portsmouth
0:43:32 > 0:43:36is an area that's become very popular with students
0:43:36 > 0:43:39at the nearby university who are looking to rent.
0:43:39 > 0:43:43That's something that 25-year-old property developer James
0:43:43 > 0:43:46knows only too well having studied here himself.
0:43:46 > 0:43:49So much so that since he left,
0:43:49 > 0:43:54he's bought no fewer than seven properties to rent out here.
0:43:54 > 0:43:55The latest is this house on Sutherland Road
0:43:55 > 0:44:00that he picked up at auction for 98,000.
0:44:00 > 0:44:04James planned to spend a further 15,000 turning this
0:44:04 > 0:44:08rundown two-bedroom mid-terrace house with signs of damp
0:44:08 > 0:44:11into a modern and comfortable four bedroom student let.
0:44:11 > 0:44:14With just a few months before the beginning of a new term
0:44:14 > 0:44:17to get it all done, did he manage that?
0:44:17 > 0:44:20And how just tight a squeeze is it?
0:44:22 > 0:44:25Well, it's been 12 weeks since I visited,
0:44:25 > 0:44:29so what's James achieved in that time?
0:44:29 > 0:44:32Well, we've had a total refurb.
0:44:32 > 0:44:35We had to sort the damp out, replaster all the walls,
0:44:35 > 0:44:37rewire the place, new central heating,
0:44:37 > 0:44:39did a bit of work on the garden.
0:44:39 > 0:44:42So, pretty much a major, major overhaul.
0:44:42 > 0:44:45We were trying to get away without doing the whole roof,
0:44:45 > 0:44:49but it sort of worked out that when we took the chimneys down
0:44:49 > 0:44:52it was better to replace the roof than try and patch it up
0:44:52 > 0:44:55because we would have had problems in the future.
0:44:55 > 0:44:58James is hoping that this place will be rented out to students
0:44:58 > 0:45:01on regular ten or 11 month contracts,
0:45:01 > 0:45:03so the last thing he would have needed
0:45:03 > 0:45:06would have been to replace the roof in between tenancies.
0:45:06 > 0:45:10Putting decking in the garden is also a wise idea
0:45:10 > 0:45:14when you have tenants as it's lower maintenance.
0:45:14 > 0:45:17Back inside and both front and back reception rooms have been
0:45:17 > 0:45:19converted into bedrooms,
0:45:19 > 0:45:23but how did James squeeze a kitchen and bathroom into the remaining space?
0:45:24 > 0:45:28We brought the bathroom upstairs, partly because we wanted
0:45:28 > 0:45:32to make four bedrooms so we had to move the bathroom from downstairs
0:45:32 > 0:45:34to get the lounge/diner.
0:45:34 > 0:45:37We took out the chimney breast from the back and front room
0:45:37 > 0:45:39just to make more space, really.
0:45:39 > 0:45:41And there was a wardrobe in both rooms.
0:45:41 > 0:45:45We knocked it through and made it into just the one room in the back,
0:45:45 > 0:45:48partly because this room was smaller, so we decided that we'd
0:45:48 > 0:45:52give them a larger wardrobe so all their storage area was in one place.
0:45:52 > 0:45:55Well, that back bedroom is a bit tight,
0:45:55 > 0:45:58but you can just about get a double bed in.
0:45:58 > 0:46:02And with four students all wanting to use the one bathroom,
0:46:02 > 0:46:05I hope everyone will make it to their lectures on time!
0:46:05 > 0:46:12But the layout does work, as James knows from trying it in his other properties.
0:46:12 > 0:46:15What about the kitchen and living areas?
0:46:18 > 0:46:21The first thing we had to do was we had to build a second skin
0:46:21 > 0:46:24because this was all single skin in this room.
0:46:24 > 0:46:26The bathroom was where I'm standing now.
0:46:26 > 0:46:29We decided to make it into a large kitchen/diner,
0:46:29 > 0:46:32so this is their sort of living and kitchen area all in one.
0:46:32 > 0:46:35We've done it in a house previously and it worked well.
0:46:35 > 0:46:38We went for the down lights because they don't cost too much
0:46:38 > 0:46:40and it makes the place look modern.
0:46:40 > 0:46:43We were going to get a second-hand kitchen,
0:46:43 > 0:46:45but there was a good deal on a DIY shop
0:46:45 > 0:46:48that they had a kitchen going cheap so we decided to buy it new.
