0:00:02 > 0:00:06Over the years, we've seen the ups and downs of the property market.
0:00:06 > 0:00:11Whether it's an investment or a home you're looking for, you want the value to go up.
0:00:11 > 0:00:17Make sure you buy at the right price and one way is to buy your next home under the hammer.
0:00:42 > 0:00:48- We've all heard about the ever-changing property market. - But buying at auction is simple.
0:00:48 > 0:00:52Your hand goes up, the hammer comes down, you've bought it!
0:00:52 > 0:00:57And that's what happened when today's properties were sold.
0:00:57 > 0:01:01There are great views from this South Wales property, but...
0:01:01 > 0:01:06I'm getting increasingly worried about this house.
0:01:06 > 0:01:11This Southampton semi has a large living room, but is a tight squeeze.
0:01:11 > 0:01:15I'm a bit disappointed with the size. It feels a bit cramped.
0:01:16 > 0:01:23And in Telford there's a one-bed flat that doesn't make the best first impression.
0:01:24 > 0:01:26Oh. Very dark and dingy.
0:01:28 > 0:01:34All of these properties went to auction and we'll find out who bought them and what they paid
0:01:34 > 0:01:36when they went under the hammer.
0:01:39 > 0:01:46For the first property that went to auction, I've come to spectacular South Wales.
0:01:47 > 0:01:53This is the former mining village of Blaengwynfi, located in the Upper Afan Valleys.
0:01:53 > 0:01:56Port Talbot is just 10 miles away.
0:01:56 > 0:02:01The property I'm here to see is right up in the hills, so incredible views.
0:02:01 > 0:02:04The drive here was spectacular.
0:02:04 > 0:02:10Two-bedroomed mid-terrace, built in the early 20th century to house local miners.
0:02:10 > 0:02:12It had a guide price of £21,000.
0:02:12 > 0:02:15Let's take a look.
0:02:16 > 0:02:22The front steps are pretty steep and this along with the road access
0:02:22 > 0:02:29might put off some buyers, but for others that extra height could mean even better views across the valley.
0:02:29 > 0:02:34The outside of the house isn't in great condition.
0:02:34 > 0:02:36What's it like inside?
0:02:36 > 0:02:40There's that little porch to keep the rain and the cold out.
0:02:40 > 0:02:45Then straight into your front sitting room. Not a bad size.
0:02:45 > 0:02:46Hmm.
0:02:46 > 0:02:49That's not good, is it?
0:02:49 > 0:02:52Look at the way the ceiling is kind of bowed.
0:02:52 > 0:02:58We'll investigate more in a minute. One thing I'm concerned about is this.
0:02:58 > 0:03:04Signs of damp all the way over this front wall. That's either penetrating or rising damp.
0:03:04 > 0:03:10Usual thing - not too much of an issue to sort that out, but what damage has it created?
0:03:10 > 0:03:15An open-plan area. I like that. You come through into the kitchen.
0:03:15 > 0:03:20It's a nice-sized space. The units are fairly tired and dated,
0:03:20 > 0:03:28but it's not a bad-sized room, but again look at the angles on some of these doors. And cracking.
0:03:28 > 0:03:32Loo at the back and then out the back it gets really bad,
0:03:32 > 0:03:37but I'm really concerned about these structural issues. Not good.
0:03:37 > 0:03:41# I smell real trouble
0:03:42 > 0:03:48# Lord, I smell trouble ahead of me... #
0:03:50 > 0:03:56Next to the downstairs loo there's a junk-filled room that screams, "Wasted space!"
0:03:56 > 0:04:02You could knock it through and have a lovely open dining/living area at the back here.
0:04:04 > 0:04:11Outside, like many terraces here, the garden rises very steeply and could do with a good tidy,
0:04:11 > 0:04:16but coming out here gives me a chance to inspect the back of it.
0:04:16 > 0:04:23Well, out the rear of the property you can see why we've got so many problems in the house.
0:04:23 > 0:04:30Flat roof here, the guttering, as you can see, is completely shot, across most of the building.
0:04:30 > 0:04:33All the water pours down here, going into the house.
0:04:33 > 0:04:38It just reeks of a property that hasn't had any maintenance.
0:04:38 > 0:04:43It's relatively easy to fix the actual source of the problem.
0:04:44 > 0:04:49Resolving the problems it's created is going to be a much bigger and more expensive thing.
0:04:49 > 0:04:57It's easy to forget that the priority for a property should always be the state of the exterior,
0:04:57 > 0:05:03rather than the interior design. You can choose the loveliest flooring and furnishings,
0:05:03 > 0:05:10but if the rain gets in, you could kiss it all goodbye. The front is crumbling, the back's in a bad way.
0:05:10 > 0:05:14And the ground floor needs some serious TLC.
0:05:14 > 0:05:20So up a quite steep and dangerous staircase. There should be another banister there.
0:05:20 > 0:05:26Two bedrooms and a bit of a surprise - an upstairs bathroom. That's nice to see.
0:05:26 > 0:05:33But come up here and the problems with the structure of this building become absolutely pronounced.
0:05:33 > 0:05:37This ceiling is all over the place. There's damp.
0:05:37 > 0:05:41I'm getting increasingly worried about this house!
0:05:41 > 0:05:43I think I'll make a sharp exit.
0:05:44 > 0:05:47# Well, worry, worry, worry
0:05:49 > 0:05:53# Worry is all I can do... #
0:05:53 > 0:05:59A good deal of work is needed on this house that went to auction guided at £21,000.
0:05:59 > 0:06:04I don't think it's great to have a boiler in the bedroom, so move that.
0:06:04 > 0:06:11But if the buyer got this for anywhere near the guide price, there's quite a lot of scope here.
0:06:11 > 0:06:16To find out how the house compares to others in the area,
0:06:16 > 0:06:21I asked a local property expert to come and take a look around.
0:06:21 > 0:06:26- The main selling point could well be the beautiful setting.- Fabulous,
0:06:26 > 0:06:31in summer when the weather isn't so severe, but in winter when it snows,
0:06:31 > 0:06:38this hill will be quite an obstacle. If there's ice down, it goes right to the bottom.
0:06:38 > 0:06:44That's worth remembering. Always try to see what you're buying in good and bad weather conditions.
0:06:44 > 0:06:49Apart from the wonderful views, what's the potential here?
0:06:50 > 0:06:55Well, the property is in need of quite a lot of work.
0:06:55 > 0:07:01The kitchen could be salvaged. The bathroom, you could make use of that.
0:07:01 > 0:07:09There's potential to extend, but spending quite a lot of money on that wouldn't reflect in the value.
0:07:09 > 0:07:15That guide price of £21,000 was attractive, but a lot of work is required here.
0:07:15 > 0:07:18But then how much could it be worth?
0:07:18 > 0:07:25If this property was renovated to a high standard, then I believe as a two-bedroom property
0:07:25 > 0:07:30it could be marketed and maybe achieve between £58,000 and £62,000.
0:07:30 > 0:07:35What about renting? How much income could this generate?
0:07:35 > 0:07:40As a rental property with two bedrooms, there is a local demand.
0:07:40 > 0:07:45I would estimate the rental value to be £360-£370 per calendar month.
0:07:47 > 0:07:52Well, you can't deny this is a beautiful location.
0:07:52 > 0:07:59Unfortunately, the ceilings and the floors of this house are as undulating as the countryside,
0:07:59 > 0:08:05which could be a very expensive problem. So who took this on when it went under the hammer?
0:08:05 > 0:08:09Right, we're going to lot 6.
0:08:09 > 0:08:12We're down in Blaengwynfi, near Port Talbot.
0:08:12 > 0:08:17Some lovely views from that village. What shall we say? 28 for it?
0:08:17 > 0:08:20Who's got 26 to start?
