0:00:00 > 0:00:06Hello! Did you ever want to buy property at auction, but didn't know where to start?
0:00:06 > 0:00:09Well, perhaps we can show you some tricks of the trade.
0:00:09 > 0:00:14Join us as we follow brave buyers buying their homes under the hammer.
0:00:39 > 0:00:43Auction rooms aren't intimidating. Anyone can buy there.
0:00:43 > 0:00:47Today we talk to intrepid buyers who've taken the plunge.
0:00:47 > 0:00:50Will they sink or swim? Let's find out.
0:00:51 > 0:00:56I'm in west London, where, frankly, I can't believe my eyes.
0:00:56 > 0:00:58How absolutely fascinating!
0:00:58 > 0:01:00Huh!
0:01:01 > 0:01:06There are some very problematic stairs at this Victorian terrace in Cardiff.
0:01:06 > 0:01:10Whoever buys this property at auction has got to work on that!
0:01:11 > 0:01:17And I hope my luck won't run out when I visit this terraced house in Stockport.
0:01:18 > 0:01:21Does it continue in the kitchen? Yeah, it does!
0:01:22 > 0:01:25All these properties have been sold at auction.
0:01:25 > 0:01:28We'll find out who bought them and what they paid
0:01:28 > 0:01:30when they went under the hammer.
0:01:30 > 0:01:31Yours, sir!
0:01:36 > 0:01:40I'm in the London borough of Hammersmith and Fulham,
0:01:40 > 0:01:43an area that saw a lot of development in the Victorian era.
0:01:43 > 0:01:46Some of the architecture here is so impressive
0:01:46 > 0:01:49that whole streets are listed.
0:01:49 > 0:01:54But there's more than Victorian architecture to entice potential property purchasers
0:01:54 > 0:01:56to this desirable part of the city.
0:02:00 > 0:02:03That is the main road into London from the west.
0:02:03 > 0:02:08Baron's Court tube there, and you're quite close to Hammersmith and West Kensington
0:02:08 > 0:02:11so not a bad location at all.
0:02:11 > 0:02:14The property I'm here to see is a flat, two bedrooms,
0:02:14 > 0:02:18built around 1920. A guide price of 225,000 quid.
0:02:18 > 0:02:22Let's hope some of the 1920s era remains.
0:02:24 > 0:02:28It's a busy junction, all right, but the flats are set back from the road.
0:02:28 > 0:02:33The well-maintained reception area really has retained its period charm
0:02:33 > 0:02:37which helps raise this place to a whole new level!
0:02:40 > 0:02:42Not a huge lift, for sure,
0:02:42 > 0:02:45but at least there is one which brings you to the second floor
0:02:45 > 0:02:48which is where you find the flat I'm here to see.
0:02:51 > 0:02:56Huh! Wow. It's a really interesting building from the outside
0:02:56 > 0:03:00but you don't think that'll be translated into the shape of the flat.
0:03:00 > 0:03:03It's basically one huge great curve!
0:03:03 > 0:03:06How absolutely fascinating!
0:03:06 > 0:03:10Wow! Straightaway facing you is the kitchen.
0:03:10 > 0:03:13And all the rooms are going to be like this!
0:03:13 > 0:03:16Narrower at one end and wider at the other.
0:03:16 > 0:03:20That's an interesting problem when it comes to furniture!
0:03:20 > 0:03:22Kitchen itself, very small.
0:03:22 > 0:03:26How do you describe this to a furniture designer or kitchen maker?
0:03:26 > 0:03:30"It's like this. It's kind of round at one end, thin..." No.
0:03:30 > 0:03:32It's great!
0:03:32 > 0:03:36# Bend me, shake me, any way you want me... #
0:03:36 > 0:03:40I reckon these kitchen units could be the originals
0:03:40 > 0:03:44and must have been shaped to fit into such an unusual space.
0:03:44 > 0:03:47It's certainly bright and charming,
0:03:47 > 0:03:50but it needs a complete overhaul to make it more practical.
0:03:50 > 0:03:54What else have we got? A very small bedroom there.
0:03:54 > 0:03:57If it was just one person here, I'd have it as a study.
0:03:57 > 0:04:03Then through into the lounge. Here you really get the feeling of this curvature.
0:04:03 > 0:04:05Oh, listen to that.
0:04:05 > 0:04:10Fantastic noise if you bang the wall. That'll annoy the neighbours!
0:04:10 > 0:04:13But not much of the 1920s left,
0:04:13 > 0:04:15apart from this.
0:04:15 > 0:04:19A fantastic fire surround, a nice bit of marble
0:04:19 > 0:04:22and look at that electric fire! Sadly,
0:04:22 > 0:04:25it's probably inefficient, terribly unsafe,
0:04:25 > 0:04:27so unfortunately it will probably have to go.
0:04:27 > 0:04:32What a shame. If you could keep it, I would. Character or what?
0:04:41 > 0:04:46So continuing "round" this flat, quite literally,
0:04:46 > 0:04:49bathroom and loo there.
0:04:49 > 0:04:53Wonderful shape. Love the tiles, they are so 1920s. Again,
0:04:53 > 0:04:58if you could keep those. Change the suite. Keep the tiles if possible.
0:04:58 > 0:05:01Then through to what is, I guess, the master bedroom.
0:05:01 > 0:05:02It's not huge.
0:05:02 > 0:05:05It's just very strangely shaped.
0:05:05 > 0:05:09Lots of light coming in. So, all in all, if you're after a quirky flat,
0:05:09 > 0:05:11in a great location,
0:05:11 > 0:05:13this is it!
0:05:13 > 0:05:19With a guide price of £225,000, that quirkiness doesn't come cheap.
0:05:19 > 0:05:21But it is a pretty smart location.
0:05:21 > 0:05:23# Puttin' on the Ritz. #
0:05:23 > 0:05:27There's a charge for the building management and ground rent
0:05:27 > 0:05:30which works out at £3,480 per year.
0:05:30 > 0:05:32That might seem steep,
0:05:32 > 0:05:38but does include heating bills, hot water, maintenance, lift and porter services.
0:05:38 > 0:05:42Let's ask a local estate agent to step back in time
0:05:42 > 0:05:44and tell us what he thinks of it.
0:05:44 > 0:05:47The location here is an Art Deco gated development.
0:05:47 > 0:05:50It's extremely exclusive, has a very prestigious reputation
0:05:50 > 0:05:52and they don't come up very often.
0:05:52 > 0:05:59The flat being on the curve adds a dimension you wouldn't get in a modern building.
0:05:59 > 0:06:04It's a lot of charm. It's difficult to work with, but you'll end up with something fantastic.
0:06:05 > 0:06:09Bearing in mind that the guide price was 225,000,
0:06:09 > 0:06:12how much is the flat likely to be worth, once done up?
0:06:14 > 0:06:18Once the property is refurbished, I'd expect it to achieve no less than £380,000.
0:06:18 > 0:06:22I would expect it to achieve £400,000 in the current market.
0:06:22 > 0:06:25That could certainly be a tidy profit.
0:06:25 > 0:06:27What could the rental value be?
0:06:27 > 0:06:33If the property was refurbished, I'd expect to achieve £1,300 per calendar month
0:06:33 > 0:06:35to £1,500 per calendar month.
0:06:37 > 0:06:42Well, £225,000 for a two-bed flat does sound like a lot of money.
0:06:42 > 0:06:44But that's what you pay in this part of London.
0:06:44 > 0:06:49I still think it's a good price. Let's see who agreed when it went under the hammer.
0:06:51 > 0:06:53A two-bed purpose-built flat.
0:06:53 > 0:06:57Who'd like to kick off? 300? I think it's worth 300.
0:06:57 > 0:07:00300, anywhere? 250?
0:07:00 > 0:07:02250 down here. 250.
0:07:02 > 0:07:04255.
0:07:04 > 0:07:06260. 265.
0:07:07 > 0:07:10270. 275?
0:07:10 > 0:07:12271? 271?
0:07:13 > 0:07:16271 down here. Nearly missed you.
0:07:16 > 0:07:17272?
0:07:17 > 0:07:19273?
0:07:19 > 0:07:21274? 275?
0:07:21 > 0:07:23276?
0:07:23 > 0:07:26275 down here. Anyone else?
0:07:26 > 0:07:28First time. Second time.
0:07:28 > 0:07:30276.
0:07:30 > 0:07:33Sorry, she just beat you. 276. 277?
