Episode 23 Homes Under the Hammer

Hello! Did you ever want to buy property at auction, but didn't know where to start?

Well, perhaps we can show you some tricks of the trade.

Join us as we follow brave buyers buying their homes under the hammer.

Auction rooms aren't intimidating. Anyone can buy there.

Today we talk to intrepid buyers who've taken the plunge.

Will they sink or swim? Let's find out.

I'm in west London, where, frankly, I can't believe my eyes.

How absolutely fascinating!

Huh!

There are some very problematic stairs at this Victorian terrace in Cardiff.

Whoever buys this property at auction has got to work on that!

And I hope my luck won't run out when I visit this terraced house in Stockport.

Does it continue in the kitchen? Yeah, it does!

All these properties have been sold at auction.

We'll find out who bought them and what they paid

when they went under the hammer.

Yours, sir!

I'm in the London borough of Hammersmith and Fulham,

an area that saw a lot of development in the Victorian era.

Some of the architecture here is so impressive

that whole streets are listed.

But there's more than Victorian architecture to entice potential property purchasers

to this desirable part of the city.

That is the main road into London from the west.

Baron's Court tube there, and you're quite close to Hammersmith and West Kensington

so not a bad location at all.

The property I'm here to see is a flat, two bedrooms,

built around 1920. A guide price of 225,000 quid.

Let's hope some of the 1920s era remains.

It's a busy junction, all right, but the flats are set back from the road.

The well-maintained reception area really has retained its period charm

which helps raise this place to a whole new level!

Not a huge lift, for sure,

but at least there is one which brings you to the second floor

which is where you find the flat I'm here to see.

Huh! Wow. It's a really interesting building from the outside

but you don't think that'll be translated into the shape of the flat.

It's basically one huge great curve!

How absolutely fascinating!

Wow! Straightaway facing you is the kitchen.

And all the rooms are going to be like this!

Narrower at one end and wider at the other.

That's an interesting problem when it comes to furniture!

Kitchen itself, very small.

How do you describe this to a furniture designer or kitchen maker?

"It's like this. It's kind of round at one end, thin..." No.

It's great!

# Bend me, shake me, any way you want me... #

I reckon these kitchen units could be the originals

and must have been shaped to fit into such an unusual space.

It's certainly bright and charming,

but it needs a complete overhaul to make it more practical.

What else have we got? A very small bedroom there.

If it was just one person here, I'd have it as a study.

Then through into the lounge. Here you really get the feeling of this curvature.

Oh, listen to that.

Fantastic noise if you bang the wall. That'll annoy the neighbours!

But not much of the 1920s left,

apart from this.

A fantastic fire surround, a nice bit of marble

and look at that electric fire! Sadly,

it's probably inefficient, terribly unsafe,

so unfortunately it will probably have to go.

What a shame. If you could keep it, I would. Character or what?

So continuing "round" this flat, quite literally,

bathroom and loo there.

Wonderful shape. Love the tiles, they are so 1920s. Again,

if you could keep those. Change the suite. Keep the tiles if possible.

Then through to what is, I guess, the master bedroom.

It's not huge.

It's just very strangely shaped.

Lots of light coming in. So, all in all, if you're after a quirky flat,

in a great location,

this is it!

With a guide price of £225,000, that quirkiness doesn't come cheap.

But it is a pretty smart location.

# Puttin' on the Ritz. #

There's a charge for the building management and ground rent

which works out at £3,480 per year.

That might seem steep,

but does include heating bills, hot water, maintenance, lift and porter services.

Let's ask a local estate agent to step back in time

and tell us what he thinks of it.

The location here is an Art Deco gated development.

It's extremely exclusive, has a very prestigious reputation

and they don't come up very often.

The flat being on the curve adds a dimension you wouldn't get in a modern building.

It's a lot of charm. It's difficult to work with, but you'll end up with something fantastic.

Bearing in mind that the guide price was 225,000,

how much is the flat likely to be worth, once done up?

Once the property is refurbished, I'd expect it to achieve no less than £380,000.

I would expect it to achieve £400,000 in the current market.

That could certainly be a tidy profit.

What could the rental value be?

If the property was refurbished, I'd expect to achieve £1,300 per calendar month

to £1,500 per calendar month.

Well, £225,000 for a two-bed flat does sound like a lot of money.

But that's what you pay in this part of London.

I still think it's a good price. Let's see who agreed when it went under the hammer.

A two-bed purpose-built flat.

Who'd like to kick off? 300? I think it's worth 300.

300, anywhere? 250?

250 down here. 250.

255.

260. 265.

270. 275?

271? 271?

271 down here. Nearly missed you.

272?

273?

274? 275?

276?

275 down here. Anyone else?

First time. Second time.

276.