0:08:20 > 0:08:24Well, let's get on. 20, then. Thank you. 20 I'm bid.
0:08:24 > 0:08:28At 20,000 I'm bid. And one I'm bid. Thank you. At 21,000.
0:08:28 > 0:08:32At 21,000. 2 if you like. At £21,000.
0:08:32 > 0:08:372 at the back. Thank you. I saw it. 22. 23, seated.
0:08:37 > 0:08:42You're out standing, sir. At 23 seated there. 4, can I? Thank you.
0:08:42 > 0:08:47At 24 on the steps. At 24, you're out... 5 on my right. At 25.
0:08:47 > 0:08:52Make it 6, will you? Thank you, madam. At 26. Don't do that, sir.
0:08:52 > 0:08:58You have to do it that way. At 26 on the steps. I'll take a half if you like, then. No, he says.
0:08:58 > 0:09:02Not even a half. At 26. I'm going to sell it.
0:09:02 > 0:09:04The lady on the steps will get it.
0:09:04 > 0:09:09At £26,000, are we all done? The hammer's up.
0:09:09 > 0:09:14At £26,000. Yours, madam. Thank you very much.
0:09:15 > 0:09:21That final bid of £26,000 was made by Nicky who was at the auction with her partner Paul.
0:09:21 > 0:09:25Nicky is a former carer who used to work for a building society.
0:09:25 > 0:09:30Paul does contract work as a manager for housing associations.
0:09:30 > 0:09:34I met up with the couple to hear about their plans.
0:09:37 > 0:09:44- Good to meet you both. Congratulations. What an amazing location!- Absolutely fabulous!
0:09:44 > 0:09:49- Wonderful.- Can't beat the views. - You don't sound Welsh. Not locals?
0:09:49 > 0:09:53No, I'm based in Swindon now. Paul's Newbury.
0:09:53 > 0:10:00- And I was 30 years in London. - What brought you to buying a property in Wales?- Pension fund!
0:10:00 > 0:10:06I've not actually worked for three years. I've been looking after my parents.
0:10:06 > 0:10:09And...got to do something.
0:10:09 > 0:10:13And it is my pension. That's what I'm looking to do.
0:10:13 > 0:10:18- So why here and why this house? - We looked at plenty of places
0:10:18 > 0:10:25and there were plenty of places that we would have liked. We liked this one best of all.
0:10:25 > 0:10:28When Nicky saw this one, she set her heart on it.
0:10:28 > 0:10:35- What experience have you got of this?- None.- I've worked in social housing for a long time.
0:10:35 > 0:10:40I've worked on void properties, speccing the work out.
0:10:40 > 0:10:46I'm au fait with the mechanics of houses and housebuilding and house repairs.
0:10:46 > 0:10:51My middle son has a lot of experience of that kind of work.
0:10:51 > 0:10:56So between us we've got the expertise that we need for the job.
0:10:56 > 0:11:03That's really good to hear because this property needs that experience to turn it round.
0:11:07 > 0:11:13- So, Nicky, tell me exactly what you'll do.- Kitchen we plan to move out to the back.
0:11:13 > 0:11:20This is going to be a family area. Upstairs, we've got all sorts of problems
0:11:20 > 0:11:24with the floor joists, so we've got to re-lay those.
0:11:24 > 0:11:31The bathroom we'll just switch around a bit and, basically, just make it as lovely as we can.
0:11:31 > 0:11:36There are some structural concerns. Looking at the walls you think, "Goodness me!"
0:11:36 > 0:11:42There's a lot of penetrative damp on that front wall for a long time.
0:11:42 > 0:11:49It's done the damage. We've got bowing in the roof, we've got bowing in the ceiling above the bedroom
0:11:49 > 0:11:55and in the living room. It all seems to track down to these joists. They are rotted off at the end.
0:11:57 > 0:12:02Paul and Nicky hope to complete the work in six months and have a budget of £20,000.
0:12:02 > 0:12:08As that's mostly being spent on materials rather than labour, that money will go further.
0:12:08 > 0:12:13They've also got a 10% contingency in hand, just in case.
0:12:14 > 0:12:16So then what's the plan for it?
0:12:16 > 0:12:18Not too sure.
0:12:18 > 0:12:22We've got all sorts of options, really.
0:12:22 > 0:12:26I'd be quite happy to live in it while we do the next one.
0:12:26 > 0:12:32Or it could just be that we say, "This isn't for us," and not bother again.
0:12:32 > 0:12:38It's the next step in life. Ours is a fairly new relationship, anyway.
0:12:38 > 0:12:42So this is something we're doing together for us.
0:12:42 > 0:12:48It's the start of the rest of our life and you can't get more exciting than that.
0:12:49 > 0:12:55I agree. There's nothing quite as exciting as square one when the possibilities are infinite
0:12:55 > 0:12:58as on a project like this one.
0:13:00 > 0:13:04Well, Nicky and Paul clearly delighted to have found this place,
0:13:04 > 0:13:09but I am very concerned that even with their pretty substantial budget
0:13:09 > 0:13:14it's not going to cover the work they need to do to sort it out.
0:13:14 > 0:13:19Still, at the end of the day, what you can't take away is those views.
0:13:19 > 0:13:24How are they going to get on? Find out later in the show.
0:13:25 > 0:13:30For the next property that went under the hammer, I've come to Southampton
0:13:30 > 0:13:37to a rather rural sounding housing development, near the university and 10 minutes' drive from the city.
0:13:40 > 0:13:46I'm on the Flowers Estate, one of the more affordable areas of Southampton.
0:13:46 > 0:13:53And who can argue with the guide of only £105,000-£110,000 for a three-bedroomed semi-detached?
0:13:53 > 0:13:56Not me! I'm going to go inside.
0:13:56 > 0:13:59# If you want to give them flowers
0:13:59 > 0:14:02# Make them paper ones you send... #
0:14:02 > 0:14:09From out here, the property looks a bit wilted. Let's hope it's in better shape inside.
0:14:09 > 0:14:15It'll be quite interesting to find out what you do get for your money in this place.
0:14:15 > 0:14:18OK, let's start. Woodchip wallpaper everywhere in here.
0:14:18 > 0:14:24Bit of a springy floor as well, but somebody has installed some new central heating,
0:14:24 > 0:14:26so that's a plus point.
0:14:26 > 0:14:29An old electric fire, that's got to go.
0:14:29 > 0:14:35Not a bad space in here, but when you take into account out here is a very small kitchen
0:14:35 > 0:14:40and you wouldn't get a table and chairs in there and you've got to sit in there to eat,
0:14:40 > 0:14:45I'm a bit disappointed with the size. It feels a bit boxy and a bit cramped.
0:14:45 > 0:14:50And just over there is the only bathroom in the house. There's not one upstairs.
0:14:50 > 0:14:55So my first impressions? A little bit disappointing.
0:14:57 > 0:15:00A shame as the house isn't in terrible condition.
0:15:00 > 0:15:06It just needs a bit of a rethink on the layout to make it more homely and practical.
0:15:06 > 0:15:10Let's head upstairs to see if the key to success for this place lies there.
0:15:10 > 0:15:16Upstairs, it's a real straightforward layout - one, two, three bedrooms. That's it.
0:15:16 > 0:15:22This is the master and not a bad size, but what I'm quite excited about is this, look.
0:15:22 > 0:15:29Lovely storage space, so you could use it for storage or perhaps think about installing a shower room.
0:15:29 > 0:15:32I think that would really add to this property,
0:15:32 > 0:15:35but just remember, this is a great rental area,
0:15:35 > 0:15:40so whoever takes this on doesn't want to go overboard and spend too much money.
0:15:42 > 0:15:47So, three bedrooms, near to the university could be the first bonus here.
0:15:47 > 0:15:52And from the research I've done, the rental income could be tempting.
