Episode 69 Homes Under the Hammer

-Hello!

-Home is where the heart is, they say, but is your heart in buying a property at auction?

Let's find out who put their heart and soul into buying Homes Under The Hammer.

Buying a property at auction can be a road to success, but there are also risks involved.

Yes, even experienced developers can get it wrong. So what got people interested at the auctions today?

I'm in Wiltshire, giving you my slant on this curious property.

Doorframe - completely wonky.

This house in Cornwall looks like a beauty, but there's a beast within.

Could these be the scrapings of the Beast of Bodmin Moor?

And this terraced house in Tooting, London, has a teeny tiny bedroom.

This is how small it is. I can almost touch the walls.

All these properties have been sold at auction and we'll find out who bought them and what they paid

when they went under the hammer.

Welcome to Warminster in Wiltshire on this rather cold and misty winter morning.

# Baby, it's cold outside

# Out here in the rain... #

I'm here to see this town centre shop. It's got a three-bedroom flat above, it's Grade 2-listed

and it went to auction with a guide price of £100,000, but before we look inside...

I've spotted a pretty nasty crack up there. It's a very old building and it could be nothing to worry about,

but I would definitely want that checked out by an expert.

Already the alarm bells are ringing with this property.

Let's start by looking at the shop before the flat above.

# Sure looks warm inside Through the window pane... #

The shop has a floor area of 640 square feet.

It's vacant at present, but was occupied until recently,

earning an income of £4,500 a year.

In the past, it's been home to a clothes shop, a computer shop,

and most recently they sold sandbag filling devices for flood defence,

so quite a varied life. It's also in a pretty central location. You've got the town just there.

So you should get some passing trade, but one big disadvantage here is no car parking for customers

immediately outside.

The shop has a wide range of occupants, but I still think it's got great potential

as it's in a central location.

At the rear is the back door, which is also the entrance to the residential property above.

Unfortunately, to get access to the door and entry to the flat,

you have to walk down this rather narrow, dark alleyway.

So let's take a look at this three-bedroomed flat.

They're quite steep stairs, but here we have the living quarters.

Quite disappointing. Got a bit of a shabby feel. It needs upgrading.

This kitchen, for starters. Although you have got a pretty window with views over the rooftops.

I think the kitchen needs to be replaced and the layout changed.

And here's the first internal sign of structural damage -

the sloping doorway which leads to the sitting room.

For a Grade 2-listed property, I've not seen any of the period features I would expect.

Let's head on up another set of steep stairs.

Up here on the second floor is one of the bedrooms. A couple of things you need to think about.

This wall is damp to the touch.

Look. You can see there's just plaster falling away behind there.

I expect it's possibly something to do with the guttering, so that needs to be looked at.

And have a look over here.

Look, the doorframe - completely wonky.

This whole property definitely feels like it's on a bit of a slant.

Coupled with that huge crack on the front, it's a house where I would definitely recommend a full survey.

There are more interesting angles in the master bedroom.

Whoever bought it will have to learn to love its slopes and slants.

The cost versus return and planning permission needed for a listed property makes the expense

of straightening it up prohibitive.

Lastly on this floor is the bathroom, before I tackle one more flight of stairs.

Now this is where it gets rather interesting!

You've got real steep access into this room. No handrail.

So potentially it could be quite dangerous, but there is enough head height up here in this attic.

A few more character features than the rest of the building.

You could get a double bed in there, but this makes me laugh.

This does a good job for the bathroom, letting light in.

But this is glass, it's probably dangerous. I'd definitely get that sorted out.

You could use this as a bedroom, but it's good for storage. Really, what you've got is a bonus room.

The guide price for this residential and commercial property was £100,000.

I asked a local estate agent to give me some background on it.

'The rentals achieved on the property were, for the flat, round about £550 per calendar month.

'And for the ground floor shop, £4,500 a year. Once it has been'

renovated, you might get a touch more and achieve closer to £575 per calendar month

or £600 per calendar month. The ground floor shop, it will probably not make much difference.

'And the sale value?'

On the commercial shop downstairs, I would expect to achieve in the region of £50,000-£60,000.

For the flat upstairs, I would expect, once renovated, in the region of £110,000.

In today's difficult economic climate, it may be tricky finding a tenant for this shop.

There are a few empty units along the high street.

There's also that crack to think about. So who was brave enough to bid for this one? Let's find out.