Sorry, she just beat you. 276. 277?

278?

279.

280.

281. 282.

283. 284.

285. 286.

286?

Yeah? 287.

288.

No? 287 down here.

288. New spot. 289?

290. 291.

292? 291 down here.

292?

If not, 291, first time,

second time, third and last time.

Sold, 291. Well done, madam.

And the lady keen for a taste of the 1920s was Margaret,

a nurse and part-time property developer from Hertfordshire.

She and her husband paid £291,000 for the flat, 66,000 over the guide price.

-Margaret, congratulations!

-Thank you.

-You have one of the most unusual flats we've had on the show.

-Right, OK!

-Why did you want to buy it?

We came to view it before the auction and we liked the style of it,

the Art Deco style, and we thought it was a good investment.

-What about the wacky shape?

-Yes, we did... No, we like it.

We think it's a bit unusual. I'm not sure how we'll fit furniture in around the place.

It'll be a bit of a problem, but we like the unusualness about it.

Margaret's fairly new to the property developing game,

but has already successfully developed one nearby.

She has contacts in the building trade who help her bring them up to scratch.

I would like to put in new wooden floors,

but I'm not sure yet. My husband's undecided about wooden floors or carpet.

But to keep the noise down, we might be forced to put carpets down.

It would be very clattery for people downstairs.

-But it would look beautiful.

-And there's already a wooden floor in the hall.

And do you know what's underneath the carpet?

No, although we've just found some money in the bedroom, under the lino!

-Money?!

-Yes!

-What did you find?

We found a few pounds under the lino!

There you go! Maybe that's a good sign.

Maybe, yes!

Margaret's only just bought the place and is already making money!

She has a budget of 20,000

and has given herself three months to get the work done and make it habitable.

We're looking at putting a new bathroom in

and half a new kitchen. I like the cupboards on the right-hand side.

I'm battling with my husband to keep them.

And we'll put new units on the left-hand side, then general decoration. Nothing structural.

What about the fireplace?

The fireplace I'd like to keep. Keep the surround and put a modern fire in the middle.

The electrical unit is a bit dodgy.

-It is.

-Cute, but...

-It doesn't look very safe!

But it's not just the inside of the flat where improvements will take place.

Margaret's discovered that the building is to undergo major work in the next two years.

This includes the addition of underground parking,

great for the property in the long term.

But what are the short-term plans?

Is the idea to sell it on or to rent it out?

We think to rent it to begin with until all the work is completed.

And then put it on the market. We might get more for it once the work is completed.

-Right. So hold it until that time.

-Yes.

And your hopes for the value once the work's been done and you've tarted it up a bit?

-We hope to get around 400,000 for it.

-400?!

-Yes.

-Wow! That would be a good return.

-It would be.

-Yes.

-Congratulations. Good luck with it.

-I look forward to seeing how you get on.

-Thanks.

Well, Margaret's certainly got a place with lots of character.

However, with the quirkiness comes a whole set of problems.

I think she'll find it a challenge to sort this place out.

Let's see the end results later in the show.

This is Victoria Park in the Canton area of Cardiff.

It was created in 1898 to celebrate the Queen's diamond jubilee

as a recreational space for the working class locals.

Today, the area has a more multicultural feel

and since the young arty professionals have moved in,

it's become an extremely popular place to live.

And I can see why. You've got acres of this lovely green space right on your doorstep.

Beautiful Victorian houses

all around, only just a few minutes from the city centre.

Just a couple of streets away from Victoria Park

is the property that was up for auction.

In estate agents' speak, this is an extremely desirable location

and the lot itself doesn't look too bad, either.

It's this imposing mid-terrace,

currently split into three flats with a guide price of 169,000.

That seems a lot of property for not a lot of cash

in such a desirable area. There's even a garage and parking round the back.

The exterior has retained much of its original Victorian charm.

But can the same be said of the interior?

OK. Let's have a look around the ground floor flat.

I think those beautiful old Victorian tiles in the entrance

were the last of the Victorian features I'm going to see!

It's a bit on the shabby side, but you do have two good-sized bedrooms down here.

A bit of under-stairs storage, which always comes in handy.

Towards the back of the property, not a bad living space.

There's already quite a bit of furniture in here.

It still feels quite spacious.

It just needs a bit of love, a tidy up, some new carpet.

A lick of paint.

Right at the back, we've got a rather disappointing kitchen.

It's on the small side.

Then off the kitchen, the bathroom.

I'm not loving this place.

It does what it says on the tin,

but I just think it'll be a good rentable flat.

Up on the first floor is the other two-bedroomed flat.

It's slightly more spacious with a bright reception room, the two bedrooms are compact doubles

and the kitchen and bathroom are very tired and need replacing.

So everything seems in place for a very straightforward renovation.