0:15:54 > 0:16:00Outside, there's a super garden which broadens its appeal to families as well.
0:16:00 > 0:16:04This house seems solid and I think the issues are mainly cosmetic,
0:16:04 > 0:16:09so there's not a fortune to spend here and it's a fantastic rental area
0:16:09 > 0:16:12which is where your opportunity lies.
0:16:12 > 0:16:16Now, buy for around the guide, renovate for £10,000 tops
0:16:16 > 0:16:19and you're looking at over a 6% yield.
0:16:19 > 0:16:23That beats the bank, so therefore, I think it's a good bet.
0:16:25 > 0:16:28Let's see what an estate agent makes of the property
0:16:28 > 0:16:32and get his expert opinion on the potential here.
0:16:32 > 0:16:35As it's so near to the university,
0:16:35 > 0:16:40could it appeal to a learned developer, well-read in the buy-to-let market?
0:16:40 > 0:16:43I think this could be a student let.
0:16:43 > 0:16:47It's not declared as a prime student area.
0:16:47 > 0:16:52It's at the bottom end of the scale, even though it is within close proximity.
0:16:52 > 0:16:57There's a slim chance of it. You'll get higher values if you go along that route,
0:16:57 > 0:17:01but it's more along the family route, I personally believe.
0:17:01 > 0:17:07How much could the house hope to generate, whether let out to students or a family?
0:17:07 > 0:17:11If the property was in good condition, letting to students,
0:17:11 > 0:17:13I'd say about 800 per calendar month.
0:17:13 > 0:17:16However, to a small family,
0:17:16 > 0:17:21you're probably looking more along the lines of 600 to 650 per calendar month.
0:17:21 > 0:17:26Remember, the house was guided at between £105,000 and £110,000.
0:17:26 > 0:17:32What is its possible market value as it is and how much could it be worth once renovated?
0:17:32 > 0:17:38As I see it, the property today, I personally believe it's worth around 125,000.
0:17:38 > 0:17:44Once it's actually refurbished, I think you're looking at a ceiling value of around 145,000.
0:17:46 > 0:17:52If this house was picked up for around the guide price of £105,000 to £110,000,
0:17:52 > 0:17:56this wilting property could look blooming marvellous.
0:17:58 > 0:18:02Names can be misleading, but appearances can also be deceptive.
0:18:02 > 0:18:05This house is a decent little home.
0:18:05 > 0:18:10More than that, it's a pretty good investment. Let's see who spotted it at the auction.
0:18:10 > 0:18:15Lot 33. A three-bed, semi-detached house, requiring some refurbishment.
0:18:15 > 0:18:18Very attractive figure. Somebody make me a bid of just 90,000?
0:18:18 > 0:18:2390. Thank you, sir. 90 we've got. Looking for 91 elsewhere.
0:18:23 > 0:18:2591, we do. Thank you.
0:18:25 > 0:18:2791. I've got my two bidders. 92?
0:18:27 > 0:18:3092. 3? 3 we have.
0:18:30 > 0:18:33And 4. 5? 5 we have.
0:18:33 > 0:18:356? Nice and quick, 6.
0:18:35 > 0:18:377? 97.
0:18:37 > 0:18:4198 against. 99? 99 is with you now.
0:18:41 > 0:18:44100? 100 we have.
0:18:44 > 0:18:46Fresh bid, 101. 102?
0:18:46 > 0:18:50102. You're close to each other. Yours, sir, at 103, raising... 104.
0:18:50 > 0:18:53105? 105, yes, thank you.
0:18:53 > 0:18:56106? 106 we have.
0:18:56 > 0:18:59107 is now bid. 108.
0:18:59 > 0:19:01108,000.
0:19:01 > 0:19:03109? 109, last ditch there.
0:19:03 > 0:19:06Fresh bid. 110,000 is yours, sir.
0:19:06 > 0:19:10Are you coming back in, either of you two? No?
0:19:10 > 0:19:15Coming in at 111 here. 112 we have. 113?
0:19:15 > 0:19:19113. Looking for 114... 114. 115?
0:19:19 > 0:19:22114 and a half. 114 and a half. 115?
0:19:22 > 0:19:25115. Half? 115 and a half.
0:19:25 > 0:19:27116?
0:19:27 > 0:19:29Fresh bid here, 116.
0:19:29 > 0:19:32Did catch your attention. 116 and a half, sir?
0:19:32 > 0:19:36New bidder at 116 and a half. Two new bidders here. 117.
0:19:36 > 0:19:40117 and a half? Bid, sir. Thank you. 118 we have.
0:19:40 > 0:19:4318 and a half. 19? 119.
0:19:43 > 0:19:46119 and a half. 120. Think where this is going.
0:19:46 > 0:19:50We've had a few examples. 120 is there. 120 and a half.
0:19:50 > 0:19:54121. 121 and a half. 122? I'm doing the maths.
0:19:54 > 0:19:56122. 122 and a half.
0:19:56 > 0:19:59123.
0:19:59 > 0:20:0223 and a half...? 124.
0:20:02 > 0:20:04125 here.
0:20:04 > 0:20:07125 and a half. No, shake of the head.
0:20:07 > 0:20:11Looking for 126 anywhere else... 125,500 then once.
0:20:11 > 0:20:14125,500 twice.
0:20:14 > 0:20:17125,500 third and final time...
0:20:18 > 0:20:24'That successful bid of £125,500 was made by Phil.
0:20:24 > 0:20:30'He went 500 quid over the stamp duty threshold which means he has to pay an extra 1%.
0:20:30 > 0:20:33'Phil's got a lot of experience with property.
0:20:33 > 0:20:38'I met up with him to find out what his plans are for this, his latest purchase.'
0:20:38 > 0:20:44- Phil, congratulations.- Thank you. - It's really good news that you got this. Tell me more about yourself.
0:20:44 > 0:20:50- Well, I've been doing property since 1997.- Are you a developer?
0:20:50 > 0:20:54I'm a developer, landlord, investor, a bit of each of those, really.
0:20:54 > 0:20:58There wasn't a plan at the time to go into property.
0:20:58 > 0:21:04I was working as a housing officer, so that was my starter pack of experience and insight into things.
0:21:04 > 0:21:08I bought my first property, then I went away for a couple of years.
0:21:08 > 0:21:12I lived in Egypt where I was doing some community development work,
0:21:12 > 0:21:15then I came back and did some more work in housing.
0:21:15 > 0:21:21I bought two further properties, then I went away and did some further studies in Norwich.
0:21:21 > 0:21:25When I came back, I thought I could make a bit of a business out of this,
0:21:25 > 0:21:28so I went out and bought four or five all at once,
0:21:28 > 0:21:32kept up with the work abroad occasionally,
0:21:32 > 0:21:37and then concentrated a lot of my resources in property.
0:21:37 > 0:21:40What sort of work abroad is it that you do?
0:21:40 > 0:21:44When I worked in Cairo, I was working mainly with Horn of Africa refugees.
0:21:44 > 0:21:49Many Sudanese came to Cairo because it was a safe haven for them.
0:21:49 > 0:21:54I headed up an Adult English Programme. I've done some food security work
0:21:54 > 0:21:56with Tearfund in Burundi.
0:21:56 > 0:21:59I've worked in Afghanistan and Kyrgyzstan
0:21:59 > 0:22:02and I've worked in Kenya as well,
0:22:02 > 0:22:06so it's been fairly varied in both the countries and the type of work.
0:22:06 > 0:22:12It's important to have that sort of work/life balance. I'm involved in my local church.
0:22:12 > 0:22:17I think people are important, so that's what I try to reflect in my life too.
0:22:20 > 0:22:23'Phil's quite right, of course.
0:22:23 > 0:22:28'People are more important and often it's not money that makes you happy.
0:22:28 > 0:22:32'It's the freedom it gives you to make the choices you want to make.