0:07:34 > 0:07:36278?
0:07:36 > 0:07:37279.
0:07:37 > 0:07:39280.
0:07:39 > 0:07:41281. 282.
0:07:41 > 0:07:44283. 284.
0:07:44 > 0:07:47285. 286.
0:07:51 > 0:07:53286?
0:07:53 > 0:07:54Yeah? 287.
0:07:54 > 0:07:57288.
0:07:59 > 0:08:02No? 287 down here.
0:08:02 > 0:08:04288. New spot. 289?
0:08:05 > 0:08:08290. 291.
0:08:09 > 0:08:12292? 291 down here.
0:08:12 > 0:08:13292?
0:08:13 > 0:08:16If not, 291, first time,
0:08:16 > 0:08:20second time, third and last time.
0:08:21 > 0:08:23Sold, 291. Well done, madam.
0:08:23 > 0:08:28And the lady keen for a taste of the 1920s was Margaret,
0:08:28 > 0:08:32a nurse and part-time property developer from Hertfordshire.
0:08:32 > 0:08:38She and her husband paid £291,000 for the flat, 66,000 over the guide price.
0:08:39 > 0:08:45- Margaret, congratulations! - Thank you.- You have one of the most unusual flats we've had on the show.
0:08:45 > 0:08:48- Right, OK! - Why did you want to buy it?
0:08:48 > 0:08:52We came to view it before the auction and we liked the style of it,
0:08:52 > 0:08:56the Art Deco style, and we thought it was a good investment.
0:08:56 > 0:09:02- What about the wacky shape? - Yes, we did... No, we like it.
0:09:02 > 0:09:09We think it's a bit unusual. I'm not sure how we'll fit furniture in around the place.
0:09:09 > 0:09:15It'll be a bit of a problem, but we like the unusualness about it.
0:09:15 > 0:09:19Margaret's fairly new to the property developing game,
0:09:19 > 0:09:22but has already successfully developed one nearby.
0:09:22 > 0:09:27She has contacts in the building trade who help her bring them up to scratch.
0:09:28 > 0:09:32I would like to put in new wooden floors,
0:09:32 > 0:09:36but I'm not sure yet. My husband's undecided about wooden floors or carpet.
0:09:36 > 0:09:40But to keep the noise down, we might be forced to put carpets down.
0:09:40 > 0:09:43It would be very clattery for people downstairs.
0:09:43 > 0:09:48- But it would look beautiful. - And there's already a wooden floor in the hall.
0:09:48 > 0:09:51And do you know what's underneath the carpet?
0:09:51 > 0:09:55No, although we've just found some money in the bedroom, under the lino!
0:09:55 > 0:09:57- Money?!- Yes!- What did you find?
0:09:57 > 0:10:00We found a few pounds under the lino!
0:10:00 > 0:10:02There you go! Maybe that's a good sign.
0:10:02 > 0:10:04Maybe, yes!
0:10:04 > 0:10:08Margaret's only just bought the place and is already making money!
0:10:08 > 0:10:10She has a budget of 20,000
0:10:10 > 0:10:15and has given herself three months to get the work done and make it habitable.
0:10:18 > 0:10:20We're looking at putting a new bathroom in
0:10:20 > 0:10:25and half a new kitchen. I like the cupboards on the right-hand side.
0:10:25 > 0:10:27I'm battling with my husband to keep them.
0:10:27 > 0:10:33And we'll put new units on the left-hand side, then general decoration. Nothing structural.
0:10:33 > 0:10:35What about the fireplace?
0:10:35 > 0:10:41The fireplace I'd like to keep. Keep the surround and put a modern fire in the middle.
0:10:41 > 0:10:44The electrical unit is a bit dodgy.
0:10:44 > 0:10:47- It is.- Cute, but... - It doesn't look very safe!
0:10:48 > 0:10:53But it's not just the inside of the flat where improvements will take place.
0:10:53 > 0:10:59Margaret's discovered that the building is to undergo major work in the next two years.
0:10:59 > 0:11:02This includes the addition of underground parking,
0:11:02 > 0:11:04great for the property in the long term.
0:11:04 > 0:11:07But what are the short-term plans?
0:11:08 > 0:11:11Is the idea to sell it on or to rent it out?
0:11:11 > 0:11:15We think to rent it to begin with until all the work is completed.
0:11:15 > 0:11:19And then put it on the market. We might get more for it once the work is completed.
0:11:19 > 0:11:22- Right. So hold it until that time. - Yes.
0:11:22 > 0:11:27And your hopes for the value once the work's been done and you've tarted it up a bit?
0:11:27 > 0:11:31- We hope to get around 400,000 for it.- 400?!- Yes.
0:11:31 > 0:11:34- Wow! That would be a good return. - It would be.
0:11:34 > 0:11:38- Yes.- Congratulations. Good luck with it.
0:11:38 > 0:11:40- I look forward to seeing how you get on.- Thanks.
0:11:40 > 0:11:44Well, Margaret's certainly got a place with lots of character.
0:11:44 > 0:11:47However, with the quirkiness comes a whole set of problems.
0:11:47 > 0:11:50I think she'll find it a challenge to sort this place out.
0:11:50 > 0:11:54Let's see the end results later in the show.
0:11:57 > 0:12:01This is Victoria Park in the Canton area of Cardiff.
0:12:01 > 0:12:05It was created in 1898 to celebrate the Queen's diamond jubilee
0:12:05 > 0:12:09as a recreational space for the working class locals.
0:12:09 > 0:12:13Today, the area has a more multicultural feel
0:12:13 > 0:12:16and since the young arty professionals have moved in,
0:12:16 > 0:12:19it's become an extremely popular place to live.
0:12:23 > 0:12:29And I can see why. You've got acres of this lovely green space right on your doorstep.
0:12:29 > 0:12:31Beautiful Victorian houses
0:12:31 > 0:12:36all around, only just a few minutes from the city centre.
0:12:36 > 0:12:39Just a couple of streets away from Victoria Park
0:12:39 > 0:12:41is the property that was up for auction.
0:12:41 > 0:12:46In estate agents' speak, this is an extremely desirable location
0:12:46 > 0:12:49and the lot itself doesn't look too bad, either.
0:12:49 > 0:12:51It's this imposing mid-terrace,
0:12:51 > 0:12:56currently split into three flats with a guide price of 169,000.
0:12:56 > 0:13:00That seems a lot of property for not a lot of cash
0:13:00 > 0:13:06in such a desirable area. There's even a garage and parking round the back.
0:13:06 > 0:13:10The exterior has retained much of its original Victorian charm.
0:13:10 > 0:13:13But can the same be said of the interior?
0:13:13 > 0:13:17OK. Let's have a look around the ground floor flat.
0:13:17 > 0:13:21I think those beautiful old Victorian tiles in the entrance
0:13:21 > 0:13:24were the last of the Victorian features I'm going to see!
0:13:24 > 0:13:29It's a bit on the shabby side, but you do have two good-sized bedrooms down here.
0:13:29 > 0:13:33A bit of under-stairs storage, which always comes in handy.
0:13:33 > 0:13:37Towards the back of the property, not a bad living space.
0:13:37 > 0:13:40There's already quite a bit of furniture in here.
0:13:40 > 0:13:42It still feels quite spacious.
0:13:42 > 0:13:46It just needs a bit of love, a tidy up, some new carpet.
0:13:46 > 0:13:47A lick of paint.
0:13:47 > 0:13:52Right at the back, we've got a rather disappointing kitchen.
0:13:52 > 0:13:53It's on the small side.
0:13:53 > 0:13:56Then off the kitchen, the bathroom.
0:13:56 > 0:13:58I'm not loving this place.
0:13:58 > 0:14:00It does what it says on the tin,
0:14:00 > 0:14:03but I just think it'll be a good rentable flat.
0:14:03 > 0:14:07Up on the first floor is the other two-bedroomed flat.
0:14:07 > 0:14:13It's slightly more spacious with a bright reception room, the two bedrooms are compact doubles
0:14:13 > 0:14:16and the kitchen and bathroom are very tired and need replacing.
0:14:16 > 0:14:20So everything seems in place for a very straightforward renovation.
0:14:20 > 0:14:22Or does it?
0:14:22 > 0:14:26Flat two definitely feels bigger, with a better sense of flow.
0:14:26 > 0:14:30But guess what this is here?