Or does it?

Flat two definitely feels bigger, with a better sense of flow.

But guess what this is here?

That is the entrance to flat number three.

That is far from ideal.

It means people living in flat two

have got to suffer people that want to live up there

walking through their property.

I've been wracking my brains to think of how to change the entrance.

I haven't come up with it yet,

so whoever buys this property at auction has really got to work on that

because it's far from ideal.

In fact, I see it as a bit of a problem.

The corridor here is very narrow

so it's tricky to create a private entrance to the top floor flat

without eating into the footprint of this flat on the first floor.

But the problem's got to be solved

as I can't see many potential buyers or tenants

putting up with the current arrangement.

Once you've passed that tricky entrance,

it leads up to a generously sized studio flat

which again just needs modernisation and TLC.

I quite like it up here.

It's a lovely added bonus.

But let's talk money.

I've done a bit of digging, and this flat alone could sell for 100,000.

That is some expensive loft space!

So if you add on top of that the two flats you have downstairs,

which are worth roughly 130 grand apiece,

then the combined value is around 360,000.

So if you buy for the guide price, spend some cash dolling this place up,

what you've done is every developer's dream -

you've doubled your dosh!

# It makes me smile

# Yeah, it makes me smile... #

Those potential figures would bring a smile to anyone's face.

If you can just sort out that first floor access problem,

you're onto a winner here.

Let's see if a local estate agent agrees.

For the age of the property, the condition is very good.

The roof's been changed, the rendering's been renewed.

The front is well presented, all the windows changed.

Interior-wise, it's a coat of paint.

So it's a really good property. In fact, a hot property.

Once brought up to modern standards, these flats should all have excellent rental potential.

I would say that the ground floor and first floor in the region of 625 to 650 a month.

The studio apartment, I'd say around 450 to 475.

Nice letters. They need to be dressed, furnished, and you'll get some stylish tenants.

That's a very healthy rental income of over 21,000 a year.

With a guide price of 169,000,

that makes this place a potential goldmine.

Once renovated, what could the flats be worth on the open market?

I view the ground floor as being in the region of 130 to £140,000.

The first floor, same again.

And the studio, round about 100,000.

With a total value of around 360,000,

the new owner could be quids in here.

This is a chance to buy three flats

in an extremely sought-after location

at a fraction of their true value.

There's work to be done,

but this could be a chance to pull off a trick

that's increasingly rare in this downtrodden market.

You know - make a quick buck!

Let's see who went for it at the auction.

This property was one of the last auction lots to be sold.

So by the time it came up, most bidders had already called it a day.

Less competition can mean a better chance of getting a property bargain.

There's been quite a lot of interest in this one.

175,000 to start me. It's not asking a lot.

170, then. Let's get on.

It's got to be worth more than that.

170. 160? Thank you, sir.

160 bid. At 160. It's worth more than that.

Percy, two. Two is bid. Thank you. Four.

You're out, sir. Six. Thank you. 166.

At 166. Eight, thank you. 168.

At 168 in front of me.

At 168.

At £168,000. 70, thank you.

At 170 there.

You saw that bid. One, then, all right. One.

171. Two is bid.

Thank you. Three is bid.

173. 174. You're still out, sir.

At 174. Five.

At 175. Six is bid.

At 176. Please bid as quickly as him. Seven. 177.

178 on my right.

One more might do it, sir. You've been in all the way.

There is the bid, though, at £178,000.

It's yours, sir. Thank you.

The new owner of the property is local lad Gareth.

Although he's got some experience of developing,

this is going to be by far his biggest project.

-Congratulations.

-Thanks.

-Well done. You paid £178,000 at auction.

-Yes. Really happy.

-How much would you have paid?

-Um,

-I'd have probably gone up to 200, actually.

-Really?

-I think I've got a good deal.

-What's your background?

I've recently been working for a company, managing accounts for security products.

Before that I was a diving instructor.

So travelling around the world, where I met my partner.

Then we decided to get serious and come back to the UK.

-Much more glamorous than property developing, Gareth!

-Yes.

Gareth's already renovated a one-bed flat and I can see exactly why he's made this his next project.

It's perfect for him to dive right into the ocean of property development.

There's enough that I can get stuck in. Enough that I can do myself.

The ground floor is obviously just basically a renovation.

Simple renovation, as is the top floor.

The interesting concept is what's going to happen on the first floor.

I'm still not too sure what I'm going to do with it.

-Oh!

-I've got a planner who's going to come and help me.

We're looking at either two studio flats

or possibly see if we can extend it back into a two-bedroomed flat

but without having to go through the hallway.

So Gareth's thinking of turning this two-bed flat on the first floor

into two separate studio flats.

By doing that, he'd create a private access to the top floor flat.