Start me at the guide price. £100,000. 80, then. At £80,000.

I'm selling at £80,000. 82. At 82,000. Against you in the middle at 84.

86. 88. 90, may I say?

At £88,000. Still cheap. I'll take 9 if you like. 89.

90? 90. 91, sir?

91, OK. £91,000.

It's against you at the back again. It's going to be sold.

£91,000 for the first time. £91,000 for the second time.

Sat down. 91, third and last time.

With a successful bid of £91,000, the buyers were Steven and Rachel.

30-year-old Steven is a graphic designer and 23-year-old Rachel works in finance.

Guys, congratulations.

-Thank you.

-£91,000!

-I know.

-Guide price 100. You did very well, didn't you?

-Really good.

We thought it would go for a lot more. Really pleased.

-What was your upper limit?

-Mine was different to Rachel's.

-Mine was £115,000. Rachel's was a little bit more.

-A little more.

-So how much would you have paid?

I don't know if Steve would let me go much further. That's why he bid.

'There can be many unforeseen challenges when renovating,

'but this couple have previously bought and renovated a listed building as their home.'

We bought an old telephone exchange about three years ago. We've built an extension on that.

And there was enough equity to remortgage and pay for this.

-So where did you buy this old telephone exchange?

-At auction.

We actually got it for £60,000, but we didn't have planning permission.

-That's why it went so cheap. So...

-And because of that you have some money left over

-to invest in this.

-Yeah.

-What are you going to do with this shop and flat?

The priority is to get the flat up to scratch, do the kitchen, let it out.

-Once we've got it let out, we'll decide about the shop.

-So there's no business in mind?

I've always wanted to have a shop and one weekend my dad looked in the paper, saw this shop,

and said, "Do you fancy buying that?" And I said, "Yeah, cool!"

Then I thought, "We will go and have a look at it." Then, "We'll go to the auction."

-Now I've got the shop I always wanted!

-So what have you always dreamed of?

I've always wanted... Like every young girl I like shopping and would like a clothes shop,

but I've got to think a bit practical now whether we maybe delay that, have people rent it,

or whether I can afford to jump straight in. We'll see.

'This investment could be Rachel's dream come true.

'Let's hope the structural damage doesn't turn her dream into a nightmare.'

-How much research did you do into this building?

-We managed to get hold of the structural survey,

which seemed all OK. There's been movement over the years,

-but it's from quite a few years ago. So that's about it, really.

-The most we could do in the time.

-We had three days to do any research.

-And we were working.

We didn't look at it until the day before the auction, so we didn't have a lot of time.

-How much are you planning on spending inside?

-How much?

I think we're looking at a budget of about £10,000 to actually get it up and get it let out.

That's really on the flat itself. The shop we'll worry about after.

-Guys, I'm so excited for you both. Well done.

-Thank you.

-Congratulations.

-Thank you.

This is Rachel and Steven's first investment property and it could mark a complete change of career,

with the opportunity to open a clothes shop for Rachel.

So when we come back, will Rachel have taken the plunge and started her new business?

Or will they opt to play safe and rent both properties out? Find out later in the programme.

The wild and windswept area of Bodmin Moor,

where tales have been told of livestock being hunted by a fierce creature,

the Beast of Bodmin Moor!

Luckily for me, I'm safe and sound in Upton Cross on the edge of the moor.

The property I'm here to see is on this little housing estate built in the 1970s.

It's a linked detached, which means linked by a garage.

It's got a garage and parking. The guide price was £75,000. Let's see what you got for that.

From the outside, this house appears to be in reasonable condition.

With all this rain, I certainly hope the roof doesn't need to be repaired.

Okey-dokey. What is on offer?

Into an entrance hall here, stairs up to the bedrooms, very small kitchen I can see,

but it gets better when you come in to the living room area. Open-plan. Love that.

A little log burner. Get that checked out that it works properly.

Then big patio doors out onto a reasonable looking garden.

Beautiful camellia. Not a bad start.

With a lot of work, but not so much money, this garden could be

a real selling point for what seems a fairly standard house.

Judging by the numerous kennels, animals were kept here previously.

Hopefully, they were more cuddly Collies than Beasts of Bodmin.

This open-plan stairway is very '70s, don't you know.

Up here we've got a bathroom and loo. That's pretty good news.