0:14:30 > 0:14:34That is the entrance to flat number three.
0:14:34 > 0:14:36That is far from ideal.
0:14:36 > 0:14:38It means people living in flat two
0:14:38 > 0:14:41have got to suffer people that want to live up there
0:14:41 > 0:14:43walking through their property.
0:14:43 > 0:14:47I've been wracking my brains to think of how to change the entrance.
0:14:47 > 0:14:49I haven't come up with it yet,
0:14:49 > 0:14:53so whoever buys this property at auction has really got to work on that
0:14:53 > 0:14:55because it's far from ideal.
0:14:55 > 0:14:57In fact, I see it as a bit of a problem.
0:15:01 > 0:15:04The corridor here is very narrow
0:15:04 > 0:15:08so it's tricky to create a private entrance to the top floor flat
0:15:08 > 0:15:11without eating into the footprint of this flat on the first floor.
0:15:11 > 0:15:15But the problem's got to be solved
0:15:15 > 0:15:19as I can't see many potential buyers or tenants
0:15:19 > 0:15:21putting up with the current arrangement.
0:15:21 > 0:15:24Once you've passed that tricky entrance,
0:15:24 > 0:15:26it leads up to a generously sized studio flat
0:15:26 > 0:15:30which again just needs modernisation and TLC.
0:15:30 > 0:15:32I quite like it up here.
0:15:32 > 0:15:34It's a lovely added bonus.
0:15:34 > 0:15:36But let's talk money.
0:15:36 > 0:15:41I've done a bit of digging, and this flat alone could sell for 100,000.
0:15:41 > 0:15:43That is some expensive loft space!
0:15:43 > 0:15:47So if you add on top of that the two flats you have downstairs,
0:15:47 > 0:15:50which are worth roughly 130 grand apiece,
0:15:50 > 0:15:55then the combined value is around 360,000.
0:15:55 > 0:15:59So if you buy for the guide price, spend some cash dolling this place up,
0:15:59 > 0:16:02what you've done is every developer's dream -
0:16:02 > 0:16:05you've doubled your dosh!
0:16:05 > 0:16:07# It makes me smile
0:16:07 > 0:16:10# Yeah, it makes me smile... #
0:16:10 > 0:16:14Those potential figures would bring a smile to anyone's face.
0:16:14 > 0:16:18If you can just sort out that first floor access problem,
0:16:18 > 0:16:20you're onto a winner here.
0:16:20 > 0:16:22Let's see if a local estate agent agrees.
0:16:22 > 0:16:26For the age of the property, the condition is very good.
0:16:26 > 0:16:30The roof's been changed, the rendering's been renewed.
0:16:30 > 0:16:33The front is well presented, all the windows changed.
0:16:33 > 0:16:35Interior-wise, it's a coat of paint.
0:16:35 > 0:16:39So it's a really good property. In fact, a hot property.
0:16:39 > 0:16:45Once brought up to modern standards, these flats should all have excellent rental potential.
0:16:45 > 0:16:52I would say that the ground floor and first floor in the region of 625 to 650 a month.
0:16:52 > 0:16:57The studio apartment, I'd say around 450 to 475.
0:16:57 > 0:17:02Nice letters. They need to be dressed, furnished, and you'll get some stylish tenants.
0:17:02 > 0:17:07That's a very healthy rental income of over 21,000 a year.
0:17:08 > 0:17:12With a guide price of 169,000,
0:17:12 > 0:17:15that makes this place a potential goldmine.
0:17:15 > 0:17:21Once renovated, what could the flats be worth on the open market?
0:17:21 > 0:17:26I view the ground floor as being in the region of 130 to £140,000.
0:17:26 > 0:17:28The first floor, same again.
0:17:28 > 0:17:31And the studio, round about 100,000.
0:17:31 > 0:17:36With a total value of around 360,000,
0:17:36 > 0:17:39the new owner could be quids in here.
0:17:41 > 0:17:43This is a chance to buy three flats
0:17:43 > 0:17:46in an extremely sought-after location
0:17:46 > 0:17:48at a fraction of their true value.
0:17:48 > 0:17:50There's work to be done,
0:17:50 > 0:17:52but this could be a chance to pull off a trick
0:17:52 > 0:17:56that's increasingly rare in this downtrodden market.
0:17:56 > 0:17:58You know - make a quick buck!
0:17:58 > 0:18:00Let's see who went for it at the auction.
0:18:03 > 0:18:07This property was one of the last auction lots to be sold.
0:18:07 > 0:18:11So by the time it came up, most bidders had already called it a day.
0:18:12 > 0:18:17Less competition can mean a better chance of getting a property bargain.
0:18:17 > 0:18:19There's been quite a lot of interest in this one.
0:18:19 > 0:18:23175,000 to start me. It's not asking a lot.
0:18:23 > 0:18:25170, then. Let's get on.
0:18:25 > 0:18:28It's got to be worth more than that.
0:18:28 > 0:18:30170. 160? Thank you, sir.
0:18:30 > 0:18:34160 bid. At 160. It's worth more than that.
0:18:34 > 0:18:36Percy, two. Two is bid. Thank you. Four.
0:18:36 > 0:18:40You're out, sir. Six. Thank you. 166.
0:18:40 > 0:18:44At 166. Eight, thank you. 168.
0:18:44 > 0:18:46At 168 in front of me.
0:18:46 > 0:18:47At 168.
0:18:47 > 0:18:51At £168,000. 70, thank you.
0:18:51 > 0:18:53At 170 there.
0:18:53 > 0:18:55You saw that bid. One, then, all right. One.
0:18:55 > 0:18:58171. Two is bid.
0:18:58 > 0:18:59Thank you. Three is bid.
0:18:59 > 0:19:04173. 174. You're still out, sir.
0:19:04 > 0:19:06At 174. Five.
0:19:06 > 0:19:09At 175. Six is bid.
0:19:09 > 0:19:14At 176. Please bid as quickly as him. Seven. 177.
0:19:14 > 0:19:16178 on my right.
0:19:16 > 0:19:19One more might do it, sir. You've been in all the way.
0:19:19 > 0:19:23There is the bid, though, at £178,000.
0:19:23 > 0:19:26It's yours, sir. Thank you.
0:19:26 > 0:19:29The new owner of the property is local lad Gareth.
0:19:29 > 0:19:33Although he's got some experience of developing,
0:19:33 > 0:19:37this is going to be by far his biggest project.
0:19:37 > 0:19:41- Congratulations.- Thanks.- Well done. You paid £178,000 at auction.
0:19:41 > 0:19:44- Yes. Really happy. - How much would you have paid?- Um,
0:19:44 > 0:19:48- I'd have probably gone up to 200, actually.- Really?
0:19:48 > 0:19:51- I think I've got a good deal. - What's your background?
0:19:51 > 0:19:59I've recently been working for a company, managing accounts for security products.
0:19:59 > 0:20:02Before that I was a diving instructor.
0:20:02 > 0:20:06So travelling around the world, where I met my partner.
0:20:06 > 0:20:09Then we decided to get serious and come back to the UK.
0:20:09 > 0:20:13- Much more glamorous than property developing, Gareth!- Yes.
0:20:17 > 0:20:24Gareth's already renovated a one-bed flat and I can see exactly why he's made this his next project.
0:20:24 > 0:20:29It's perfect for him to dive right into the ocean of property development.
0:20:30 > 0:20:35There's enough that I can get stuck in. Enough that I can do myself.
0:20:35 > 0:20:39The ground floor is obviously just basically a renovation.
0:20:39 > 0:20:41Simple renovation, as is the top floor.
0:20:41 > 0:20:47The interesting concept is what's going to happen on the first floor.
0:20:47 > 0:20:50I'm still not too sure what I'm going to do with it.
0:20:50 > 0:20:54- Oh!- I've got a planner who's going to come and help me.
0:20:54 > 0:20:57We're looking at either two studio flats
0:20:57 > 0:21:03or possibly see if we can extend it back into a two-bedroomed flat
0:21:03 > 0:21:06but without having to go through the hallway.
0:21:06 > 0:21:11So Gareth's thinking of turning this two-bed flat on the first floor
0:21:11 > 0:21:13into two separate studio flats.
0:21:15 > 0:21:18By doing that, he'd create a private access to the top floor flat.
0:21:19 > 0:21:24But it's quite a drastic move and does rely on getting planning permission to do it.