But it's quite a drastic move and does rely on getting planning permission to do it.

Ideally, it would be much easier for me to leave it as a two-bed flat

because the gas, utilities, are all split into three.

So adding another studio will mean I'll have to split it again.

It's more hassle and more cost.

So, Gareth, if you don't get permission to create another flat in this building,

you've got to think about moving that doorway to the studio flat,

-that entrance.

-That is going to be the problematic issue.

I'm going to go for the studio flats on the first floor,

see if I can get the planning.

Failing that, then that'll be Plan B!

You know, it's really bugging me because I've been wracking my brains

thinking there must be a way. I've seen so many houses.

I can't come up with a solution to help you out. Sorry about that!

It's a shame as I was hoping you could!

I know! I can't think of a way of how you can do it, even turning the stairs around.

It's certainly a tricky one to solve

but the success of the whole development depends on it.

Gareth's given himself four months and an overall budget target of 60 grand.

It sounds like he's going to dive right in.

How into the renovations are you? Are you going to get stuck in?

-Absolutely, yeah.

-Really?

-Filthy, top to bottom.

No, I like it. I love getting stuck in and just...

I mean, I can do the ripping out, that I can do.

I can do some tiling and bits and bobs.

So I'll be doing a lot of it myself.

-Not bad going for a diving instructor!

-Yeah.

-I'm impressed!

Gareth, good luck with this project.

-It'll be interesting to see the outcome.

-Thanks very much.

I am delighted for Gareth. This is a great investment.

But those stairs will really affect his plans.

Will he manage to swing them round or will his budget have to escalate?

Find out what happens later on in the programme.

Coming up: am I setting myself up for a fall in Stockport?

From the outside, it looks pretty good.

Let's hope the inside matches our expectations.

It's not good news when the survey results arrive for this Victorian terrace in Cardiff.

He informed us that pretty much every room was substantially damp.

But first, someone's been creating a stir in west London.

If we made too much noise, we did get a lot of complaints.

Back to the London borough of Hammersmith and Fulham

where Margaret from Hertfordshire paid £291,000 for a two-bedroomed flat

in this exclusive 1920s development.

It looked as though it hadn't been updated since the halcyon days of the Art Deco era

and the whole flat was built in an unusual curved shape.

-What about this wacky shape?

-We like it. We think it's a bit unusual.

I'm not sure how we're going to get furniture fitted in around the place.

It'll be a bit of a problem, but no, we like the unusualness about it.

The curved flat spanned out from the entrance hall.

It had a tiny second bedroom, original 1920s kitchen

and a reasonably sized living room with a cute but hazardous fire.

There was also a very dated bathroom with lovely original tile work

and a pretty but small master bedroom.

It's now five months since we saw the place.

Let's see if it's still stuck in a time warp

or if it's been brought successfully up to date.

# If you're blue and you don't know where to go to

# Why don't you go where fashion sits

# Putting on the Ritz. #

In the kitchen we've ripped out most of the units to the left-hand side.

We've replaced them, mainly, to the left-hand side to give space.

We've painted, re-tiled, put a new sink in,

a washer-drier, new oven, hob.

We've made a little breakfast bar, retiled the floor

and re-done the plumbing.

With the fireplace, we decided to keep the original surround.

The inset was all cracked marble with an old two-bar electric fire.

So we've replaced the marble with just porcelain tiles

and put a new fire in the centre.

Margaret and her husband have achieved a really sympathetic restoration here.

Although the place is now very modern with everything necessary for contemporary living,

they've been true to the style of the original development.

To begin with, we had to rewire.

We had to replumb. The pipes had to be broken out from the wall, replaced.

That was quite a big job. We hadn't anticipated that before we started.

So that was quite a cost.

We've done the papering, painting, and tried to put a bit of character

into the place to make it in the Art Deco style.

Looking around, it's very much black and shiny and silver.

So that's what we've tried to do.

The project has largely gone to plan.

However, the plumbing was more complicated than anticipated and cost an extra £8,000.

It also turned out to be quite a challenge not to disturb the neighbours.

Noise was probably the most difficult thing. If we were noisy we got complaints from neighbours.

So we had to be aware of that.

But apart from that, it was quite an easy project to do.

We've come more or less to budget, even with the plumbing.

We said 20 to 25,000 and we've managed to keep it to the 25,000 mark.

We had a late start as we had to get permission to do the works with the management committee.

We had to get permission to make the noise. We could only work Monday to Friday.

So it did hold us back a little bit,

but we're not too bad out of the time. Just under five months.

The whole building is also undergoing some communal improvement

including underground parking for all the flats.

This will really enhance the long-term prospects here

and I think Margaret's really fallen for the place.

We would like to move into the property but we have a property elsewhere that we live in.