Blimey - what's that?!

Could they be the scrapings of the Beast of Bodmin Moor?

Arr! Probably just the paint getting a bit old.

Actually, do you know what? That is a bit more serious. Looks like some water ingress.

Could be the roof leaking or if there's a tank up there, water leaking from that.

I don't know about a beast, but that's fairly beastly.

There are also two bedrooms on this floor, both in need of redecorating.

I'd also recommend a new bathroom. Coloured suites are sometimes tipped to come back into fashion,

but unless you want to scare off potential buyers, stick with white.

The guide price for this house was £75,000.

I asked the auctioneer who sold it for his opinion.

This house, tucked away in a close,

is really quite pleasant. It's got a nice ratio

of garden to a two-bedroomed house.

So, actually, I think the major amount of value is creatable outdoors above indoors.

It's a dog-friendly garden. It needs to be human-friendly

with terracing and lawns and so on. It's a lot bigger than it looks.

If renovated and rented out, how much could it earn?

'The rental value per month is going to be in the region of £525.'

Probably not quite £550.

And the sale value once renovated?

When the property is in apple pie order, the value would be in the region of £134,950,

or thereabouts.

So a few damp issues to sort out upstairs, but a good little property

that for anything like the guide price is a great investment.

Let's see who spotted it when it went under the hammer.

So...

three folk on the phones. Guide 75, then.

Not going to go for less than 75. 75, good. 78. Do I see 80?

80. And 2 somewhere here?

Bring you into it? 80 I've got. 80 in the room.

82. 82. 84. 84 in the room. 86.

86, new face. Back to you, sir?

86 is stood. 86 I've got. 88.

At 88. 89?

89. 89. 90.

A half? 90 and a half, thank you. 91, got it.

At 91, you're in, sir. At the back.

91 and a half. 92. 92.

92 and a half. Are you a cluster of three? You are? OK.

92 and a half, then.

93. At 93. Half.

At 93... 94.

94 and a half. 95.

95... 95 and a half.

Looking at the phones. 96 and a half is here. 97.

At 97. At 97.

At 97. At 97. 97 and a half. 97 and a half.

Give it a good go. 97 and a half.

98. 98 and a half. 99.

At 99. It is a lot easier to work out the commission on 100, sir.

You happy with that? 100 I've got.

At one. At one I've got.

At one for the first time.

At one for... One and a half.

Sorry. As you were. One and a half I've got.

At one and a half. Once.

At one and a half, at the back, twice. At one and a half -

will we ever know? Last chance.

One. At 101, first time.

101, second time. At 101, sure and done. Now it's going to go.

At 101 and out.

For £101,000, Moss and his wife Ann were the successful bidders.

Moss, a recently retired production engineer, and Ann had moved from their West Midlands home

to the southwest to enjoy their retirement.

-Ann, Moss, lovely to meet you both. Congratulations.

-Thank you.

Tell me why you wanted this place.

We needed somewhere to put the cash from the house that we sold up in the West Midlands.

-Right.

-And this seemed a better place than the bank at the moment.

-So it's an investment property.

-Potentially, yes.

-Or what else?

-We move in and wait for things to move up a little.

-OK.

-So what made you move down to Cornwall?

-We used to come on holiday every year, so we like it.

The kids have left home now so it's our time.

The couple are renting a property in Devon

and had been attending property auctions in search of Ann's dream home.

I promised her a period property, not much to do and a sea view.

So I haven't scored on any of those yet!

Right. So apart from not ticking all those boxes, what was it here that you liked?

The valuation, to be fair. It was within our budget

and we thought that we couldn't go too far wrong with it,

us being virgins in doing reconstructions of houses.

-Right. So what tempted you into this?

-Watching the programme.

-Your programme.

-Oh, great.

-Big fans since 2003.

-Since we started. Wow, seven years ago.

-Yeah.

-Fantastic. So seven years on, you decided to take the leap.

-Yes, absolutely.

-What budget have you put aside?

We've got £15,000 put on one side for it.

-Hopefully, that will give us the sort of property people will admire.

-What timescale have you got for it?

We have to leave our rented accommodation in about two months so that's the timescale.

-That should be all right.

-I'm hoping so.

-You can dedicate yourself to this full-time.

-Yes, yes.

-So what are you going to do to it?