0:22:32 > 0:22:35'Phil seems to have the balance just about right.'
0:22:37 > 0:22:43What are you going to do to this place to bring it to life because it's a bit tatty on the inside?
0:22:43 > 0:22:48It is. There's not a tremendous amount that needs doing, but I'll replace the kitchen.
0:22:48 > 0:22:54I'll do some work on the bathroom. There is some lovely wallpaper here which will see the end of its life.
0:22:54 > 0:22:58Whoopee! The woodchip's going!
0:22:58 > 0:23:03Absolutely. Skimmed and painted a fairly neutral colour for the letting, then outside,
0:23:03 > 0:23:06I'll make that into a maintenance-free garden,
0:23:06 > 0:23:10thinking about the letting, but making it look nice for the sale.
0:23:10 > 0:23:14- So, the budget, come on. You've got a bit of work to do.- That's right.
0:23:14 > 0:23:19The bathroom, the kitchen, getting rid of the wallpaper. What's your budget?
0:23:19 > 0:23:24- I'm happy to spend £5,000 or £7,000 on it.- That's quite a low budget.
0:23:24 > 0:23:28Are you going to be doing quite a lot of the work yourself?
0:23:28 > 0:23:34My general approach to these things is to do as much as I can myself, putting in my own elbow grease,
0:23:34 > 0:23:38except where I'm limited by time, tools, law and expertise.
0:23:38 > 0:23:43'Getting the experts in when required makes perfect sense
0:23:43 > 0:23:47'and you can't fiddle with gas or electricity as that's illegal.
0:23:47 > 0:23:51'Sometimes it's worth paying for a good decorator
0:23:51 > 0:23:55'to add that final, sparkling, professional touch.'
0:23:55 > 0:23:59- How long is this going to take you? - I'm hoping three or four months.
0:23:59 > 0:24:03I've given myself quite a lot of time. I'm not overly desperate.
0:24:03 > 0:24:09- Phil, good luck with this. It's been lovely meeting you. Well done.- Thank you.- Lovely.
0:24:09 > 0:24:12# Give me a country
0:24:12 > 0:24:14# Where I can be free... #
0:24:15 > 0:24:21So, property developing gives Phil flexibility and freedom. How fantastic!
0:24:21 > 0:24:25And the more money he can make, the more aid work he can do,
0:24:25 > 0:24:32so, fingers crossed, this house will make him some decent cash. Find out what happens later on in the show.
0:24:33 > 0:24:38'Coming up, this Telford flat has only got one bedroom, but you can fit in a lot.'
0:24:38 > 0:24:42You've got a reasonable cupboard there and a massive cupboard here.
0:24:42 > 0:24:47'We return to Southampton where there's been a match made in heaven.'
0:24:47 > 0:24:52They were looking to move near to the university, so it's ideal for them and for me too.
0:24:54 > 0:24:58'But first, it's back to South Wales.'
0:24:58 > 0:25:02My middle son Ferrell has done an amazing amount of work on the place.
0:25:05 > 0:25:09'When we were last in the beautiful Welsh village of Blaengwynfi,
0:25:09 > 0:25:14'Nicky and Paul had just bought this semi-detached property for 26,000.
0:25:14 > 0:25:19'The couple had bought it to supplement their long-term pension provisions,
0:25:19 > 0:25:25'but once they had renovated the house, they were still undecided what to do with it.'
0:25:26 > 0:25:30- So once you've done it up, what's the plan for it?- Not too sure.
0:25:30 > 0:25:33We've got all sorts of options, really.
0:25:33 > 0:25:38I'd be quite happy to live in it while we do the next one
0:25:38 > 0:25:44- or it could just be that we'll say, "No, this isn't for us," and not bother again.- Hmm.
0:25:44 > 0:25:48Well, a whole year had passed when we met up again with Nicky and Paul
0:25:48 > 0:25:53and Paul's son Ferrell back at the property to check on the progress.
0:25:53 > 0:25:57Work is still ongoing, but the couple have had a family bereavement,
0:25:57 > 0:26:02so they've not been able to give the project their full attention.
0:26:02 > 0:26:07The delay meant their schedule for the refurbishment was affected by the weather
0:26:07 > 0:26:10and the property turned out to be in a bad way.
0:26:12 > 0:26:15The whole place was soaked through.
0:26:15 > 0:26:18The roof had failed.
0:26:18 > 0:26:23A lot of the timber work was rotted away and it was irretrievable,
0:26:23 > 0:26:28so we took the decision that we would remove everything and start again.
0:26:28 > 0:26:33So, apart from new doors, windows and rendering on the outside,
0:26:33 > 0:26:37both the roof and roof timbers have been replaced.
0:26:37 > 0:26:40What are the plans for upstairs?
0:26:41 > 0:26:46What's happening up here, basically, is we're going to be using the same layout as before.
0:26:46 > 0:26:49We're keeping it as two bedrooms,
0:26:49 > 0:26:53a smaller one at the back, a nice, big one at the front.
0:26:53 > 0:26:57And we're redoing the bathroom in the same place.
0:26:57 > 0:27:01Slightly different layout as far as the bathroom goes.
0:27:01 > 0:27:08Considering what we had to do with the roof and all the other work that's going on, it's doing fine.
0:27:08 > 0:27:12The couple have now decided to keep the house and move in when it's completed.
0:27:12 > 0:27:16While the original upstairs bathroom remains,
0:27:16 > 0:27:21the loo and former downstairs bathroom at the back have been demolished.
0:27:21 > 0:27:26Now that we've taken the bathroom out and the wall, this will be the kitchen.
0:27:26 > 0:27:29It's going to be a U-shaped kitchen.
0:27:29 > 0:27:35We've got the possibility of making a recess in one corner for some extra storage space.
0:27:35 > 0:27:42The most important thing we did was to make this hole for a window, so we've got natural light coming in.
0:27:42 > 0:27:48Over here will be the gas boiler and the sink under the window with the washing machine next to it,
0:27:48 > 0:27:50so that's nearest to the outside.
0:27:50 > 0:27:57You'll remember Nicky and Paul are not from Wales, so they've had to travel from Swindon and Newbury
0:27:57 > 0:27:59to work on the house.
0:27:59 > 0:28:03The difficulty for us has been that it is a long way.
0:28:03 > 0:28:07We do have to virtually camp out here when we come down.
0:28:07 > 0:28:14Nice to have been a bit nearer to it. You can't just pop in and do a couple of hours when you've got time.
0:28:14 > 0:28:19As well as Nicky and Paul's efforts, they've also had help from Paul's three sons.
0:28:19 > 0:28:24My middle son Ferrell has done an amazing amount of work on the place.
0:28:24 > 0:28:29Both my other sons have been down and done a little bit with us too,
0:28:29 > 0:28:33but chiefly, it's been Nicky and I and Ferrell that have been here.
0:28:33 > 0:28:40Ferrell's got experience in bathroom and kitchen fitting and general building, but this was a first.
0:28:40 > 0:28:47I've got a bit of knowledge behind me, but nothing to the extent of a complete rebuild of a house.
0:28:47 > 0:28:51It's a challenge for me as well. The reconstructing was the major part.
0:28:51 > 0:28:55All the woodwork had to be replaced and all the floor joists.
0:28:55 > 0:28:59The roof was a big one, obviously, to get it watertight.
0:28:59 > 0:29:03How much have they had to spend on the project so far?
0:29:03 > 0:29:07Remember, they had allowed £20,000 for the whole refurbishment.
0:29:09 > 0:29:13So far, we have spent around about £12,000.
0:29:13 > 0:29:16We've still got the internal fitting to do,
0:29:16 > 0:29:23so I'm confident that we'll use the rest of that budget, but that we won't go over budget.