But to be in London, that's why we've enjoyed the project so much.

It's been nice being in London and taking advantage of all the facilities.

So we don't know. We might do.

Time for the moment of truth.

Has Margaret's hard work paid off?

Let's ask two local estate agents for the low-down.

'My first impression of the property is they've done a really good job'

compared to when I first saw it. It's immaculate, the finish is good,

complementary to the flat.

I love the tones, the colours they've put in. They carpets are matched.

The fittings are wonderful, the wardrobes are beautiful.

The kitchen and bathroom stand out. They've done a very good job.

The flat cost £291,000 at auction.

Added to the renovation budget of 25,000,

the total outlay is £316,000.

Will the investment pay off?

I think the value is in the region of £380,000.

I would look to market it at £400,000 to achieve that figure.

If this property came to the market, I'd bring it on at £430,000

and expect an offer quite close to that.

That's quite a range of valuations.

But even so, if they choose to sell,

Margaret and her husband could make a pre-tax profit of between 64 and £114,000,

minus the usual selling fees, of course.

We sort of thought probably around the £400,000 mark,

so that's probably quite a good cross-section.

Yes. Obviously the higher end is better!

Surely a flat like this in this part of London

would be perfect to rent out.

If this property came to the rental market, I would hope to achieve £1,500 per calendar month.

This flat, if it came to the rental market,

would achieve £1,800 per calendar month.

Ooh, that is quite a difference. We thought about 1,600 a month

as there's quite a big service charge

and we believe the landlord takes the service charge.

Yes, so 1,600 a month is what we thought, so it's not too bad.

Again, the higher end would be better!

Now the hard work is over and Margaret and her husband know what the flat is worth,

they must decide whether to rent it out, sell or move in themselves.

It's possible we might think about living here for a few weeks

just to see if maybe in the future we'd like to stay in London.

But I think we'll probably do the rental market for the time being

and wait until the building work is finished on the block

and see how it goes from there.

I'm in Stockport, six miles south-east of Manchester.

It's a town which was once very much ahead of the game.

Stockport was once the centre of the UK hatting industry.

At its height in 1884,

it was exporting over six million hats.

Sadly, the last hat factory closed in the late 1990s

but the local football team, Stockport County, are still known as The Hatters.

Another claim to fame is that the film character Indiana Jones wore a hat made in Stockport.

Let's hope I'm not about to take a last crusade into a temple of doom!

I'm here to see a two-bed mid-terrace.

The guide price was 65,000 quid. This is it.

From outside it looks pretty good.

Let's hope the inside matches our expectations.

So, does it?

Actually, looking pretty good so far.

I like the fact there's a porch area here

and through into the front living room.

The carpet's a bit dirty, but apart from that,

I'm already thinking this is just a lick of paint to sort it out.

Through to this rear living room area.

Interesting fire. It's been modernised at some stage.

It's fairly open plan, stairs up there and space under the stairs as well.

This has been thought through. Somebody's restored this.

Does it continue in the kitchen?

Yeah, it does. Fantastic. Look at that.

Already I'm seeing you could pretty much move in to it as it is.

Out back is a small fully-paved yard.

It seems like a novel place for an extra bedroom, if you ask me!

But it just needs tidying.

You'd have to see to the gutters and give them a good clear out.

But the main roof looks pretty sound and the windows are recently double-glazed.

Good news upstairs? A big bedroom at the front there.

It's a good-sized space. Good news the bathroom and toilet are up here, too.

Then a slightly smaller second bedroom.

Again, it needs tidying up. Get some nice wallpaper on the walls.

Sort out the carpet and certainly get the boiler checked out.

But apart from that, again, not a lot of work to get this place very desirable.

Time to hear if a local estate agent agrees.

These properties were built around 1910.

Traditional brick built, slate roof, garden fronted.

It's in fairly good condition. Only decorating required.

Double-glazed uPVC windows,

nice bathroom, nice kitchen, so it would make a great renter

or it would equally sell well.

It all sounds good so far.

Bearing in mind the guide price of 65,000

what sort of income could the property earn on the rental market?

If we were renting this property out,

we'd expect to achieve around £475 per calendar month.

Once it's been freshened up, what could the resale value be?

If we were selling this property, we'd expect to get around £90,000.

It might not be the most exciting property in the world,

but I think this is potentially a great little earner.

Get it for anything like the guide price, get a rent of 450 to £475 a calendar month,

and you could be on for a very serious yield of eight, nine, ten per cent.

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

The guide price is 65,000.

Start me off. Give me 65.

65 I'm looking for. Give me 60, then, and we're away.

60. 60,000 I have. Gentleman's bid at the back at £60,000.

62 I'm looking for.

61, if it helps. 61. 61,000, then.

61 at the back. Do we see 62?