-Kitchen, bathroom,

get the damp problem sorted out upstairs. Looks like the guttering needs attention outside.

-Who will undertake the work?

-Professionals for plumbing and electrics, someone who likes ladders

-and the rest is mine.

-Do you not like climbing ladders?

-Er, no.

But what about that garden, which was highlighted as an area that could,

once landscaped, increase the value of their property? And, of course, that lovely camellia?

Are you keen gardeners?

-Ann is.

-Yeah, I'll go in there.

-You've got a lovely camellia.

-I think the camellia might be going.

No!

-Well, it's just a little close to the house.

-They don't cause problems.

-I'll take your advice.

-It's beautiful! Why chop that down?!

-We'll try to replant it.

You might be able to. Good luck with your new life and new home.

-I'm glad that we inspired you.

-Thank you.

-Thank you.

It's all change for Moss and Ann in their new Cornish home.

Will they manage to get it completed in that two and a half months?

And will the camellia bush survive? Find out later in the show.

Still to come: I'm all for open-plan living, but in this London terrace...

I'm not sure if it's too big or not!

And I fear the worst for my favourite feature at this Cornwall house.

It ended up in our fire.

But first we return to Wiltshire to see if Steven and Rachel combined working full-time

with renovating this property.

It's a big challenge. A lot of hard work, a lot of late nights.

It was a cold and frosty morning when we last visited this property in Warminster, Wiltshire.

It was a commercial unit with a three-bedroomed flat above, spread over three floors.

Historic subsidence had caused rather odd, curious angles.

One of the bedrooms was this quirky attic conversion.

The property was purchased for £91,000

by graphic designer Steven and Rachel, who works in finance.

For her, it could be a dream come true.

I've always sort of wanted... Like every young girl, I like shopping, so having a clothes shop.

So has Rachel's passion for fashion materialised in her own shop?

# We are living in a material world And I am a material girl... #

We're back after six months to see if Rachel's dreams have become reality or she took a reality check.

# A material...a material

# Girl Living in a material world... #

Practicality took precedence over passion.

The shop, even though a couple of weeks from completion, has been let to a tattoo parlour.

I still hope one day to have something. It would have been ideal,

but to get people in and get the rent, we've been practical. But I still have hopes for the future.

We've spent quite a lot of time doing the shop.

They've done a lot of the work themselves to help us out.

We've really concentrated on the flat for the last few months.

Hopefully, the tenants in the shop will be in in a couple of weeks.

Let's find out what's been happening in the flat.

The once-shabby kitchen has been given a much-needed makeover.

# Totally make me over! Make me over

# I wanna be made over I wanna be made over... #

We've completely redone the kitchen.

We've gone for both sides, rather than just one before. Black gloss, classy-looking, modern.

We could have gone for a cheaper one, but we wanted the look right.

Something I would like to live with. We had to completely redo it.

Floor's new. It really complemented the units and that.

Really happy with the kitchen. It'll be the main room of the house, somewhere to prepare a nice meal.

The kitchen is now stylish and chic.

Let's take a look at the living room. The off-putting green colour has been replaced

by warm and welcoming colours.

Despite this youthful makeover, this 100-year-old property still reveals the odd wrinkle.

Onwards and upwards to the second floor.

The once drab and dingy master bedroom is now light and bright.

But the main worry was always the second bedroom, which was riddled with damp.

We've done a lot of work in this room. Originally, there was a lot of damp coming from this wall.

We thought the problem was the external wall, but it wasn't.

It was coming in from the roof. A lot got spent on that.

But in this room we've replastered completely. The beam's higher, so I can walk under it.

We've recarpeted, repainted. It's just a brand new room, so we're very happy with this room.

The roof repairs meant the couple's £10,000 budget had to be revised rapidly.

We've gone over the £10,000. We're probably up to £15,000.

We've still got some to spend, so it's been quite tight.

Obviously, the roof was the major problem area. It cost around £5,000 just to sort that out.

It's been doable. It's just been hard work.

But we scraped it together, so we should be able to finish off just fine.

The attic conversion certainly had character.

Steven and Rachel added a second window, bringing natural light into the kooky, but cosy corners.

They have removed the skylight and expect to complete the work in here in three weeks,

putting them six months behind schedule.

It has been hard trying to find the time to do this. Both of us work full-time.

Steve's dad's had the most input. It wouldn't have been possible without him, so big thanks there.