0:29:23 > 0:29:27Time to get some property advice and valuations
0:29:27 > 0:29:29from two local estate agents.
0:29:29 > 0:29:34I think the work that's been done so far, it obviously was necessary.
0:29:34 > 0:29:37Quite a lot of effort has gone into it,
0:29:37 > 0:29:39but it should be plain sailing now.
0:29:39 > 0:29:42The layout, I think, is great.
0:29:42 > 0:29:44The two bedrooms is fine.
0:29:44 > 0:29:47It'll have a decent-sized lounge, dining room,
0:29:47 > 0:29:51which a lot of people like, and a reasonable-sized kitchen.
0:29:51 > 0:29:54I think the layout is just about right.
0:29:54 > 0:29:58It frees up what was a bathroom to create more space downstairs.
0:29:58 > 0:30:02And the kitchen plan is just about right for the size of property.
0:30:02 > 0:30:06Once the house is finished, Nicky and Paul plan to move in,
0:30:06 > 0:30:12but if they decide some time later perhaps to rent it out, how much income could it generate?
0:30:12 > 0:30:16The rental value for this property, in pretty good condition,
0:30:16 > 0:30:19would be about £350 to £360 per calendar month.
0:30:19 > 0:30:26I would suggest rental value on this property is 350, 360 per calendar month.
0:30:26 > 0:30:32It doesn't surprise us really that that's what they're talking about
0:30:32 > 0:30:36because that's what we'd expect it to go on the market for rental-wise,
0:30:36 > 0:30:39but we're not tempted in the slightest.
0:30:40 > 0:30:44What about resale value of the property once the work is complete?
0:30:44 > 0:30:48Bearing in mind that they paid £26,000 at the auction
0:30:48 > 0:30:54and hope their budget will stay at around 20,000, making a total outlay of £46,000,
0:30:54 > 0:30:56how much could the house be worth?
0:30:56 > 0:31:01As long as the work was finished and to a decent standard,
0:31:01 > 0:31:05I would suggest the property would be valued at £55,000.
0:31:05 > 0:31:09However, with the market as it is at the moment,
0:31:09 > 0:31:14they would do exceptionally well to get offers over £52,000.
0:31:14 > 0:31:18If the property was finished to a fairly high standard,
0:31:18 > 0:31:23in today's market, I'd expect this to achieve between £52,000 and £55,000.
0:31:23 > 0:31:31That valuation range of 52,000 and 55,000 would generate between £6,000 and £9,000 pre-tax profit
0:31:31 > 0:31:33before the usual selling expenses.
0:31:34 > 0:31:39It doesn't seem unreasonable, considering the state of the housing market,
0:31:39 > 0:31:46but we always looked on it as how much we were getting a house for that we could make a home in.
0:31:46 > 0:31:51After hearing those valuations, are they still pleased they bought it?
0:31:51 > 0:31:55- Yeah.- Absolutely.- Absolutely. - It's such a lovely place to be.
0:31:55 > 0:31:59It's quiet, it's peaceful, it's a gorgeous place.
0:31:59 > 0:32:05If I was only able to spend two weeks in a year in the house, I would consider it worth it.
0:32:05 > 0:32:07It's really lovely.
0:32:11 > 0:32:17This is Ironbridge in Shropshire, known as the birthplace of the Industrial Revolution
0:32:17 > 0:32:22because of this bridge behind me, built by Abraham Darby in 1779.
0:32:22 > 0:32:26It was the first bridge ever to be constructed out of cast iron
0:32:26 > 0:32:30and people travelled from far and wide to marvel at its ingenuity.
0:32:30 > 0:32:33And they still do.
0:32:33 > 0:32:37Today, Ironbridge is the jewel in Telford's industrial crown
0:32:37 > 0:32:43and its multiple museums, shops, tea rooms, not to mention history, make it a lovely place to visit.
0:32:43 > 0:32:48Let's hope our next property is as good as the view.
0:32:48 > 0:32:54Well, travel around ten minutes away from Ironbridge and fast-forward a couple of hundred years or so
0:32:54 > 0:32:59and you find yourself in Brookside, a purpose-built estate largely of flats.
0:32:59 > 0:33:03Not particularly pretty from the outside, but what about the inside?
0:33:03 > 0:33:08I'm here to see a one-bedroom flat. It had a guide price of 30,000 quid. Let's take a look.
0:33:08 > 0:33:14OK, this 1970s development isn't everyone's dream location, but it is well maintained.
0:33:16 > 0:33:21Inside, it's up to the first floor and along the corridor to the flat itself.
0:33:21 > 0:33:25Oh, straight away, very dark and dingy.
0:33:25 > 0:33:30Maybe it's the colour of the walls, but I'd want to get some light into the flat here.
0:33:30 > 0:33:34Bathroom and loo there, a reasonable size, in reasonable nick.
0:33:34 > 0:33:38Bedroom there. That's not bad, a good-sized double.
0:33:38 > 0:33:42Your main living room area there and then through to the kitchen.
0:33:42 > 0:33:46Maybe it's because all the windows seem relatively small.
0:33:46 > 0:33:52That, I think, is giving this a fairly sort of oppressive feel to the flat.
0:33:52 > 0:33:58But lots of storage. You've got a reasonable cupboard there and an absolutely massive cupboard here,
0:33:58 > 0:34:03so you could think about opening this up somehow and just a careful choice of colours.
0:34:03 > 0:34:07Stick with your browns, your lights, a light-coloured carpet.
0:34:07 > 0:34:13Do whatever you can to increase the feeling of space because for a one-bedroom flat, it's not bad.
0:34:13 > 0:34:16And don't forget that guide price.
0:34:16 > 0:34:19At the guide price of £30,000, this is just the sort of property
0:34:19 > 0:34:23that could appeal to a developer on the lookout for a bargain.
0:34:23 > 0:34:27# Tangled up in blue... #
0:34:27 > 0:34:31It's a straightforward property in acceptable condition.
0:34:31 > 0:34:34Cracked sockets and peeling paper aren't hard to rectify.
0:34:34 > 0:34:39This one-bedroom flat would be ideal for a first-time buyer.
0:34:40 > 0:34:44Outside, the exterior structure of the block looks sound.
0:34:44 > 0:34:49A further bonus is that the lease has been extended to 99 years.
0:34:49 > 0:34:53The service charge of £28 a calendar month isn't excessive
0:34:53 > 0:34:57and neither is the ground rent, just £10 a year.
0:34:58 > 0:35:01We invited a local property expert to look at this flat
0:35:01 > 0:35:04which went to auction guided at 30,000.
0:35:04 > 0:35:09I've had a good look around and can't see any major problems.
0:35:09 > 0:35:12Dare I say it, at that price, this is a no-brainer.
0:35:12 > 0:35:16The area we're situated in at the moment
0:35:16 > 0:35:20is a very affordable area and is very popular for investment buyers,
0:35:20 > 0:35:22as well as first-time buyers.
0:35:22 > 0:35:26I'd spend as little as possible, either put it back on the market...
0:35:26 > 0:35:31There is a ceiling level for these properties. And for the rental market as well.
0:35:31 > 0:35:37What's a realistic valuation of the flat as it is now and once it's been spruced up a bit?
0:35:37 > 0:35:44I would say the value of this property in its current condition is somewhere in the region of £37,500.
0:35:44 > 0:35:50Once the property has been completed and done up, I would say a maximum of around £45,000.
0:35:50 > 0:35:56That's interesting. It sounds like you could increase the value by around 50%.
0:35:56 > 0:35:59And would it be better to sell this or let it out?
0:36:00 > 0:36:04I would say this property would be better suited to the rental market.
0:36:04 > 0:36:08You would achieve around about £375 per calendar month.
0:36:08 > 0:36:14So whoever bought this flat at auction will do better if they find a tenant for it.