0:46:48 > 0:46:52And also because the space was tight, we didn't want to have to compromise
0:46:52 > 0:46:55with smaller units or larger units that we didn't want.
0:46:55 > 0:46:57We want it to be just the right size.
0:46:57 > 0:47:00With a new kitchen and a new roof, too,
0:47:00 > 0:47:04has James managed to stick to his £15,000 budget?
0:47:04 > 0:47:06We went about 3,500 over,
0:47:06 > 0:47:12but I think our original budget of 15,000 was always a little bit unrealistic,
0:47:12 > 0:47:16so, yeah, about 18,5000 it turned out to be.
0:47:16 > 0:47:19As well as that 18,500,
0:47:19 > 0:47:24James also had to shell out a further £3,440
0:47:24 > 0:47:27to cover the seller's fees at auction
0:47:27 > 0:47:30and, of course, the 98 grand purchase price.
0:47:30 > 0:47:33That takes his total up to 120,000 for this property,
0:47:33 > 0:47:35but what's it worth as a four-bed rental?
0:47:43 > 0:47:45We invited two local estate agents along
0:47:45 > 0:47:48to find out how this place compares
0:47:48 > 0:47:50to similar student properties in the area.
0:47:52 > 0:47:54They are tried and tested.
0:47:54 > 0:47:55Personally I look at it and think,
0:47:55 > 0:47:58"Wow, that's tight, but they work, basically."
0:47:58 > 0:48:01They are successful in what they do.
0:48:01 > 0:48:02He's done a good job for student lets.
0:48:02 > 0:48:05I like the bedrooms are all double bedrooms,
0:48:05 > 0:48:08communal lounge could be a bit bigger,
0:48:08 > 0:48:11obviously with four students in one house,
0:48:11 > 0:48:14but he's got the space and that's all he can do with it.
0:48:14 > 0:48:17And the garden, you want to keep low maintenance for students.
0:48:19 > 0:48:22So, James has ticked all the right boxes with this house, but what sort
0:48:22 > 0:48:26of rent should he get from students and how
0:48:26 > 0:48:27does that compare to a family let?
0:48:29 > 0:48:32I think you're probably looking at rental value
0:48:32 > 0:48:35in that particular instance about 650, 700 maximum.
0:48:35 > 0:48:38Renting it to students is a completely different proposition.
0:48:38 > 0:48:41Rental value is probably 300 per month per student,
0:48:41 > 0:48:43could take it up to sort of, like, 1, 200.
0:48:43 > 0:48:46As a whole house you would get £650 per calendar month
0:48:46 > 0:48:49and for students you're looking at between
0:48:49 > 0:48:53£270 and £300 per person per calendar month.
0:48:53 > 0:48:56Yeah, certainly students, I think, well, we're getting 310 a room.
0:48:56 > 0:49:01About 300 is probably about right on average.
0:49:04 > 0:49:06On the strength of his other student rentals,
0:49:06 > 0:49:09James had let this property even before work began.
0:49:09 > 0:49:14That £310 per person, based on an 11 month rental,
0:49:14 > 0:49:19means that he will make a yield of just over 11%
0:49:19 > 0:49:22on his £120,000 investment.
0:49:22 > 0:49:24What would it be worth if he decided to sell?
0:49:24 > 0:49:27It would probably be sold with a tenant in situ,
0:49:27 > 0:49:30so you'd look at the rental figures that were coming in
0:49:30 > 0:49:32and work out a yield, that sort of thing.
0:49:32 > 0:49:35I think you'd be probably be looking at about £170,000
0:49:35 > 0:49:37in this particular marketplace.
0:49:37 > 0:49:40This property we'd market at £140,000
0:49:40 > 0:49:44with achieve to get about 135,000 to 140,000.
0:49:44 > 0:49:46140,000 to 170,000
0:49:46 > 0:49:53would give James somewhere between £20,000 and £50,000 pre tax profit.
0:49:53 > 0:49:55That's quite a wide range in valuation
0:49:55 > 0:49:57and he's playing it cautiously.
0:49:57 > 0:50:01I think 140 is pretty much the limit for these sort of houses.
0:50:01 > 0:50:04Even though it is bringing in a good revenue,
0:50:04 > 0:50:07I don't think anyone's going to pay an extra 30,000 on the asking price
0:50:07 > 0:50:11just for a rental income of 1,200.
0:50:11 > 0:50:13But, maybe! You know, it's good to know,
0:50:13 > 0:50:15but I think I'll be holding on to it
0:50:15 > 0:50:17and renting it for a few years anyway.