It's a lot of hard work, a lot of late nights. We've been quite tired, but all worthwhile.

We invited two local estate agents to give us their opinion on Rachel and Steven's hard work.

I'm very impressed with what they've done. It's not dramatic,

but it's very nice, very clean and they've done everything I'd expect.

It's very good. They've done a very nice job, particularly the kitchen.

The top floor is particularly nice. It's got lots of character.

Rachel and Steven will have spent around £20,000 when they finish the renovation,

making their total outlay approximately 110 grand.

The shop is already being rented out for £550 per calendar month,

which the estate agents agree is a good income. What could the flat be rented out for?

For the flat upstairs,

I'd expect to achieve a rental in the region of £550 per calendar month.

If you were letting the flat, I would recommend an asking price around £450 per calendar month.

Those figures, along with the rent for the shop, would give them an impressive 11-12% yield.

What would the sell-on valuations be?

On the shop, I'd expect to get more than £60,000, probably not much more than £70,000.

For the flat, I'd expect to achieve somewhere between £115,000 and £125,000.

That's a combined value of £175,000-£195,000, if sold separately,

but what if the property was marketed as a whole?

We have a real problem with the sale of flats over shops presently.

Mortgages are almost impossible to get. I would suggest to quote an asking price of £130,000.

Quite a difference in valuations.

Those figures mean the couple could make a pre-tax profit of between £20,000 and £85,000.

Even if it's only worth the lower amount, and I'm hoping it's worth more towards the higher one,

the fact we'd be renting it and getting an income for a few years,

-it's been well worthwhile doing.

-What's the future for Rachel's fashion boutique?

Well, you know, never say never. I'm working full-time at the moment,

but it's still a little pipe dream. I've not closed the door on it yet.

# We're living in a material world. #

Tooting in southwest London is undergoing regeneration,

which is encouraging an influx of new shops and residents to the area.

You could say Tooting is tooting its own horn.

The property I'm here to see is this white, three-bedroomed terrace.

It had an auction guide price of £250,000. In 2007, before the downturn in property values,

a similar house on this street sold for 330 grand.

This one's near one of London's largest hospitals

and staff based there are a very useful resource for rentals.

The first thing that hits me when I walk in here is how spacious it is!

Think about it. This is a Victorian villa.

I'd expect a wall here, a bit of a dark space, a room here,

a wall going off here, but somebody's taken the time to really open this place up.

You've got a big arch, an archway leading to the stairs,

some nice wooden flooring. I'm not sure if I'd think about putting one of these rooms back

because this is a huge space. I'm just not sure whether it's too big or not.

Let's have a look through here.

Well, what a great surprise.

Again, you've got an incredible space in here, but something that does make me laugh a bit

is the mock Tudor beams.

What I think has happened is this one here is boxing in an RSJ

and they've taken a bit of inspiration from that and decided to go a bit haywire.

It's lots of different eras. You've got green '80s tiles, mixed with quite modern units.

It kind of clashes a bit and it's not really working, so this kitchen needs an overhaul,

but the space is good, the light is good, so it could work well

but with a bit of time and money spent on it.

The clash of styles isn't working. How should we solve this kitchen crisis?

# Rip it up and start again

# Rip it up and start again... #

And when you've finished ripping up the kitchen, it's time to start clearing up the garden

or head on up top.

I think we've established this house feels spacious, there's loads of natural light.

Even up there - look. There's a skylight with natural daylight. I love to see that.

And on the half landing we've got the bathroom with tongue and groove woodwork. A few issues to address,

but it is a very good size.

And then up here we've got three bedrooms. Now, two really good-sized doubles

and a very, very small single. This is how small it is, look.

I can almost touch the walls. Now you could get rid of these and open this space up.

Do we want three bedrooms here? Well, the answer is, I think, yes.

It's great letting potential, a hospital just up the road,

fantastic to let to doctors and nurses. It offers another bedroom.

So I think this property ticks all the boxes.

With this property, I've got my eye on the rental returns.

Even a small bedroom like this in the right market will rent for the right price.

The master bedroom has similar fitted wardrobes. I'd remove them and go for a clean, bright finish.

The dated dark wood design continues in the second bedroom.

The guide price for this property was £250,000.

I asked a local estate agent to give us the lowdown on this area.

Tooting's a fabulous area. Tooting High Street

is very good for restaurants.