0:36:14 > 0:36:18Well, this flat may not be a marvel of engineering,
0:36:18 > 0:36:21but it could make you a considerable wodge of cash.
0:36:21 > 0:36:25Let's see who saw the opportunity when it went under the hammer.
0:36:26 > 0:36:29Lot 29, back to Telford.
0:36:29 > 0:36:33It's a one-bedroomed, first floor apartment.
0:36:33 > 0:36:36Requires modernising. Shall we start at 25?
0:36:36 > 0:36:3920 then? Let's get it going at 20.
0:36:39 > 0:36:4220 I'm bid. Thank you. At £20,000. I'll go in twos.
0:36:42 > 0:36:4622 can I say? At 20... 22.
0:36:46 > 0:36:4924. 26.
0:36:49 > 0:36:5126,000.
0:36:51 > 0:36:5428? £28,000.
0:36:54 > 0:36:58I'll take one if it helps. 29. At 29,000.
0:36:58 > 0:37:0330 now? At £29,000 then, are we all done?
0:37:03 > 0:37:05Just in time. £30,000.
0:37:05 > 0:37:11Another one? At £30,000 seated left against you standing.
0:37:11 > 0:37:16The bid's at 30. I'm selling it then. At 30,000 then for the first time.
0:37:16 > 0:37:19At 30,000 for the second time.
0:37:19 > 0:37:21Third and final time...
0:37:23 > 0:37:25Your lot, sir. Well done.
0:37:26 > 0:37:31'The successful bidder with his bid of £30,000 was Steve.
0:37:31 > 0:37:34'He bought the flat with his business partner Chris.
0:37:34 > 0:37:39'I met up with Steve to find out exactly why they wanted this little place.'
0:37:39 > 0:37:43- Steve, lovely to meet you. Congratulations.- Thank you.
0:37:43 > 0:37:46- Why did you want to buy the flat? - We didn't.- Huh?
0:37:46 > 0:37:52- We just sort of like... It was a price sort of decision.- At what point was the decision made?
0:37:52 > 0:37:57When he started about £15,000, we thought, "Too good to turn down."
0:37:57 > 0:38:00So you made the decision as the lot was announced?
0:38:00 > 0:38:02Yes, as the auction was in progress.
0:38:02 > 0:38:05- Right. Had you looked at it before? - Nope.
0:38:05 > 0:38:10- Were you aware of it?- We'd seen the picture in the brochure.- Right.
0:38:10 > 0:38:13Of a flat of similar description.
0:38:13 > 0:38:18- That was it?- That was it. - You hadn't visited?- No. - You hadn't done any research?- No.
0:38:18 > 0:38:25- You hadn't checked it out?- No. - Nothing to do with the legals?- No! Spur of the moment.
0:38:25 > 0:38:29- Do you do this kind of thing very often?- Not on a weekly basis.
0:38:29 > 0:38:35- Have you done anything like this before?- No, first purchase at auction.- And it's the first one?- Yes.
0:38:35 > 0:38:41- Do you know you broke every single rule in the book?- Absolutely. Throw caution to the wind!
0:38:41 > 0:38:48'What a rebel! His first property auction and he's already broken all the rules.
0:38:48 > 0:38:54'Forget throwing caution to the wind. Let's hope this flat doesn't blow up into a storm for them.'
0:38:56 > 0:39:02- What do you do when you're not randomly buying properties? - Refuse collection. I'm the bin man.
0:39:02 > 0:39:08- Really?- A bin man, yes.- That's your full-time job?- Yeah.- What took you into the world of property?
0:39:08 > 0:39:15A friend of mine has got a few houses. The market's a bit down, got a couple of quid hanging about,
0:39:15 > 0:39:18so one thing led to another.
0:39:18 > 0:39:24- I'm interested in the practicalities. The auctioneer says, "Lot number blah-blah-blah."- Yeah.
0:39:24 > 0:39:29You haven't got much chance to chat with your friend about what you're going to do.
0:39:29 > 0:39:32He gave me a bit of a nudge and said, "What do you reckon?"
0:39:32 > 0:39:38The price was so keen and we joined the bidding at 15 and it worked its way up to the price we paid.
0:39:38 > 0:39:42- So it was "make it up as you go along"?- Absolutely.
0:39:42 > 0:39:46We were a bit worried at one point. "Are we doing the right thing here?"
0:39:46 > 0:39:52But adrenaline kicks in, you get a bit excited and the next thing you know, the hammer's down
0:39:52 > 0:39:56and you've got yourself a flat you've not even seen.
0:39:56 > 0:39:59# My old man's a dustman, he wears a dustman's hat... #
0:39:59 > 0:40:02'Steve and Chris work very closely together.
0:40:02 > 0:40:06'Steve drives the waste disposal truck while Chris is the loader.
0:40:06 > 0:40:10'They work as a team every day and trust each other's judgment,
0:40:10 > 0:40:14'but bidding blind at auction is still a very risky business.
0:40:14 > 0:40:17'Was Steve pleased when he walked through the door?'
0:40:17 > 0:40:23It was a pleasant surprise because some of them suffer from damp and are a bit knocked about.
0:40:23 > 0:40:26This one wasn't too bad. We were really pleased.
0:40:26 > 0:40:29What are you going to do with it?
0:40:29 > 0:40:34Basically, as you can see, it obviously needs a bit of decoration doing.
0:40:34 > 0:40:39Floor, carpets, tiling in the kitchen and bathroom, new bathroom and kitchen, new doors.
0:40:39 > 0:40:43That's basically it. The council do look after these places quite well.
0:40:43 > 0:40:49The electrics are top quality, the central heating is pretty new, so it's not too bad at all.
0:40:49 > 0:40:53- What budget have you got?- We're looking at a maximum of £3,000.
0:40:53 > 0:41:00My partner will be doing the majority of the work, so we'll be saving a lot of costs on that front.
0:41:00 > 0:41:05- Including a kitchen and bathroom? - Yeah.- Are you recycling materials people have thrown out?
0:41:05 > 0:41:11I found a lovely mustard-coloured bath the other week. Beautiful. But I was holding out for chocolate.
0:41:13 > 0:41:18'I look forward to hearing if he finds an avocado basin to complete the set.
0:41:18 > 0:41:23'Steve's allowed four weeks to get this place scrubbed up which should be plenty of time,
0:41:23 > 0:41:29'so after his hair-raising auction escapade, what does the future hold for the flat?'
0:41:29 > 0:41:35- We're going to let this one out. - The returns on what you paid are amazing.- Yeah, good return on it.
0:41:35 > 0:41:39- What's the plan for the future? - The plan is to mortgage this one,
0:41:39 > 0:41:42then with the money from that to move to the next one.
0:41:42 > 0:41:48- And build a portfolio?- The next one we're looking at to buy, do up, turn it round and re-sell.
0:41:48 > 0:41:54Will you follow the same strategy in terms of the properties you buy in the future?
0:41:54 > 0:42:00You have so many properties to look at in such a short period of time that you can't see 'em all,
0:42:00 > 0:42:05so we'll see what we can and what we can't see, we'll see what the price is.
0:42:05 > 0:42:10- And if it sounds like a good deal, you'll go for it?- Why not? Why not?
0:42:10 > 0:42:15The list of "why nots" would take me about half an hour, but you seem to have got away with it.
0:42:15 > 0:42:21- Throw caution to the wind. You make your own luck. - It's an alternative strategy.
0:42:21 > 0:42:26- Congratulations.- Thank you very much.- Lovely to meet you. - Nice to meet you.
0:42:26 > 0:42:30# Oh, my old man's a dustman, he wears a dustman's hat
0:42:30 > 0:42:34# He wears cor-blimey trousers and he lives in a council flat... #
0:42:34 > 0:42:40Oh, boy! Refuse collector Steve certainly hasn't picked up a rubbish investment on this occasion,
0:42:40 > 0:42:45despite breaking all the rules and not even seeing the property beforehand.