Against you at 62.

63? 63. 64.

At 64. 65?

At 65, now. 65,000, to the rear of the room.

65,000.

At 65. 66?

66. 67? 67 anywhere? 66 I have, then.

67 I'll take.

67,000?

At 67. 67,000. 68?

68. 68,000. 69?

You're out at the back now.

You're out. At 69,000. 69 I'm bid.

70 I'll take.

70,000. At £70,000, then. At 71?

70,500. Good grief, here we go. 70,500. 71 at the back?

71.

71. 71,500. 71,500. 72.

72. 72,500.

No? 72,250.

72,500. Same to you. 72,500. 72,500. Are you out?

You're out. OK. It's in the market.

72,500 for the first time.

72,500 for the second time.

Excuse me.

73. At 73,000.

73,500?

73,500. 74?

73,500, then, at the back.

First time at 73,500.

Second time at 73,500. Are we all done?

Right at the back. 73,500.

The only bidder willing to pay 73,500 for the terraced house

was Gary.

He runs an engineering consultancy firm

but invests in rental properties as a sideline.

He's been on Homes Under The Hammer before

when he bought a two-bed terrace in nearby Salford.

I met him back at his new house in Stockport to hear how he's been getting on.

-Gary, good to see you - again!

-Likewise, Martin!

Congratulations on another purchase. Your property empire is expanding.

-Slowly but surely.

-Before we move on to this, how did the last place go?

OK, in the end. Soon after the filming,

we got a tenant in, there was quite a demand, actually.

We got a tenant interested, carried out the usual checks

and she moved in with a young family and it was let.

-That's sorted, restored, boxed off, tenant in, move on to the next.

-Exactly.

At the moment there's a lot of demand for rental properties particularly round Manchester.

What do you put that down to?

A lot of it's obviously to do with the issue of finance,

people not being able to get mortgages.

It's a lot easier. People tend to be going the European way, as I call it,

maybe renting rather than buying, maybe buy later on in life.

Which, as a landlord, really suits my business plan.

Gary's certainly a man with a mission.

He only started in the property game a year ago, but has already built up a considerable portfolio.

He looks for exactly this kind of property in popular rental areas,

tidies them up and puts them back on the rental market as soon as possible.

That formula works very well for him.

It fitted the bill in terms of price and, when I came to see it,

the amount of work that's not required.

Let's face it, the ideal property for me, a lick of paint,

new carpets here and there, but in the main, everything's there.

The gas central heating's been done. Double glazed.

It ticks all the right boxes. I've got a decorator coming in next week.

He's had a look, given me a price and he's starting on Monday.

-He'll be finished by Friday.

-What quote have you got for decorating?

-£800.

-To paint it top to bottom?

-Yeah, all told.

-Gosh!

-That's woodwork and walls as well.

-Really?

-Quite good.

-That's a good deal!

-I can't complain at that!

-You won't tell his name!

-I can if you want - for a price!

Gary's definitely a shrewd businessman.

With a portfolio of properties behind him,

he's built up contracts with tradesmen who work for him at rock bottom prices.

But he's changed his strategy. When we last met him in Salford,

he was doing all the work himself to keep costs down.

You're wasting valuable time. It took me a lot longer to do it myself than to get a guy in.

I pay a reasonable rate for decorating and I can get it marketed very quickly.

So in total, your budget. 800 quid for painting and decorating.

And somebody who's doing it day in, day out,

is probably going to do a better job than you or I would do.

-Are you knocking my decorating?

-I'm sure it's marvellous!

-But professionals are that, aren't they?

-It goes without saying.

He'll do a good job. And a lot quicker than what I would.

So the budget. What else do you have to spend? Carpets.

Cleaning. I might have to replace some. There are stains from animals living here. Apart from that,

a bit of cleaning, gas safety inspection checks,

the usual things you do as landlords.

-But your preliminary budget can't be more than two grand?

-I've estimated around 1,750, tops,

to get it up and running to a habitable condition.

While the two-bed terrace is empty, it's costing Gary money.

So he can't afford to spend a lot of time preparing the place.

His plan is to finish it and get tenants in within just five weeks.

After this, what's the plan?

The plan is to just keep going for it.

I attend auctions regularly to get a good idea of what's coming up.

The plan is to carry on going

and eventually, if I can do one a month, then I'll be happy with that.

I'd love to do this as a full-time job.

I enjoy doing it. You meet lots of interesting people.

You get to lots of different places

and I fully recommend it as a career, hopefully my career!

-I suspect it won't be the last time we see you!

-Hopefully not.

-Good luck with this. We'll see how you get on.

-Thank you.

Gary seems to have got himself another good property here

and he makes it look very easy, doesn't he?

But will it really run that smoothly?