It's very popular for value for money.

We're seeing a lot of families coming in to the Tooting area.

It's good for buying and selling because of the hospital.

When renovated, what could the market value be?

'Similar properties to this in the local area, you're looking at an asking price

'of £340,000-£350,000. Realistically speaking,'

the prices to achieve on something like this will be around about £320,000-£330,000.

Obviously it's going to depend on the finish of the property.

And if the house was rented out?

Something like this, you'd be looking around about £1,200-£1,300 per calendar month.

The third bedroom is on the small side, but the rental market is extremely strong here.

It's going to need a bit of work, but once complete, this is a fantastic investment opportunity

IF you get it for the right price. Let's find out who wanted it.

Who'd like to start on this? I don't know...300?

300?

Start the other way. 250, then.

250. 255 with another lady. 260.

265? 265.

270.

275. 280.

285. 290?

290? Anywhere else?

28... 290? Yeah?

300. 301?

301. 302, sir?

305. 306?

305, first time.

Second time. Third and last time. All done? Sold.

305. Well bid.

With his successful bid of £305,000, it was John who bought it.

He paid a whopping 55 grand over the guide price.

He works in marketing, but has recently tried property developing.

This will be his second investment purchase.

John, congratulations.

-Well done.

-Nice to meet you.

-How was the auction for you?

-Panic, panic.

-Why?

-Because I didn't really plan to buy this one. I had seen it.

But I saw a few that day and I went to go for a flat, actually.

-Yeah.

-And I didn't get it. So panic set in. I'd been to auctions before and was always second bidder.

So I'd missed out on a couple and I thought, "I've got to buy something!"

-So, kind of, here I am.

-How are you going to learn to control yourself

-in terms of going to auctions?

-I've learned!

-Spending your money, overspending...!

-What are you playing at?

-I did one auction property before and I kind of got it right,

-so I got a bit full of myself.

-Did you?

-I was overly confident! Tooting's not in my comfort zone.

I didn't know the area that well. I did a bit of research, but the roads vary

from road to road. If I'd bought round the corner, I'd be quids in.

But because I'm on this road, a main road by a junction, it hasn't got the value of round the corner.

So I did some research, but I've got to do more next time.

And learn from it. It's a bit of a painful mistake,

-but I won't do it again!

-So when you first looked at this property, what did you like about it?

Not a lot, to be honest. If I'm really honest, I didn't.

It's OK. Location, actually.

It's right next to a hospital, so for letting it's a winner.

My immediate thing was to do it up and flip it, but I don't think I'll get anything out of that,

so it's long term.

Flipping this property, meaning doing it up quickly and selling on, won't make John much profit,

bearing in mind the cost of renovations and his £305,000 price.

That means the cupboard is almost bare in terms of paying for work.

-So what sort of budget have you got to spend on this?

-Well, I haven't got any budget now! I've blown it.

I really don't want to spend much over £10,000. There's no real structural work.

Just new kitchen, new bathroom and partition walls.

And then a good paint, skimming the walls. And we'll take it from there.

-What about that nice pink wall at the front?

-I think I might paint the whole house pink.

-Stop it! What colour can we expect this house to be painted?

-It'll just be neutral colours.

-Rebuild that wall.

-And are you going to be doing this work?

-God, no.

I've got a good set of builders. They can turn a place over for me.

I'm happy to demolish. I like that bit, but don't get me doing anything crafty. It's not going to work.

It's going to look hideous.

They're really busy guys as well. We're going to schedule when they can start work.

I'm hoping as soon as next week. They'll start cracking the whip.

Hopefully, they'll turn it round within a matter of weeks.

John's right to get this onto the rental market as soon as possible,

turning it from money pit to money maker.

He'll need to keep that positive attitude if he's going to turn it around on schedule.

# We've got to stay positive

# We gotta stay positive... #

-I want to see you make a success of this.

-Thank you.

-And I'm desperate to see it with these beams down!

Give this house a personality. It's a mish-mash.

-It's been lovely meeting you.

-And you.

-And good luck. Well done.

Poor old John. Auction fever certainly got the better of him

and he paid well over the odds. It's a lesson to you all -

sticking to budgets is crucial if you want to succeed at this.

The big question now is will he stick to his £10,000 budget?

And will this wall remain pink?

You can find out how John gets on later on in the programme.