0:42:45 > 0:42:52When we return, will it be sorted out or will it still be a bit of a tip? Find out later in the show.
0:42:55 > 0:43:00We always hope that our buyers have set themselves realistic timescales and budgets.
0:43:00 > 0:43:05There's only one way to find out and that's to go back and see.
0:43:05 > 0:43:07Back now to Southampton.
0:43:07 > 0:43:14Earlier in the programme, Phil, a charity worker, property investor and landlord with over 12 properties
0:43:14 > 0:43:18had paid £125,500 for this house to add to his portfolio.
0:43:18 > 0:43:23It was in reasonable condition, although the layout downstairs wasn't great,
0:43:23 > 0:43:27and Phil had already worked out his refurbishment strategy.
0:43:27 > 0:43:31I'm going to replace the kitchen, do some work on the bathroom.
0:43:31 > 0:43:39- Some lovely wallpaper here will soon see the end of its life.- Whoopee! The woodchip's going!- Absolutely.
0:43:42 > 0:43:45Six months later, we met up again with Phil.
0:43:48 > 0:43:53The property has been decorated throughout and tenants have already moved in.
0:43:53 > 0:43:57Upstairs, the three bedrooms have been decorated.
0:43:59 > 0:44:02The house has new carpets throughout
0:44:02 > 0:44:05and the hallway has been completely re-plastered.
0:44:07 > 0:44:14Although Phil has let out several of his properties, this was to be the first one aimed at students.
0:44:14 > 0:44:16How did he go about finding them?
0:44:16 > 0:44:20I'm fairly new to the student market, so I went to a couple of agents
0:44:20 > 0:44:23who are fairly active in the area for students.
0:44:23 > 0:44:29Because it was quite late on in the day for finding students, there wasn't a great response.
0:44:29 > 0:44:35I was quite active in my own advertising and that's when these guys expressed an interest.
0:44:35 > 0:44:37They are three guys from my church.
0:44:37 > 0:44:43They were looking to move near to the university, so it's ideal for them and for me.
0:44:43 > 0:44:48Phil had a lot of help from his friends and tradesmen, but also got stuck in himself.
0:44:48 > 0:44:50So what exactly was his role?
0:44:50 > 0:44:52It was mainly as project manager,
0:44:52 > 0:44:59but also all those areas which don't require a lot of expertise, so all the wallpaper coming down,
0:44:59 > 0:45:02clearing away of rubbish, doing the garden.
0:45:02 > 0:45:08The garden has been transformed with a new back fence and side gate and the new lawn looks great,
0:45:08 > 0:45:12but what has been the biggest change inside?
0:45:13 > 0:45:19Basically, this has been the largest area of transformation. There was just really a hole here before,
0:45:19 > 0:45:22so now it's a fully equipped kitchen.
0:45:22 > 0:45:28There's a large area of work surface, there's a new one-and-a-half bowl sink,
0:45:28 > 0:45:31so finally, it's gone from being fairly dull and drab
0:45:31 > 0:45:36to something that is very functional and hopefully very attractive too.
0:45:41 > 0:45:45The bathroom remains downstairs beside the kitchen.
0:45:45 > 0:45:49Phil's added a new shower and some other bits and pieces,
0:45:49 > 0:45:55but wasn't the original plan to add a shower room upstairs in the main bedroom?
0:45:55 > 0:46:00There was a possibility of putting an en-suite in the master bedroom.
0:46:00 > 0:46:04However, I decided fairly early on that wasn't necessary,
0:46:04 > 0:46:09given where I was going to in my aim for the property.
0:46:09 > 0:46:14Phil has several other properties let out to tenants.
0:46:14 > 0:46:17He had allocated up to £7,000 for the work,
0:46:17 > 0:46:20so did he stick to that figure?
0:46:20 > 0:46:22The budget was £5,000 to £7,000.
0:46:22 > 0:46:27I've spent more in the region of £9,000 because of miscellaneous items.
0:46:27 > 0:46:31One was the plaster work. The kitchen was slightly more as well.
0:46:31 > 0:46:34The house might not look massively different,
0:46:34 > 0:46:40but re-plastering and installing a new kitchen and a shower in the bathroom,
0:46:40 > 0:46:44plus all the turf in the garden, the fences and the gate all adds up.
0:46:44 > 0:46:51Phil paid £125,500 at the auction and spent £9,000 on the work,
0:46:51 > 0:46:54so his total outlay is £134,500.
0:46:54 > 0:46:58Has the money been well spent here? Has he added value?
0:47:01 > 0:47:05Time to get some expert property advice from two local estate agents.
0:47:05 > 0:47:09I like the property. I think it presents well.
0:47:09 > 0:47:14A basic refurb, but that's fine for the market that he's offering to.
0:47:14 > 0:47:18The main thing I like is the kitchen which has just gone in,
0:47:18 > 0:47:23the downstairs bathroom and also the garden which is a good length.
0:47:23 > 0:47:26The kitchen is particularly nice.
0:47:26 > 0:47:32The bathroom being on the lower level, it's personal preference. Some people may be put off by that.
0:47:32 > 0:47:36I may have put the bathroom upstairs, but to lose a bedroom,
0:47:36 > 0:47:43you'll lose the rental value, so I can understand why the current vendor hasn't changed it.
0:47:43 > 0:47:49How much is the place now worth? Remember, Phil's total spend is about £134,500.
0:47:49 > 0:47:52So is he looking at a profit?
0:47:52 > 0:47:54I think this property would re-sell
0:47:54 > 0:48:00for approximately £130,000 to £135,000 in the current market.
0:48:00 > 0:48:06In the current market, the valuation for the property would be £135,000.
0:48:06 > 0:48:12Well, that range of valuations from 130,000 to 135,000 would mean a loss
0:48:12 > 0:48:19of between £4,500 or a profit of £500 before the usual selling expenses.
0:48:19 > 0:48:22But Phil is not disappointed.
0:48:22 > 0:48:28I'm happy with those values. Those were the values which I came up with when I did my due diligence on it.
0:48:28 > 0:48:35I've got no intention of selling before ten years or so, so within reason, it doesn't really matter.
0:48:35 > 0:48:39Over the years, this property will generate income for Phil.
0:48:39 > 0:48:44He's already getting £780 a month from his current tenants.
0:48:44 > 0:48:50How much could it generate if let to a family, rather than on a room-by-room basis?
0:48:50 > 0:48:55The current rental valuation for the property is £625 per calendar month.
0:48:55 > 0:49:01I think this property would rent for approximately 600 to 650 per calendar month if rented as a house,
0:49:01 > 0:49:05maybe slightly more if rented room to room.
0:49:05 > 0:49:13Those figures are quite applicable to perhaps a family wanting to rent a house like this.
0:49:13 > 0:49:18For the student market, the normal rent is between 940 and 980.
0:49:18 > 0:49:25I'm achieving 780 which is a bit of a concession because I know the tenants who are here,
0:49:25 > 0:49:29but next year I will be looking to achieve more towards 950 per month.
0:49:32 > 0:49:36So another property joins Phil's growing portfolio.
0:49:36 > 0:49:40They all need managing, but Phil is very much his own boss.
0:49:40 > 0:49:46That works well for him because he also does a lot of overseas charity work. So what next?
0:49:46 > 0:49:52I've just bought a further property at auction on the other side of the city which I'm renovating just now.
0:49:52 > 0:49:58I'm very much hoping that my work in managing a portfolio and property investment
0:49:58 > 0:50:02will feed into my longer-term plans in community development abroad.
0:50:02 > 0:50:06I feel I have my work/life balance approximately right,
0:50:06 > 0:50:10so I'm fairly happy and very thankful for that too.