0:50:27 > 0:50:33Earlier in the show, I visited this two-bedroom terrace in Stanley near Durham.
0:50:33 > 0:50:37Freelance health consultant, Mark, bought it for £40,000 at auction.
0:50:37 > 0:50:39Well, I say that, but actually
0:50:39 > 0:50:42Mark wasn't even brave enough to bid on the phone for it!
0:50:42 > 0:50:45He got his brother-in-law to do it for him,
0:50:45 > 0:50:48and at £40,000, I reckon they bagged a bargain.
0:50:48 > 0:50:50But would he get carried away
0:50:50 > 0:50:53and spend too much on the few improvements that were needed?
0:50:53 > 0:50:56One month on and it's time to find out.
0:51:03 > 0:51:07Well, downstairs in the living room he's had very little to do.
0:51:07 > 0:51:11Two new doors at either end of the room mean that they now match
0:51:11 > 0:51:15and a new coat of paint does freshen the place up a bit.
0:51:15 > 0:51:19He was able to keep the existing carpet which was in pretty good shape.
0:51:22 > 0:51:25It was the kitchen that worried me a little, though.
0:51:25 > 0:51:28Would Mark go overboard with an expensive new one?
0:51:28 > 0:51:33So, this is where most of the expenditure was.
0:51:33 > 0:51:37Started off, I thought I'd just need to get a few doors
0:51:37 > 0:51:40and paid way over the odds for the doors.
0:51:40 > 0:51:42I started cleaning the kitchen,
0:51:42 > 0:51:46the hob and realised there was a few broken buttons and damaged seals
0:51:46 > 0:51:49so I started replacing that, and then it seemed like a good idea
0:51:49 > 0:51:52if I was going to replace that, the worktop was tired.
0:51:52 > 0:51:56Got a sink, didn't realise it was dented, but there you go,
0:51:56 > 0:51:58you learn by your mistakes!
0:51:58 > 0:52:01And the sort of prices started escalating from there,
0:52:01 > 0:52:03and then getting it tiled and etc.
0:52:03 > 0:52:07So, lost... Lost... Lost my way a little bit in the kitchen.
0:52:07 > 0:52:09Mark admits that he spent a bit too much in here,
0:52:09 > 0:52:13but at least he didn't go the whole hog and replace everything.
0:52:13 > 0:52:17Although he reckons that for the price he paid for the new doors
0:52:17 > 0:52:19he probably could have done!
0:52:19 > 0:52:22And it might have been good, once he started,
0:52:22 > 0:52:25to replace the cupboard doors under the sink, as well.
0:52:25 > 0:52:28Originally, Mark planned to do as much as possible himself,
0:52:28 > 0:52:31but he admits that when it comes to DIY
0:52:31 > 0:52:33he's not the most practical person.
0:52:33 > 0:52:37Luckily, though, people in the street came to his rescue.
0:52:37 > 0:52:39One of the neighbour's son is a builder
0:52:39 > 0:52:43and I started to get some prices of him and the prices were good
0:52:43 > 0:52:45and started doing some work and the work,
0:52:45 > 0:52:47you know, he's done's been really good,
0:52:47 > 0:52:50and he knew a plumber and he knew an electrician
0:52:50 > 0:52:53which allowed us to still have a few breaks away in the camper van,
0:52:53 > 0:52:56just touching base with him when the job was getting done
0:52:56 > 0:52:59and he's done a really good job and I'm very happy.
0:52:59 > 0:53:02It wasn't just the fact that he was doing the work,
0:53:02 > 0:53:05with his mother living so close and having the keys, you know,
0:53:05 > 0:53:07I felt that the house wasn't just standing empty.
0:53:07 > 0:53:09There was people that I knew now
0:53:09 > 0:53:11that are keeping an eye on the house for me,
0:53:11 > 0:53:13and it's very quiet here anyway,
0:53:13 > 0:53:15but at least all that worry's been taken away,
0:53:15 > 0:53:20so that's been an extra bonus and thank God the neighbours are really nice, as well.
0:53:20 > 0:53:25Local boy Mark really seems to have fallen on his feet here.
0:53:27 > 0:53:32Upstairs in the bedroom he, or rather Colin the builder,
0:53:32 > 0:53:34has fitted a new door and redecorated.
0:53:36 > 0:53:40And in the bathroom he's tied up a few loose ends.