Buying your property for the right price is the first step to success.

But the next step is just as important - sticking to timescales and budgets is the only way

-to a decent profit.

-Let's see how our purchasers are progressing.

Let's head back to Cornwall

where, on a wet and windy day, I met recently-retired production engineer Moss and his wife Ann.

The couple had moved to the southwest from the Midlands

and Moss had promised Ann her dream home.

I promised her a period property,

not much to do and a sea view.

So I haven't scored on any of those yet!

So the purchase of this 1970s, two-bedroomed house for £101,000

wasn't quite what Ann had in mind.

But it would allow Moss to try his hand at house renovation

to see if a new career in property development beckoned.

Six months later, we're back.

The weather has brightened up and so has the exterior of the house.

Let's take a look at the interior.

The kitchen has been transformed with the '70s style banished forever.

There are still a couple of finishing touches to do, but the work looks top quality so far.

Once the plumber had plumbed us in, I put the units together

and worktops and whatever else. We're now in the process of tiling and painting.

Their living area is very much still a work in progress

as Moss has been using it as a workroom.

He has installed a new wood burner, which adds some real rural charm to this modern house.

When we came, I tried to light a fire in the existing wood burner

and soon found that the top was cracked. So after clearing the smoke from the living room,

we decided we'd replace the wood burner itself.

The people replacing it for us said that the stack was not, in fact, up to the present specification.

So we had to replace the stack and the wood burner in one go.

The cluttered garden has been cleared, revealing its true size.

This type of house is fairly standard for this area,

but the garden has blossomed into a distinguishing feature.

We had loads of trees chopped down. Somebody came to do them

and we did the rest ourselves. We chopped lots of stuff down.

-Still needs plenty of work, though. That's your job.

-My job.

And what about that beautiful camelliaI was so fond of?

That was one of the first things that was taken away.

I think it ended up in our fire.

# Oh, Camellia

# Won't you take me away... #

Oh, Moss! How could you?

Anyway, let's take a look upstairs.

The bedrooms have been redecorated in warm, cosy colours.

The couple have replaced the doors and hung feature wallpaper.

The bedrooms were riddled with damp, a problem trickier to solve than first thought.

Effectively, we've had to replace whole walls just to get rid of the damp.

We're still suffering with some damp. We replaced the ceilings.

All of the ceilings. New plasterboard plastered over.

We've struggled along, haven't we?

In the bathroom, Moss has removed the multi-coloured bathroom suite

and replaced it with a modern P-shaped bath and matching sink and toilet.

There's still a lot of work to do, but the couple have recently moved from their rented accommodation

and into their new property.

They hope living and working here will speed up the renovation.

We've been in the property six weeks.

Prior to that, I was travelling on a daily basis

from Devon, which is a 140-mile round trip.

-So that was tiring us out, wasn't it?

-Yeah.

-You camped a few times.

-Yes, I did.

-I wouldn't camp!

Their original two and a half month schedule has long since passed.

But have they kept to their £15,000 budget?

We've overspent now by about £3,000,

but I think we've got everything in place. We haven't got to spend any more,

other than carpeting the lounge.

So, you know, if we're £3,500 or £4,000 over the top,

that wouldn't worry me unduly.

Moss and Ann's projected total outlay on this house is £120,000.

We asked two local property experts for their opinion.

The biggest selling point

for the house, without a shadow of a doubt, is the garden.

It's really bug, quite mature, lots of trees and things for nooks and crannies.

As you approach from the front, it looks like it could be just an ordinary house in a close,

but it's far from it.

The rear garden is a good asset. It's a nice size,

it's fairly level, flat. It's obviously safe if you have children, it's quite secure.

What do the experts believe this property could achieve if rented out?

Rental, per calendar month, is going to push on towards £600, but probably not quite.

A rental figure for a property such as this would be in the region of around £550 per calendar month.

And the sell on value, bearing in mind Moss and Ann's total outlay of £120,000?

The value of the property when it is in absolutely apple pie order would be in the region of £140,000.

The resale value of the property once completed will be in the region of £140,000-£145,000.

-Cor!

-Gosh.

-That's a lot more than we thought.

-That's great news, yeah.

-That's good.

-The whole idea was for us not to lose money, but if we can make a bit, even better.

So what's the plan for Moss's property developing future?

-And will Ann forget her period property by the sea?