Will he get it sorted in five weeks for that very small budget?

You can find out later in the show!

It's been many months since we saw those properties.

Have the renovations been plain sailing or bumpy rides?

Let's go back and find out.

Back to the Victoria Park area of Cardiff now,

where diving instructor turned property developer Gareth

had bought this terraced house for 78,000.

It was converted into three flats and his plan was to do them up to rent out.

The ground and first floor consisted of two good-sized two-bed flats.

The main issue was with the top floor flat.

You could only access it by going through the first floor flat,

which was never going to work if the flats were to be rented out separately.

As far as I could see, there was no quick fix to this problem.

I've been wracking my brains thinking, "There must be a way!"

I've seen so many houses, and I can't come up with a solution to help you out! Sorry about that!

-Shame! I was hoping you could!

-I know!

Well, all that was 13 months ago. Let's see how Gareth's been getting on.

It's not looking so great outside

and the work is still very much in progress -

because he's discovered that the house had never had planning permission to be converted to flats.

When we went for planning to adjust the passageway,

we found out it didn't have planning for the three flats.

So we had to resubmit. Unfortunately, that took about eight months.

So the project was put on hold. Luckily I had other projects in the area to drop onto.

So when the planning came back in, we were able to start straight back up on it.

Gareth's certainly been making up for lost time.

The work is still ongoing, but you can see he's going for a top-class finish.

Unfortunately, the ground floor flat had unforeseen damp problems

which did create some extra work.

We knew that there were some issues in some corners of the rooms

and when the specialist came out, he informed us that every room was substantially damp.

And we had the entire property damp-proofed.

It's a long-term project, and I'd rather not have to deal with this in the future

so we just did it.

The first floor flat is progressing well.

But what about that tricky access issue?

How did Gareth solve the problem of getting to the top floor flat

without having to traipse through the middle flat?

Well, he created two corridors side by side. One is the entrance to the top floor flat,

the other an internal passageway that accesses the bedrooms to the first floor flat.

To make the top floor accessible as a separate flat,

we had to develop this passageway.

The problem with that is we lost some space off this bedroom

but it's worked out quite well.

Gareth's right that the new passageway has compromised the size of the second bedroom on this floor.

But I can see that this was his only option, and I think he's made the right move.

We had another idea, to create two one-bed flats on the first floor.

However, we were lacking on the space on the rear flat.

We couldn't quite squeeze another flat in.

So we chose to go with the two-bed flat on the first floor.

As I said, we have lost a bit of space off one of the bedrooms,

but I think it's worked out for the best.

But it's actually the top floor studio flat where Gareth's excelled himself.

Basically, we decided to move the kitchen from next door into this room.

It's quite a small room, but I think it works quite well.

As you see with the beams, it makes it quite quirky.

But I really like it.

This means that where the kitchen was is now a bedroom.

And by adding a tiny shower room, Gareth's really made the most of the space up here.

Although there's a bit of work to do still,

he's completely transformed these flats.

The planning delays he's suffered have inevitably driven up his costs,

and he's had to do a lot more than he originally anticipated to make this a sound investment.

When we re-submitted the plans and they said there were new regulations for soundproofing,

so we had a project manager come out, have a look and give us some good advice.

We did slightly over-engineer, because we didn't want to have to go back

if the sound test failed.

So we've basically put a lot of soundproofing in

and the heat is a benefit as well, the insulation will be pretty good in all the flats now.

When we turned all the boilers on, we found the flats heated up very quickly

so we found ourselves opening windows in mid-December

because the insulation was so good!

So the environmentalists will be happy about that!

The original budget, we said about 60,000.

Obviously because of the soundproofing, that's pushed it up.

It's gone up considerably. It's in the region of about 90,000 now.

Added to the purchase price of 178,000,

that means Gareth's total spend so far

is £268,000.

So has he made money or lost it? Time for some expert opinions.

It's virtually 80, 85% done.

First impressions from the road, with scaffolding, it's still being finished off.

But hopefully the finishes of the kitchens and bathrooms will be to a standard expected for the area.

I think it's done to a very high standard.

Finishing off to do, but what's been done is to a very good standard.

Don't forget that Gareth blew his budget here and spent an extra £30,000.

Was that the correct strategy?

I would market the top floor flat for £99,950.

In my opinion, the top floor apartment is worth 99,950.

It seems that turning this studio flat into a one-bedroomed flat

was the right decision.

What about the two-bed first floor flat?

The first floor flat, in my opinion, could sell for £125,000.

I'd put the middle flat on the market for £119,950.

Even though Gareth had to shrink that second bedroom,

he could still make a decent profit on the first floor flat.

How much could the ground floor flat be worth?

The ground floor apartment which has the garage and rear garden

in my opinion is worth in the region of £135,000.