0:21:26 > 0:21:30Ideally, it would be much easier for me to leave it as a two-bed flat
0:21:30 > 0:21:34because the gas, utilities, are all split into three.
0:21:34 > 0:21:38So adding another studio will mean I'll have to split it again.
0:21:38 > 0:21:41It's more hassle and more cost.
0:21:41 > 0:21:46So, Gareth, if you don't get permission to create another flat in this building,
0:21:46 > 0:21:51you've got to think about moving that doorway to the studio flat,
0:21:51 > 0:21:56- that entrance.- That is going to be the problematic issue.
0:21:56 > 0:21:59I'm going to go for the studio flats on the first floor,
0:21:59 > 0:22:01see if I can get the planning.
0:22:01 > 0:22:04Failing that, then that'll be Plan B!
0:22:05 > 0:22:09You know, it's really bugging me because I've been wracking my brains
0:22:09 > 0:22:12thinking there must be a way. I've seen so many houses.
0:22:12 > 0:22:15I can't come up with a solution to help you out. Sorry about that!
0:22:15 > 0:22:18It's a shame as I was hoping you could!
0:22:18 > 0:22:22I know! I can't think of a way of how you can do it, even turning the stairs around.
0:22:22 > 0:22:25It's certainly a tricky one to solve
0:22:25 > 0:22:28but the success of the whole development depends on it.
0:22:28 > 0:22:35Gareth's given himself four months and an overall budget target of 60 grand.
0:22:35 > 0:22:38It sounds like he's going to dive right in.
0:22:38 > 0:22:42How into the renovations are you? Are you going to get stuck in?
0:22:42 > 0:22:45- Absolutely, yeah.- Really? - Filthy, top to bottom.
0:22:45 > 0:22:49No, I like it. I love getting stuck in and just...
0:22:49 > 0:22:52I mean, I can do the ripping out, that I can do.
0:22:52 > 0:22:55I can do some tiling and bits and bobs.
0:22:55 > 0:22:58So I'll be doing a lot of it myself.
0:22:58 > 0:23:02- Not bad going for a diving instructor!- Yeah.- I'm impressed!
0:23:02 > 0:23:04Gareth, good luck with this project.
0:23:04 > 0:23:08- It'll be interesting to see the outcome.- Thanks very much.
0:23:10 > 0:23:14I am delighted for Gareth. This is a great investment.
0:23:14 > 0:23:17But those stairs will really affect his plans.
0:23:17 > 0:23:21Will he manage to swing them round or will his budget have to escalate?
0:23:21 > 0:23:24Find out what happens later on in the programme.
0:23:25 > 0:23:29Coming up: am I setting myself up for a fall in Stockport?
0:23:29 > 0:23:32From the outside, it looks pretty good.
0:23:32 > 0:23:34Let's hope the inside matches our expectations.
0:23:35 > 0:23:41It's not good news when the survey results arrive for this Victorian terrace in Cardiff.
0:23:41 > 0:23:45He informed us that pretty much every room was substantially damp.
0:23:47 > 0:23:52But first, someone's been creating a stir in west London.
0:23:52 > 0:23:55If we made too much noise, we did get a lot of complaints.
0:23:57 > 0:24:01Back to the London borough of Hammersmith and Fulham
0:24:01 > 0:24:08where Margaret from Hertfordshire paid £291,000 for a two-bedroomed flat
0:24:08 > 0:24:10in this exclusive 1920s development.
0:24:12 > 0:24:17It looked as though it hadn't been updated since the halcyon days of the Art Deco era
0:24:17 > 0:24:21and the whole flat was built in an unusual curved shape.
0:24:21 > 0:24:27- What about this wacky shape?- We like it. We think it's a bit unusual.
0:24:27 > 0:24:32I'm not sure how we're going to get furniture fitted in around the place.
0:24:32 > 0:24:37It'll be a bit of a problem, but no, we like the unusualness about it.
0:24:37 > 0:24:41The curved flat spanned out from the entrance hall.
0:24:41 > 0:24:44It had a tiny second bedroom, original 1920s kitchen
0:24:44 > 0:24:48and a reasonably sized living room with a cute but hazardous fire.
0:24:48 > 0:24:52There was also a very dated bathroom with lovely original tile work
0:24:52 > 0:24:55and a pretty but small master bedroom.
0:24:55 > 0:24:57It's now five months since we saw the place.
0:24:57 > 0:25:00Let's see if it's still stuck in a time warp
0:25:00 > 0:25:03or if it's been brought successfully up to date.
0:25:07 > 0:25:10# If you're blue and you don't know where to go to
0:25:10 > 0:25:12# Why don't you go where fashion sits
0:25:13 > 0:25:15# Putting on the Ritz. #
0:25:18 > 0:25:23In the kitchen we've ripped out most of the units to the left-hand side.
0:25:23 > 0:25:27We've replaced them, mainly, to the left-hand side to give space.
0:25:27 > 0:25:33We've painted, re-tiled, put a new sink in,
0:25:33 > 0:25:35a washer-drier, new oven, hob.
0:25:35 > 0:25:39We've made a little breakfast bar, retiled the floor
0:25:39 > 0:25:40and re-done the plumbing.
0:25:50 > 0:25:54With the fireplace, we decided to keep the original surround.
0:25:54 > 0:25:59The inset was all cracked marble with an old two-bar electric fire.
0:25:59 > 0:26:03So we've replaced the marble with just porcelain tiles
0:26:03 > 0:26:06and put a new fire in the centre.
0:26:06 > 0:26:12Margaret and her husband have achieved a really sympathetic restoration here.
0:26:12 > 0:26:17Although the place is now very modern with everything necessary for contemporary living,
0:26:17 > 0:26:20they've been true to the style of the original development.
0:26:20 > 0:26:24To begin with, we had to rewire.
0:26:24 > 0:26:28We had to replumb. The pipes had to be broken out from the wall, replaced.
0:26:28 > 0:26:33That was quite a big job. We hadn't anticipated that before we started.
0:26:33 > 0:26:35So that was quite a cost.
0:26:35 > 0:26:41We've done the papering, painting, and tried to put a bit of character
0:26:41 > 0:26:44into the place to make it in the Art Deco style.
0:26:44 > 0:26:48Looking around, it's very much black and shiny and silver.
0:26:48 > 0:26:51So that's what we've tried to do.
0:26:53 > 0:26:56The project has largely gone to plan.
0:26:56 > 0:27:02However, the plumbing was more complicated than anticipated and cost an extra £8,000.
0:27:03 > 0:27:07It also turned out to be quite a challenge not to disturb the neighbours.
0:27:07 > 0:27:13Noise was probably the most difficult thing. If we were noisy we got complaints from neighbours.
0:27:13 > 0:27:15So we had to be aware of that.
0:27:15 > 0:27:19But apart from that, it was quite an easy project to do.
0:27:19 > 0:27:22We've come more or less to budget, even with the plumbing.
0:27:22 > 0:27:27We said 20 to 25,000 and we've managed to keep it to the 25,000 mark.
0:27:27 > 0:27:32We had a late start as we had to get permission to do the works with the management committee.
0:27:32 > 0:27:37We had to get permission to make the noise. We could only work Monday to Friday.
0:27:37 > 0:27:40So it did hold us back a little bit,
0:27:40 > 0:27:44but we're not too bad out of the time. Just under five months.
0:27:46 > 0:27:50The whole building is also undergoing some communal improvement
0:27:50 > 0:27:53including underground parking for all the flats.
0:27:53 > 0:27:56This will really enhance the long-term prospects here
0:27:56 > 0:27:59and I think Margaret's really fallen for the place.
0:28:00 > 0:28:07We would like to move into the property but we have a property elsewhere that we live in.
0:28:07 > 0:28:11But to be in London, that's why we've enjoyed the project so much.
0:28:11 > 0:28:16It's been nice being in London and taking advantage of all the facilities.
0:28:16 > 0:28:19So we don't know. We might do.
0:28:19 > 0:28:22Time for the moment of truth.
0:28:22 > 0:28:24Has Margaret's hard work paid off?
0:28:25 > 0:28:29Let's ask two local estate agents for the low-down.
0:28:29 > 0:28:34'My first impression of the property is they've done a really good job'
0:28:34 > 0:28:38compared to when I first saw it. It's immaculate, the finish is good,
0:28:38 > 0:28:39complementary to the flat.
0:28:39 > 0:28:45I love the tones, the colours they've put in. They carpets are matched.