-We'll live here for 2 or 3 years,

but try to find somewhere, maybe at auction again.

-It would be nice to get the house that you deserve, dear.

-Yeah.

-Yes.

Yes.

Let's return to Tooting in London where I met John who works in marketing.

He had aspirations to be a full-time property developer and purchased this three-bedroom terrace

initially hoping to do it up quickly and sell on.

John's high purchase price of £305,000 left only the narrowest of margins to turn a profit.

Why did this would-be developer pay so much?

-So how was the auction for you?

-Panic set in!

I'd been to a couple of auctions and missed out on a couple.

I got to the point, "I've got to buy something!" So here I am, here we are.

Nearby St George's Hospital is one of London's largest,

so a ready-made market for tenants. The property had three bedrooms - two doubles and a very small single.

There's also a good-sized bathroom.

And downstairs there's a large, open-plan, living/dining area

and, of course, that lovely mock Tudor kitchen!

Three months later, we came back.

The front wall has been rebuilt and is thankfully no longer pink!

Like the rest of the exterior, it's been brightened up with a new coat of white paint.

The mock Tudor kitchen is no more.

John has replaced the dated decor with clean, crisp, white units and tiles.

The open-plan living area has been divided back into two rooms.

The room at the rear will now be a communal living/ dining room leading into the new kitchen.

What we've done, we've opened up this area, this slightly wider doorway.

It lets some more light in, back into this room here.

We've got an L-shaped kitchen here, glossy white to reflect the light as much as possible.

And we've got a roof light to let in some extra light to flood back in.

And we've opened up the space here. There was an old serving hatch that's now a doorway

to create more sense of an open kitchen/lounge area.

The room on the other side of the partition wall will be a bedroom.

John is wisely maximising his rental returns. He's already let the property out to four people.

I've got four trainee doctors going to be moving in very shortly.

That's bang on what I wanted, so I'm really pleased.

I'm getting £1,500 a month so that's 18 grand a year. I'm quite happy.

John's cleaning up with rental income with his student doctors.

Let's give upstairs a check-up.

The three bedrooms all had floor-to-ceiling fitted wardrobes.

John's removed them, replastered the walls and ceilings and painted each room.

Yes, you've guessed it - it's clinical white.

He has new bedroom furniture ready to be assembled.

He still has plenty of work to do in the bathroom.

What we've done with the upstairs is we've kept the same configuration of three bedrooms and one bathroom.

We thought about moving the bathroom into this small room. It would have seemed to make sense.

It would free up another double bedroom, but getting the services into the front - drainage, sewerage,

plumbing - is a bit of a no go.

John's original budget was £10,000. Has he managed to keep to that?

I was hoping to spend 10 grand, but I didn't. I'm nearer £20,000.

But considering we've overhauled the whole of the property, for £20,000 we've done really well.

That includes fittings for the kitchen and me buying furniture.

John purchased the property for £305,000 and has spent 20 grand on the renovation.

After three months, have his alterations had any impact on the value here?

Let's hear from two local estate agents.

First impressions, it's good.

However, some aspects of the work could be better, the finishing.

However, for the rental purpose, the finish is fine.

The open plan kitchen/diner works very well.

Accommodation such as this needs an area for everybody

to come into and use as a communal part. It works very, very well.

The estate agents agree that John's getting the going rate with his rental income of £1,500 per month,

but if he were to sell, bearing in mind his total outlay of £325,000,

what could this place achieve?

If this property was up for sale, in my opinion, it would be valued from £360,000-£380,000.

If I put the property on the market today, I'd be expecting approximately £350,000-£360,000.

That's good to hear. It really is.

I was thinking if I wanted to make a quick sale and get out, I'd think 350.

If I want to hang on and test the market for a bit, I'd push it,

but I think that makes me realise that I've done OK and if I sit on it for two years, maybe it'll be better.

So that's really good news.

When John initially bought this house, he feared his career as a property developer

was in a critical condition, but his hard work has brought it back to life. What has he learned?

Just relax about it. No point getting uptight.

It's only bricks and mortar. So I think, yeah, great. Let's crack on with the next one.

# We gotta stay positive! #

So has all this whetted your appetite for buying at auction?

-If so, there will be more compelling stories for you next time.

-We'll see you then.

-Goodbye.

Subtitles by Subtext for Red Bee Media Ltd - 2011

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