0:50:13 > 0:50:16Earlier, we were in Telford
0:50:16 > 0:50:22where Steve and his business partner Chris had bought this first floor, one-bed flat for £30,000.
0:50:22 > 0:50:28They work together on a waste disposal truck. Steve drives and Chris is the loader.
0:50:28 > 0:50:32# Oh, my old man's a dustman, he wears a dustman's hat... #
0:50:32 > 0:50:39It was their first joint purchase and they bought the flat as a long-term, buy-to-let investment.
0:50:39 > 0:50:43Steve planned to leave most of the work to his business partner Chris,
0:50:43 > 0:50:47but he had been on the lookout for some bargain recycling at the tip.
0:50:47 > 0:50:54I found a lovely mustard-coloured bath the other week. Beautiful. But I was holding out for chocolate.
0:50:57 > 0:51:01Just six weeks later and we met up again with Steve back at the flat
0:51:01 > 0:51:05to see how the refurbishment had progressed.
0:51:08 > 0:51:14Remember, the flat had the blues all right, but now you're welcomed with a more neutral colour scheme.
0:51:14 > 0:51:16# How long
0:51:16 > 0:51:18# Baby, how long... #
0:51:18 > 0:51:23Well, it's so long to the blues and the bath in the bathroom.
0:51:23 > 0:51:27A super finish - all tiled and a white suite.
0:51:27 > 0:51:34Like Steve, I didn't really fancy a mustard bath and wasn't too struck on the chocolate one either.
0:51:34 > 0:51:40Let's check out the rest of the flat where the layout has stayed pretty much the same.
0:51:40 > 0:51:42One kitchen.
0:51:42 > 0:51:44One bedroom.
0:51:46 > 0:51:48And a living room.
0:51:48 > 0:51:52But I'm not sure about those new carpets.
0:51:52 > 0:51:54# It was acceptable in the '80s
0:51:55 > 0:51:59# It was acceptable at the time... #
0:51:59 > 0:52:03Well, as you can see, we've repainted,
0:52:03 > 0:52:08floors, new carpets, lightened up the texture.
0:52:08 > 0:52:14There wasn't a great deal of work involved, but it all takes time to do, so we're quite happy.
0:52:14 > 0:52:20I hope Steve and Chris haven't put off any potential tenants by their choice of carpet.
0:52:20 > 0:52:22It won't appeal to everybody.
0:52:22 > 0:52:28You might say the carpet is very "old-age pensioner", but it went in purely down to price.
0:52:28 > 0:52:33It was free, so that is why we've got the carpet.
0:52:33 > 0:52:37Well, it made financial sense and you can't argue with that.
0:52:37 > 0:52:42Remember, Steve and Chris bought the flat for £30,000 without seeing it first,
0:52:42 > 0:52:48so did the pair discover any hidden problems when they've taken a good look around?
0:52:48 > 0:52:52We've been really lucky because we haven't uncovered any major problems.
0:52:52 > 0:52:58Just little cracks in the plaster. There was nothing wrong. It was structurally sound.
0:52:58 > 0:53:02The major work is done. We're waiting for a few doors to arrive.
0:53:02 > 0:53:04Chris did all the work as planned.
0:53:04 > 0:53:09I just popped in to bring him some cake and some tea and cheer him up.
0:53:09 > 0:53:13He's cracked on very well and we're pleased.
0:53:13 > 0:53:18The popular theory about property is you should invest in the kitchen and bathroom.
0:53:18 > 0:53:22And that's just what Steve and Chris did here.
0:53:23 > 0:53:26It's a whole, brand-new kitchen, as you can see.
0:53:26 > 0:53:30New work surfaces, total redecoration, new tiled floor.
0:53:30 > 0:53:36We've been quite lucky with the boiler. It's been regularly serviced by the council.
0:53:36 > 0:53:39We haven't got any expenditure on that front.
0:53:39 > 0:53:44How much did they have to spend here on top of their £30,000 purchase price?
0:53:46 > 0:53:49Well, we did have a budget of £3,000,
0:53:49 > 0:53:54but with Chris doing all the work himself, we've managed to get the budget down to £2,200,
0:53:54 > 0:53:58so we're happy with that, we're pleased.
0:53:58 > 0:54:03The pair plan to rent it out. Do they have anyone lined up to take it?
0:54:03 > 0:54:09At the moment, we don't have a tenant lined up, but we will be advertising within the next few days
0:54:09 > 0:54:12and hopefully, someone will be along soon.
0:54:14 > 0:54:17Two people are now heading to the flat -
0:54:17 > 0:54:20local estate agents here to give their expert opinions.
0:54:20 > 0:54:24I think the flat is a generous size.
0:54:24 > 0:54:26It's in fairly good condition.
0:54:26 > 0:54:30Nice sized rooms, decent kitchen as well. Yeah, it's good.
0:54:30 > 0:54:33I'm a little disappointed with the finish
0:54:33 > 0:54:35and also with the carpets.
0:54:35 > 0:54:39They seem to be a throwback to the 1970s, 1980s.
0:54:39 > 0:54:43They could have done with more neutral carpets in here.
0:54:43 > 0:54:47I'd have extended the kitchen as well and taken out the storage cupboard.
0:54:47 > 0:54:52What I do like about the property is the bathroom and the kitchen,
0:54:52 > 0:54:57though perhaps I would have made the kitchen bigger if he decides to go down the selling option.
0:54:57 > 0:55:03So could Steve now be tempted to sell? Does he think it's been a good purchase?
0:55:03 > 0:55:08We are still pleased we bought the flat and we'll still go down the rental line.
0:55:08 > 0:55:13OK, so how much rental income could Chris and Steve achieve here?
0:55:13 > 0:55:19This would rent extremely easily and I would expect to get £375 per calendar month.
0:55:19 > 0:55:23The rental market is stronger for a property like this at the moment
0:55:23 > 0:55:26and you'd be looking at achieving about £375 per month.
0:55:26 > 0:55:32£375 per calendar month, I'm quite happy with that. That's quite acceptable.
0:55:32 > 0:55:34Has the flat increased in value?
0:55:34 > 0:55:39They paid £30,000 at the auction and have pegged their budget at £2,200,
0:55:39 > 0:55:42so a total outlay of £32,200.
0:55:42 > 0:55:45But what is it worth now?
0:55:46 > 0:55:48In current conditions,
0:55:48 > 0:55:52we'll expect a price of round about £45,000.
0:55:52 > 0:55:56There is a ceiling level for these types of properties in this area.
0:55:56 > 0:56:00Put it on the market for no more than £45,000.
0:56:00 > 0:56:06Those valuations of £45,000 would generate a gross profit of £12,800
0:56:06 > 0:56:10before deducting the usual selling expenses.
0:56:11 > 0:56:15I think £45,000 for sale is a fair price.
0:56:15 > 0:56:18The flat cost us 30,000 at the auction.
0:56:18 > 0:56:23We spent about 2,200 on it, then we've got solicitors' fees.
0:56:23 > 0:56:26For it to be worth around 45, that's a nice return.
0:56:26 > 0:56:29It sure is after just two months.
0:56:29 > 0:56:34Let's not worry about those carpets. They cost nothing and didn't hold back the price.
0:56:34 > 0:56:37Our bin men have cleaned up here.
0:56:37 > 0:56:41They took a chance buying blind. Would Steve do it again?
0:56:41 > 0:56:47Absolutely. I'd still buy another flat without looking at it. You only live once. Live dangerously!
0:56:50 > 0:56:53Those stories have now been added to our archive.
0:56:53 > 0:57:00- But there are always plenty more and to see those, join us on Homes Under The Hammer. Goodbye.- Goodbye.
0:57:16 > 0:57:20Subtitles by Subtext for Red Bee Media Ltd 2011
0:57:20 > 0:57:24Email subtitling@bbc.co.uk