0:28:45 > 0:28:48The fittings are wonderful, the wardrobes are beautiful.
0:28:48 > 0:28:52The kitchen and bathroom stand out. They've done a very good job.
0:28:52 > 0:28:56The flat cost £291,000 at auction.
0:28:56 > 0:29:00Added to the renovation budget of 25,000,
0:29:00 > 0:29:03the total outlay is £316,000.
0:29:03 > 0:29:06Will the investment pay off?
0:29:06 > 0:29:09I think the value is in the region of £380,000.
0:29:09 > 0:29:13I would look to market it at £400,000 to achieve that figure.
0:29:13 > 0:29:17If this property came to the market, I'd bring it on at £430,000
0:29:17 > 0:29:20and expect an offer quite close to that.
0:29:20 > 0:29:22That's quite a range of valuations.
0:29:22 > 0:29:25But even so, if they choose to sell,
0:29:25 > 0:29:32Margaret and her husband could make a pre-tax profit of between 64 and £114,000,
0:29:32 > 0:29:35minus the usual selling fees, of course.
0:29:35 > 0:29:39We sort of thought probably around the £400,000 mark,
0:29:39 > 0:29:42so that's probably quite a good cross-section.
0:29:42 > 0:29:44Yes. Obviously the higher end is better!
0:29:44 > 0:29:47Surely a flat like this in this part of London
0:29:47 > 0:29:49would be perfect to rent out.
0:29:51 > 0:29:56If this property came to the rental market, I would hope to achieve £1,500 per calendar month.
0:29:56 > 0:29:59This flat, if it came to the rental market,
0:29:59 > 0:30:02would achieve £1,800 per calendar month.
0:30:02 > 0:30:06Ooh, that is quite a difference. We thought about 1,600 a month
0:30:06 > 0:30:08as there's quite a big service charge
0:30:08 > 0:30:11and we believe the landlord takes the service charge.
0:30:11 > 0:30:15Yes, so 1,600 a month is what we thought, so it's not too bad.
0:30:15 > 0:30:18Again, the higher end would be better!
0:30:26 > 0:30:30Now the hard work is over and Margaret and her husband know what the flat is worth,
0:30:30 > 0:30:34they must decide whether to rent it out, sell or move in themselves.
0:30:36 > 0:30:40It's possible we might think about living here for a few weeks
0:30:40 > 0:30:44just to see if maybe in the future we'd like to stay in London.
0:30:44 > 0:30:48But I think we'll probably do the rental market for the time being
0:30:48 > 0:30:51and wait until the building work is finished on the block
0:30:51 > 0:30:54and see how it goes from there.
0:30:59 > 0:31:04I'm in Stockport, six miles south-east of Manchester.
0:31:04 > 0:31:08It's a town which was once very much ahead of the game.
0:31:08 > 0:31:12Stockport was once the centre of the UK hatting industry.
0:31:12 > 0:31:14At its height in 1884,
0:31:14 > 0:31:18it was exporting over six million hats.
0:31:18 > 0:31:22Sadly, the last hat factory closed in the late 1990s
0:31:22 > 0:31:27but the local football team, Stockport County, are still known as The Hatters.
0:31:29 > 0:31:35Another claim to fame is that the film character Indiana Jones wore a hat made in Stockport.
0:31:35 > 0:31:39Let's hope I'm not about to take a last crusade into a temple of doom!
0:31:39 > 0:31:43I'm here to see a two-bed mid-terrace.
0:31:43 > 0:31:46The guide price was 65,000 quid. This is it.
0:31:46 > 0:31:48From outside it looks pretty good.
0:31:48 > 0:31:51Let's hope the inside matches our expectations.
0:31:53 > 0:31:55So, does it?
0:31:55 > 0:31:58Actually, looking pretty good so far.
0:31:58 > 0:32:00I like the fact there's a porch area here
0:32:00 > 0:32:03and through into the front living room.
0:32:03 > 0:32:05The carpet's a bit dirty, but apart from that,
0:32:05 > 0:32:10I'm already thinking this is just a lick of paint to sort it out.
0:32:10 > 0:32:13Through to this rear living room area.
0:32:13 > 0:32:16Interesting fire. It's been modernised at some stage.
0:32:16 > 0:32:21It's fairly open plan, stairs up there and space under the stairs as well.
0:32:21 > 0:32:24This has been thought through. Somebody's restored this.
0:32:24 > 0:32:26Does it continue in the kitchen?
0:32:26 > 0:32:29Yeah, it does. Fantastic. Look at that.
0:32:29 > 0:32:33Already I'm seeing you could pretty much move in to it as it is.
0:32:35 > 0:32:39Out back is a small fully-paved yard.
0:32:39 > 0:32:43It seems like a novel place for an extra bedroom, if you ask me!
0:32:43 > 0:32:45But it just needs tidying.
0:32:45 > 0:32:49You'd have to see to the gutters and give them a good clear out.
0:32:49 > 0:32:54But the main roof looks pretty sound and the windows are recently double-glazed.
0:32:57 > 0:33:01Good news upstairs? A big bedroom at the front there.
0:33:01 > 0:33:05It's a good-sized space. Good news the bathroom and toilet are up here, too.
0:33:05 > 0:33:08Then a slightly smaller second bedroom.
0:33:08 > 0:33:12Again, it needs tidying up. Get some nice wallpaper on the walls.
0:33:12 > 0:33:16Sort out the carpet and certainly get the boiler checked out.
0:33:16 > 0:33:22But apart from that, again, not a lot of work to get this place very desirable.
0:33:22 > 0:33:25Time to hear if a local estate agent agrees.
0:33:25 > 0:33:28These properties were built around 1910.
0:33:28 > 0:33:33Traditional brick built, slate roof, garden fronted.
0:33:33 > 0:33:36It's in fairly good condition. Only decorating required.
0:33:36 > 0:33:38Double-glazed uPVC windows,
0:33:38 > 0:33:42nice bathroom, nice kitchen, so it would make a great renter
0:33:42 > 0:33:44or it would equally sell well.
0:33:44 > 0:33:46It all sounds good so far.
0:33:46 > 0:33:49Bearing in mind the guide price of 65,000
0:33:49 > 0:33:52what sort of income could the property earn on the rental market?
0:33:54 > 0:33:56If we were renting this property out,
0:33:56 > 0:34:00we'd expect to achieve around £475 per calendar month.
0:34:00 > 0:34:04Once it's been freshened up, what could the resale value be?
0:34:04 > 0:34:08If we were selling this property, we'd expect to get around £90,000.
0:34:08 > 0:34:12It might not be the most exciting property in the world,
0:34:12 > 0:34:15but I think this is potentially a great little earner.
0:34:15 > 0:34:21Get it for anything like the guide price, get a rent of 450 to £475 a calendar month,
0:34:21 > 0:34:25and you could be on for a very serious yield of eight, nine, ten per cent.
0:34:25 > 0:34:29Let's see who spotted the opportunity when it went under the hammer.
0:34:31 > 0:34:33The guide price is 65,000.
0:34:34 > 0:34:36Start me off. Give me 65.
0:34:36 > 0:34:4065 I'm looking for. Give me 60, then, and we're away.
0:34:40 > 0:34:4560. 60,000 I have. Gentleman's bid at the back at £60,000.
0:34:45 > 0:34:4762 I'm looking for.
0:34:47 > 0:34:5061, if it helps. 61. 61,000, then.
0:34:50 > 0:34:5261 at the back. Do we see 62?
0:34:52 > 0:34:53Against you at 62.
0:34:53 > 0:34:5663? 63. 64.
0:34:56 > 0:34:58At 64. 65?
0:34:58 > 0:35:01At 65, now. 65,000, to the rear of the room.
0:35:01 > 0:35:0265,000.
0:35:02 > 0:35:04At 65. 66?
0:35:04 > 0:35:0866. 67? 67 anywhere? 66 I have, then.
0:35:08 > 0:35:1067 I'll take.
0:35:10 > 0:35:1267,000?
0:35:12 > 0:35:14At 67. 67,000. 68?
0:35:14 > 0:35:1768. 68,000. 69?
0:35:17 > 0:35:19You're out at the back now.
0:35:19 > 0:35:21You're out. At 69,000. 69 I'm bid.
0:35:21 > 0:35:2370 I'll take.
0:35:23 > 0:35:2670,000. At £70,000, then. At 71?