0:53:40 > 0:53:45So, the bathroom, pretty much as you saw it last time.
0:53:45 > 0:53:48A little bit of plastic trim along the bottom
0:53:48 > 0:53:50and patching above the shower.
0:53:50 > 0:53:53Pretty much like the whole upstairs, not much to be done.
0:53:53 > 0:53:54£100 in here all in.
0:53:54 > 0:53:59So now the place is ready and Mark has put it on the rental market.
0:53:59 > 0:54:02But with so much property available locally
0:54:02 > 0:54:05he was slightly concerned about how quickly he could rent it out.
0:54:08 > 0:54:11But, once again, folks in the street may come to the rescue
0:54:11 > 0:54:13because the next door neighbour,
0:54:13 > 0:54:16who was about to move into another rental property,
0:54:16 > 0:54:17is having second thoughts.
0:54:17 > 0:54:22She came in after we'd all finished and she was saying, "Wow," you know,
0:54:22 > 0:54:25"Look at the transformation and, you know, this is going to be..."
0:54:25 > 0:54:28It's less than what she's going to be paying,
0:54:28 > 0:54:32she knows everyone in the street so she's thinking of moving in here.
0:54:34 > 0:54:37With his purchase price of 40,000
0:54:37 > 0:54:39and the few extra costs he's incurred,
0:54:39 > 0:54:44Mark reckons he's ended up spending around £45,000 in total.
0:54:46 > 0:54:51He hopes to rent this place out for about £350 per calendar month.
0:54:51 > 0:54:55That would be around a 9% return on his investment,
0:54:55 > 0:54:57but is it realistic?
0:55:00 > 0:55:04To find out we invited a local estate agent back
0:55:04 > 0:55:06to give this place the once over.
0:55:06 > 0:55:09It has been quite a simple job for the owner.
0:55:09 > 0:55:13I think he picked perhaps a bit of a bargain at the auction.
0:55:13 > 0:55:16There wasn't a great deal required in the first place,
0:55:16 > 0:55:19but he has just freshened it up with a bit of redecoration
0:55:19 > 0:55:21and some improvements to the kitchen
0:55:21 > 0:55:24and I think, in the current market, it's the right way to go.
0:55:24 > 0:55:27It's quite a competitive rental market here in Stanley.
0:55:27 > 0:55:31I think, realistically, we could look at letting the property
0:55:31 > 0:55:33for £350 per calendar month.
0:55:33 > 0:55:35I think there's a very good chance of finding a tenant
0:55:35 > 0:55:37fairly quickly at that level.
0:55:38 > 0:55:42Good news for Mark who seems to have got his target figure spot on.
0:55:42 > 0:55:45I think there's a glut at the moment.
0:55:45 > 0:55:49I think that's maybe where my brother-in-law was wrong.
0:55:49 > 0:55:50I think he said maybe the 400,
0:55:50 > 0:55:54but, I think, when I look at what's for rent in this area
0:55:54 > 0:55:58there's an awful lot seems to have appeared in the last month or two.
0:55:59 > 0:56:04Sensibly, Mark is looking at this as a long term investment,
0:56:04 > 0:56:09but as he bought it for just £40,000 and spent only £5,000 more on it,
0:56:09 > 0:56:13there could be profit to be made from selling it.
0:56:13 > 0:56:18The current value would be in the region of 55,000 to 60,000.
0:56:18 > 0:56:21My advice would be, if he were to sell the property,
0:56:21 > 0:56:22to market it at 59,950.
0:56:26 > 0:56:28If he decided to sell,
0:56:28 > 0:56:32Mark could make a £10,000 to £15,000 pre tax profit.
0:56:32 > 0:56:35Not bad, and definitely something he's keen to repeat.
0:56:35 > 0:56:39It might even be enough to entice Mark himself into the auction room,
0:56:39 > 0:56:42but would he ever be brave enough to bid?
0:56:42 > 0:56:45Ummm... I'd think about it.
0:56:45 > 0:56:47THEY LAUGH
0:56:47 > 0:56:51I might use my brother-in-law's professional services again!
0:56:54 > 0:56:57Well, we hope you've enjoyed today's trio of properties.
0:56:57 > 0:57:00We'll see you again soon for more Homes Under The Hammer.
0:57:00 > 0:57:01- Goodbye.- Goodbye.
0:57:10 > 0:57:13Subtitles by Red Bee Media Ltd
0:57:13 > 0:57:17E-mail subtitling@bbc.co.uk