0:35:26 > 0:35:3070,500. Good grief, here we go. 70,500. 71 at the back?
0:35:30 > 0:35:3371.
0:35:33 > 0:35:3671. 71,500. 71,500. 72.
0:35:36 > 0:35:3772. 72,500.
0:35:37 > 0:35:41No? 72,250.
0:35:41 > 0:35:4572,500. Same to you. 72,500. 72,500. Are you out?
0:35:45 > 0:35:47You're out. OK. It's in the market.
0:35:47 > 0:35:5072,500 for the first time.
0:35:50 > 0:35:5372,500 for the second time.
0:35:53 > 0:35:55Excuse me.
0:35:55 > 0:35:5773. At 73,000.
0:35:57 > 0:35:5973,500?
0:35:59 > 0:36:0173,500. 74?
0:36:01 > 0:36:0473,500, then, at the back.
0:36:04 > 0:36:06First time at 73,500.
0:36:06 > 0:36:10Second time at 73,500. Are we all done?
0:36:10 > 0:36:13Right at the back. 73,500.
0:36:15 > 0:36:20The only bidder willing to pay 73,500 for the terraced house
0:36:20 > 0:36:22was Gary.
0:36:22 > 0:36:25He runs an engineering consultancy firm
0:36:25 > 0:36:28but invests in rental properties as a sideline.
0:36:28 > 0:36:31He's been on Homes Under The Hammer before
0:36:31 > 0:36:35when he bought a two-bed terrace in nearby Salford.
0:36:35 > 0:36:39I met him back at his new house in Stockport to hear how he's been getting on.
0:36:41 > 0:36:43- Gary, good to see you - again! - Likewise, Martin!
0:36:43 > 0:36:47Congratulations on another purchase. Your property empire is expanding.
0:36:47 > 0:36:52- Slowly but surely.- Before we move on to this, how did the last place go?
0:36:52 > 0:36:55OK, in the end. Soon after the filming,
0:36:55 > 0:36:58we got a tenant in, there was quite a demand, actually.
0:36:58 > 0:37:02We got a tenant interested, carried out the usual checks
0:37:02 > 0:37:06and she moved in with a young family and it was let.
0:37:06 > 0:37:10- That's sorted, restored, boxed off, tenant in, move on to the next. - Exactly.
0:37:10 > 0:37:15At the moment there's a lot of demand for rental properties particularly round Manchester.
0:37:15 > 0:37:17What do you put that down to?
0:37:17 > 0:37:21A lot of it's obviously to do with the issue of finance,
0:37:21 > 0:37:24people not being able to get mortgages.
0:37:24 > 0:37:29It's a lot easier. People tend to be going the European way, as I call it,
0:37:29 > 0:37:34maybe renting rather than buying, maybe buy later on in life.
0:37:34 > 0:37:37Which, as a landlord, really suits my business plan.
0:37:39 > 0:37:41Gary's certainly a man with a mission.
0:37:41 > 0:37:47He only started in the property game a year ago, but has already built up a considerable portfolio.
0:37:47 > 0:37:52He looks for exactly this kind of property in popular rental areas,
0:37:52 > 0:37:56tidies them up and puts them back on the rental market as soon as possible.
0:37:56 > 0:37:59That formula works very well for him.
0:38:00 > 0:38:05It fitted the bill in terms of price and, when I came to see it,
0:38:05 > 0:38:07the amount of work that's not required.
0:38:07 > 0:38:11Let's face it, the ideal property for me, a lick of paint,
0:38:11 > 0:38:15new carpets here and there, but in the main, everything's there.
0:38:15 > 0:38:18The gas central heating's been done. Double glazed.
0:38:18 > 0:38:23It ticks all the right boxes. I've got a decorator coming in next week.
0:38:23 > 0:38:27He's had a look, given me a price and he's starting on Monday.
0:38:27 > 0:38:31- He'll be finished by Friday.- What quote have you got for decorating?
0:38:31 > 0:38:37- £800.- To paint it top to bottom? - Yeah, all told.- Gosh!
0:38:37 > 0:38:40- That's woodwork and walls as well. - Really?- Quite good.
0:38:40 > 0:38:43- That's a good deal! - I can't complain at that!
0:38:43 > 0:38:48- You won't tell his name! - I can if you want - for a price!
0:38:48 > 0:38:52Gary's definitely a shrewd businessman.
0:38:52 > 0:38:54With a portfolio of properties behind him,
0:38:54 > 0:38:59he's built up contracts with tradesmen who work for him at rock bottom prices.
0:38:59 > 0:39:03But he's changed his strategy. When we last met him in Salford,
0:39:03 > 0:39:07he was doing all the work himself to keep costs down.
0:39:09 > 0:39:14You're wasting valuable time. It took me a lot longer to do it myself than to get a guy in.
0:39:14 > 0:39:18I pay a reasonable rate for decorating and I can get it marketed very quickly.
0:39:18 > 0:39:22So in total, your budget. 800 quid for painting and decorating.
0:39:22 > 0:39:25And somebody who's doing it day in, day out,
0:39:25 > 0:39:29is probably going to do a better job than you or I would do.
0:39:29 > 0:39:32- Are you knocking my decorating? - I'm sure it's marvellous!
0:39:32 > 0:39:36- But professionals are that, aren't they?- It goes without saying.
0:39:36 > 0:39:39He'll do a good job. And a lot quicker than what I would.
0:39:39 > 0:39:43So the budget. What else do you have to spend? Carpets.
0:39:43 > 0:39:49Cleaning. I might have to replace some. There are stains from animals living here. Apart from that,
0:39:49 > 0:39:52a bit of cleaning, gas safety inspection checks,
0:39:52 > 0:39:55the usual things you do as landlords.
0:39:55 > 0:40:01- But your preliminary budget can't be more than two grand?- I've estimated around 1,750, tops,
0:40:01 > 0:40:04to get it up and running to a habitable condition.
0:40:06 > 0:40:09While the two-bed terrace is empty, it's costing Gary money.
0:40:09 > 0:40:13So he can't afford to spend a lot of time preparing the place.
0:40:13 > 0:40:17His plan is to finish it and get tenants in within just five weeks.
0:40:22 > 0:40:24After this, what's the plan?
0:40:24 > 0:40:26The plan is to just keep going for it.
0:40:26 > 0:40:31I attend auctions regularly to get a good idea of what's coming up.
0:40:31 > 0:40:33The plan is to carry on going
0:40:33 > 0:40:37and eventually, if I can do one a month, then I'll be happy with that.
0:40:37 > 0:40:40I'd love to do this as a full-time job.
0:40:40 > 0:40:45I enjoy doing it. You meet lots of interesting people.
0:40:45 > 0:40:47You get to lots of different places
0:40:47 > 0:40:51and I fully recommend it as a career, hopefully my career!
0:40:51 > 0:40:55- I suspect it won't be the last time we see you!- Hopefully not.
0:40:55 > 0:40:58- Good luck with this. We'll see how you get on.- Thank you.
0:40:58 > 0:41:03Gary seems to have got himself another good property here
0:41:03 > 0:41:06and he makes it look very easy, doesn't he?
0:41:06 > 0:41:09But will it really run that smoothly?
0:41:09 > 0:41:13Will he get it sorted in five weeks for that very small budget?
0:41:13 > 0:41:16You can find out later in the show!
0:41:18 > 0:41:22It's been many months since we saw those properties.
0:41:22 > 0:41:25Have the renovations been plain sailing or bumpy rides?
0:41:25 > 0:41:27Let's go back and find out.
0:41:31 > 0:41:35Back to the Victoria Park area of Cardiff now,
0:41:35 > 0:41:38where diving instructor turned property developer Gareth
0:41:38 > 0:41:42had bought this terraced house for 78,000.
0:41:42 > 0:41:47It was converted into three flats and his plan was to do them up to rent out.
0:41:49 > 0:41:55The ground and first floor consisted of two good-sized two-bed flats.
0:41:55 > 0:41:57The main issue was with the top floor flat.
0:41:57 > 0:42:01You could only access it by going through the first floor flat,
0:42:01 > 0:42:05which was never going to work if the flats were to be rented out separately.
0:42:05 > 0:42:09As far as I could see, there was no quick fix to this problem.
0:42:09 > 0:42:13I've been wracking my brains thinking, "There must be a way!"
0:42:13 > 0:42:19I've seen so many houses, and I can't come up with a solution to help you out! Sorry about that!
0:42:19 > 0:42:22- Shame! I was hoping you could! - I know!
0:42:22 > 0:42:27Well, all that was 13 months ago. Let's see how Gareth's been getting on.
0:42:30 > 0:42:33It's not looking so great outside
0:42:33 > 0:42:35and the work is still very much in progress -
0:42:35 > 0:42:42because he's discovered that the house had never had planning permission to be converted to flats.
0:42:42 > 0:42:47When we went for planning to adjust the passageway,
0:42:47 > 0:42:51we found out it didn't have planning for the three flats.
0:42:51 > 0:42:55So we had to resubmit. Unfortunately, that took about eight months.
0:42:55 > 0:43:00So the project was put on hold. Luckily I had other projects in the area to drop onto.
0:43:00 > 0:43:07So when the planning came back in, we were able to start straight back up on it.
0:43:07 > 0:43:09Gareth's certainly been making up for lost time.
0:43:11 > 0:43:16The work is still ongoing, but you can see he's going for a top-class finish.
0:43:19 > 0:43:24Unfortunately, the ground floor flat had unforeseen damp problems
0:43:24 > 0:43:27which did create some extra work.
0:43:27 > 0:43:31We knew that there were some issues in some corners of the rooms
0:43:31 > 0:43:37and when the specialist came out, he informed us that every room was substantially damp.
0:43:37 > 0:43:41And we had the entire property damp-proofed.
0:43:41 > 0:43:46It's a long-term project, and I'd rather not have to deal with this in the future
0:43:46 > 0:43:47so we just did it.
0:43:49 > 0:43:52The first floor flat is progressing well.
0:43:52 > 0:43:56But what about that tricky access issue?
0:43:56 > 0:44:00How did Gareth solve the problem of getting to the top floor flat
0:44:00 > 0:44:03without having to traipse through the middle flat?
0:44:03 > 0:44:09Well, he created two corridors side by side. One is the entrance to the top floor flat,
0:44:09 > 0:44:15the other an internal passageway that accesses the bedrooms to the first floor flat.
0:44:15 > 0:44:18To make the top floor accessible as a separate flat,
0:44:18 > 0:44:21we had to develop this passageway.
0:44:21 > 0:44:24The problem with that is we lost some space off this bedroom
0:44:24 > 0:44:26but it's worked out quite well.
0:44:26 > 0:44:32Gareth's right that the new passageway has compromised the size of the second bedroom on this floor.
0:44:32 > 0:44:37But I can see that this was his only option, and I think he's made the right move.
0:44:37 > 0:44:43We had another idea, to create two one-bed flats on the first floor.
0:44:43 > 0:44:47However, we were lacking on the space on the rear flat.
0:44:47 > 0:44:49We couldn't quite squeeze another flat in.
0:44:49 > 0:44:53So we chose to go with the two-bed flat on the first floor.
0:44:53 > 0:44:56As I said, we have lost a bit of space off one of the bedrooms,
0:44:56 > 0:44:59but I think it's worked out for the best.
0:45:00 > 0:45:06But it's actually the top floor studio flat where Gareth's excelled himself.
0:45:09 > 0:45:14Basically, we decided to move the kitchen from next door into this room.
0:45:14 > 0:45:18It's quite a small room, but I think it works quite well.
0:45:18 > 0:45:22As you see with the beams, it makes it quite quirky.
0:45:22 > 0:45:24But I really like it.
0:45:24 > 0:45:29This means that where the kitchen was is now a bedroom.
0:45:29 > 0:45:34And by adding a tiny shower room, Gareth's really made the most of the space up here.
0:45:36 > 0:45:38Although there's a bit of work to do still,
0:45:38 > 0:45:41he's completely transformed these flats.
0:45:44 > 0:45:48The planning delays he's suffered have inevitably driven up his costs,
0:45:48 > 0:45:53and he's had to do a lot more than he originally anticipated to make this a sound investment.
0:45:53 > 0:45:59When we re-submitted the plans and they said there were new regulations for soundproofing,
0:45:59 > 0:46:05so we had a project manager come out, have a look and give us some good advice.
0:46:05 > 0:46:09We did slightly over-engineer, because we didn't want to have to go back
0:46:09 > 0:46:12if the sound test failed.
0:46:12 > 0:46:15So we've basically put a lot of soundproofing in
0:46:15 > 0:46:21and the heat is a benefit as well, the insulation will be pretty good in all the flats now.
0:46:21 > 0:46:27When we turned all the boilers on, we found the flats heated up very quickly
0:46:27 > 0:46:31so we found ourselves opening windows in mid-December
0:46:31 > 0:46:33because the insulation was so good!
0:46:33 > 0:46:37So the environmentalists will be happy about that!
0:46:37 > 0:46:40The original budget, we said about 60,000.
0:46:40 > 0:46:45Obviously because of the soundproofing, that's pushed it up.
0:46:45 > 0:46:49It's gone up considerably. It's in the region of about 90,000 now.
0:46:50 > 0:46:54Added to the purchase price of 178,000,
0:46:54 > 0:46:56that means Gareth's total spend so far
0:46:56 > 0:47:00is £268,000.
0:47:00 > 0:47:05So has he made money or lost it? Time for some expert opinions.
0:47:05 > 0:47:08It's virtually 80, 85% done.
0:47:08 > 0:47:12First impressions from the road, with scaffolding, it's still being finished off.
0:47:12 > 0:47:18But hopefully the finishes of the kitchens and bathrooms will be to a standard expected for the area.
0:47:18 > 0:47:20I think it's done to a very high standard.
0:47:20 > 0:47:24Finishing off to do, but what's been done is to a very good standard.
0:47:25 > 0:47:32Don't forget that Gareth blew his budget here and spent an extra £30,000.
0:47:32 > 0:47:34Was that the correct strategy?
0:47:34 > 0:47:37I would market the top floor flat for £99,950.
0:47:37 > 0:47:41In my opinion, the top floor apartment is worth 99,950.
0:47:41 > 0:47:46It seems that turning this studio flat into a one-bedroomed flat
0:47:46 > 0:47:48was the right decision.
0:47:48 > 0:47:50What about the two-bed first floor flat?
0:47:50 > 0:47:56The first floor flat, in my opinion, could sell for £125,000.
0:47:56 > 0:48:01I'd put the middle flat on the market for £119,950.
0:48:01 > 0:48:05Even though Gareth had to shrink that second bedroom,
0:48:05 > 0:48:08he could still make a decent profit on the first floor flat.
0:48:08 > 0:48:11How much could the ground floor flat be worth?
0:48:11 > 0:48:15The ground floor apartment which has the garage and rear garden
0:48:15 > 0:48:20in my opinion is worth in the region of £135,000.
0:48:20 > 0:48:24I'd put the ground floor flat on the market for £129,000.
0:48:24 > 0:48:27That means the combined value of all three flats
0:48:27 > 0:48:30is around £354,500.
0:48:33 > 0:48:37Bearing in mind Gareth's total spend is 268,000,
0:48:37 > 0:48:41he could stand to make a profit of £86,500,
0:48:41 > 0:48:44minus the usual selling costs, of course.
0:48:45 > 0:48:49I'm really happy with those figures. It's pretty much what we were looking at.
0:48:49 > 0:48:52Top floor we were looking about 100,000,
0:48:52 > 0:48:55the first floor we were looking about 120,000
0:48:55 > 0:48:59and the ground floor we were looking at about 125,000.
0:48:59 > 0:49:01So they work into our figures.
0:49:01 > 0:49:05But it was always Gareth's plan to rent the flats out once complete.
0:49:05 > 0:49:11How much income could each flat potentially earn, starting with the two-bed ground floor one?
0:49:11 > 0:49:17I'd put the ground floor flat on the rental market for £575 to £600 per calendar month.
0:49:17 > 0:49:20And the two-bed first floor flat?
0:49:20 > 0:49:25The first floor could rent in the region of £600 per calendar month.
0:49:25 > 0:49:31And finally the top floor studio which Gareth converted into a one-bedroomed flat.
0:49:31 > 0:49:35I'd rent the top floor flat for £450 per calendar month.
0:49:35 > 0:49:38The combined rental income of the three flats
0:49:38 > 0:49:42could be £19,500 a year.
0:49:42 > 0:49:46That would give Gareth a rental yield of seven per cent on his investment
0:49:46 > 0:49:49of 268,000.
0:49:50 > 0:49:57That's about what we were hoping for. We were working pretty much within those figures.
0:49:57 > 0:50:00So yeah, very happy with that!
0:50:00 > 0:50:03This was Gareth's first big project.
0:50:03 > 0:50:05Although he's had a few hiccups along the way,
0:50:05 > 0:50:08it looks like the end product will be worthwhile.
0:50:08 > 0:50:12It's set him up well for his future as a property developer.
0:50:12 > 0:50:16Start to finish, working on this property, it's been really enjoyable.
0:50:16 > 0:50:19It's longer than we'd hoped, what with the planning,
0:50:19 > 0:50:21but I've really enjoyed it and learned a lot.
0:50:28 > 0:50:34We're returning to Stockport now to catch up with engineering consultant and property developer Gary.
0:50:34 > 0:50:36He bought this two-bed terrace
0:50:36 > 0:50:39for 73,500.
0:50:41 > 0:50:43It was already in pretty good condition
0:50:43 > 0:50:48and he wanted to get it onto the rental market as efficiently as possible.
0:50:48 > 0:50:51I have a decorator coming in next week, starting on Monday.
0:50:51 > 0:50:53He'll be finished by Friday.
0:50:53 > 0:50:57- What quote have you got for doing the decorating?- £800.
0:50:57 > 0:51:03- All told.- That's a good deal!- It is. I can't deny that.- You're not going to tell us his name!
0:51:03 > 0:51:05I can if you want, for a price!
0:51:06 > 0:51:10Gary likes to keep things simple when buying property.
0:51:10 > 0:51:14He picks places that don't need much work so he can rent them out quickly.
0:51:19 > 0:51:22Just eight weeks have passed since we saw him
0:51:22 > 0:51:26and he's certainly made some simple but effective changes to the living room.
0:51:26 > 0:51:32We had a horrible gaudy looking carpet that filled the two rooms
0:51:32 > 0:51:34so we had to rip that up.
0:51:34 > 0:51:37We did a bit of work on the floorboards. Some were loose,
0:51:37 > 0:51:41and then we put this nice laminate down which freshens the place up
0:51:41 > 0:51:44and makes it look bright and presentable.
0:51:44 > 0:51:48Upstairs, Gary continued the theme of improving what was already there
0:51:48 > 0:51:52and has cost-effectively freshened the place up for rental.
0:51:54 > 0:51:58In this room, all we've done is plastered this wall.
0:51:58 > 0:52:01It was fairly rough when we had a good look at it.
0:52:01 > 0:52:05We plastered, painted, decorated, painted the woodwork
0:52:05 > 0:52:09and radiator. All that remains to do here is to replace the carpet.
0:52:09 > 0:52:17Gary knows his market, and whilst there are a few areas still rough round the edges,
0:52:17 > 0:52:20he's done what's needed to get the place fit for renting.
0:52:20 > 0:52:26Altogether, the project took about four weeks from getting the contractors on board
0:52:26 > 0:52:28to them coming, decorating from top to bottom.
0:52:28 > 0:52:32The downstairs, remove all the carpets, put the flooring down,
0:52:32 > 0:52:34and it was done.
0:52:34 > 0:52:38The only jobs outstanding are getting the gas safety check underway.
0:52:38 > 0:52:41A legal requirement for me to do that.
0:52:41 > 0:52:46A bit of work on the incoming water service to be finished off by the water board.
0:52:46 > 0:52:49And the final job is to fit the carpets upstairs.
0:52:51 > 0:52:56Gary set himself an extremely tight budget of just £1,750
0:52:56 > 0:52:58to get the place ready for rental.
0:52:58 > 0:53:01He managed to do it for that exact amount
0:53:01 > 0:53:03but it's not all been plain sailing.
0:53:04 > 0:53:10The biggest problem I had was when I was showing prospective tenants around after the Christmas break.
0:53:10 > 0:53:14I opened the front door, let them in, and could hear a hissing.
0:53:14 > 0:53:17I walked into the kitchen and there was a burst pipe.
0:53:17 > 0:53:20The tenants hurriedly left the property,
0:53:20 > 0:53:25and we had to arrange for a plumber to come and effect a repair.
0:53:25 > 0:53:30That was the worst thing I've encountered, which isn't too bad overall.
0:53:30 > 0:53:32# I got a leak in this old building
0:53:32 > 0:53:34# Got a leak... #
0:53:34 > 0:53:39Burst pipe aside, Gary succeeded in turning this property around quickly.
0:53:39 > 0:53:42Which is just the way he likes it.
0:53:42 > 0:53:46I've bought properties in the past, complete refurbishment projects,
0:53:46 > 0:53:50rip everything out, go back to bare brick in some instances
0:53:50 > 0:53:51and start from scratch.
0:53:51 > 0:53:55And the process is obviously very time-consuming.
0:53:55 > 0:54:00So the model now it to buy properties where the bulk of the work's been done,
0:54:00 > 0:54:05in reasonable condition, got gas central heating or a heating system,
0:54:05 > 0:54:09and all we need to do is come in, crash, bang, give it a lick of paint
0:54:09 > 0:54:11and it's done within three to four weeks.
0:54:11 > 0:54:15That way, we can move on to the next project fairly quickly.
0:54:15 > 0:54:18And it's proving to be a winning formula.
0:54:18 > 0:54:21We've got some tenants lined up for it.
0:54:21 > 0:54:23We've got contracts agreed.
0:54:23 > 0:54:26All the necessary checks have been done.
0:54:26 > 0:54:29They're giving notice to their existing landlord
0:54:29 > 0:54:32so hopefully they should be moving in this weekend.
0:54:32 > 0:54:35That's quick work by anyone's standards.
0:54:35 > 0:54:39But has Gary actually added value to this property?
0:54:41 > 0:54:45Let's see what two local estate agents think of what he's done.
0:54:45 > 0:54:51The property's in a lettable condition, ready to move tenants in.
0:54:51 > 0:54:55From a sales point of view, there's a few small jobs to do
0:54:55 > 0:54:57but it's close to being finished.
0:54:57 > 0:55:01It's had a lick of paint. It looks a bit better than last time.
0:55:01 > 0:55:04Still some finishing touches that might need doing.
0:55:04 > 0:55:06Nothing dramatic.
0:55:06 > 0:55:08Let's cut to the chase.
0:55:08 > 0:55:12What kind of income do they think this two-bed terrace could earn?
0:55:16 > 0:55:22I'd expect this property to rent for between 450 and £500 per calendar month.
0:55:22 > 0:55:29This property would go for probably between £475 to £500 per calendar month.
0:55:29 > 0:55:35That's a pretty good assessment. I've managed to get 525 off the new tenant,
0:55:35 > 0:55:37so I'm relatively pleased with that.
0:55:37 > 0:55:43Gary's total outlay on this terraced house is £75,250.
0:55:43 > 0:55:48When his tenants move in, paying rent of £525 per calendar month,
0:55:48 > 0:55:52he'll earn a healthy rental yield of just over eight per cent.
0:55:52 > 0:55:55But what if Gary decides to put the house on the market?
0:55:55 > 0:55:57Has he added value?
0:55:57 > 0:56:03In my opinion, this property would achieve around £90,000 in the current market.
0:56:03 > 0:56:07In the current climate, being in the local area it's in,
0:56:07 > 0:56:12I'd say we're probably around between £90,000 to £95,000.
0:56:12 > 0:56:17So on Gary's investment of just over 75,000,
0:56:17 > 0:56:21he's already looking at a profit of around £15,000.
0:56:22 > 0:56:26That's a pretty good increase. What I paid for it, in a short space of time,
0:56:26 > 0:56:30that's a good return on my investment already. Very pleased.
0:56:30 > 0:56:32A success all round for Gary, then,
0:56:32 > 0:56:37and I've a feeling he'll be heading straight back to an auction very soon.
0:56:37 > 0:56:40Going forward, the way I want to purchase all my properties,
0:56:40 > 0:56:42there's bargains to be had.
0:56:42 > 0:56:47Typically 15 to 20% cheaper than purchasing on the open market through an estate agent.
0:56:47 > 0:56:50So definitely it's the way forward for me.
0:56:52 > 0:56:56We'll be back again with more thrills and spills from the auction room.
0:56:56 > 0:57:00- So join us then for more Homes Under The Hammer!- Bye!- Bye!
0:57:21 > 0:57:24Subtitles by Red Bee Media Ltd