I'd put the ground floor flat on the market for £129,000.

That means the combined value of all three flats

is around £354,500.

Bearing in mind Gareth's total spend is 268,000,

he could stand to make a profit of £86,500,

minus the usual selling costs, of course.

I'm really happy with those figures. It's pretty much what we were looking at.

Top floor we were looking about 100,000,

the first floor we were looking about 120,000

and the ground floor we were looking at about 125,000.

So they work into our figures.

But it was always Gareth's plan to rent the flats out once complete.

How much income could each flat potentially earn, starting with the two-bed ground floor one?

I'd put the ground floor flat on the rental market for £575 to £600 per calendar month.

And the two-bed first floor flat?

The first floor could rent in the region of £600 per calendar month.

And finally the top floor studio which Gareth converted into a one-bedroomed flat.

I'd rent the top floor flat for £450 per calendar month.

The combined rental income of the three flats

could be £19,500 a year.

That would give Gareth a rental yield of seven per cent on his investment

of 268,000.

That's about what we were hoping for. We were working pretty much within those figures.

So yeah, very happy with that!

This was Gareth's first big project.

Although he's had a few hiccups along the way,

it looks like the end product will be worthwhile.

It's set him up well for his future as a property developer.

Start to finish, working on this property, it's been really enjoyable.

It's longer than we'd hoped, what with the planning,

but I've really enjoyed it and learned a lot.

We're returning to Stockport now to catch up with engineering consultant and property developer Gary.

He bought this two-bed terrace

for 73,500.

It was already in pretty good condition

and he wanted to get it onto the rental market as efficiently as possible.

I have a decorator coming in next week, starting on Monday.

He'll be finished by Friday.

-What quote have you got for doing the decorating?

-£800.

-All told.

-That's a good deal!

-It is. I can't deny that.

-You're not going to tell us his name!

I can if you want, for a price!

Gary likes to keep things simple when buying property.

He picks places that don't need much work so he can rent them out quickly.

Just eight weeks have passed since we saw him

and he's certainly made some simple but effective changes to the living room.

We had a horrible gaudy looking carpet that filled the two rooms

so we had to rip that up.

We did a bit of work on the floorboards. Some were loose,

and then we put this nice laminate down which freshens the place up

and makes it look bright and presentable.

Upstairs, Gary continued the theme of improving what was already there

and has cost-effectively freshened the place up for rental.

In this room, all we've done is plastered this wall.

It was fairly rough when we had a good look at it.

We plastered, painted, decorated, painted the woodwork

and radiator. All that remains to do here is to replace the carpet.

Gary knows his market, and whilst there are a few areas still rough round the edges,

he's done what's needed to get the place fit for renting.

Altogether, the project took about four weeks from getting the contractors on board

to them coming, decorating from top to bottom.

The downstairs, remove all the carpets, put the flooring down,

and it was done.

The only jobs outstanding are getting the gas safety check underway.

A legal requirement for me to do that.

A bit of work on the incoming water service to be finished off by the water board.

And the final job is to fit the carpets upstairs.

Gary set himself an extremely tight budget of just £1,750

to get the place ready for rental.

He managed to do it for that exact amount

but it's not all been plain sailing.

The biggest problem I had was when I was showing prospective tenants around after the Christmas break.

I opened the front door, let them in, and could hear a hissing.

I walked into the kitchen and there was a burst pipe.

The tenants hurriedly left the property,

and we had to arrange for a plumber to come and effect a repair.

That was the worst thing I've encountered, which isn't too bad overall.

# I got a leak in this old building

# Got a leak... #

Burst pipe aside, Gary succeeded in turning this property around quickly.

Which is just the way he likes it.

I've bought properties in the past, complete refurbishment projects,

rip everything out, go back to bare brick in some instances

and start from scratch.

And the process is obviously very time-consuming.

So the model now it to buy properties where the bulk of the work's been done,

in reasonable condition, got gas central heating or a heating system,

and all we need to do is come in, crash, bang, give it a lick of paint

and it's done within three to four weeks.

That way, we can move on to the next project fairly quickly.

And it's proving to be a winning formula.

We've got some tenants lined up for it.

We've got contracts agreed.

All the necessary checks have been done.

They're giving notice to their existing landlord

so hopefully they should be moving in this weekend.

That's quick work by anyone's standards.

But has Gary actually added value to this property?

Let's see what two local estate agents think of what he's done.

The property's in a lettable condition, ready to move tenants in.

From a sales point of view, there's a few small jobs to do

but it's close to being finished.

It's had a lick of paint. It looks a bit better than last time.

Still some finishing touches that might need doing.

Nothing dramatic.

Let's cut to the chase.

What kind of income do they think this two-bed terrace could earn?

I'd expect this property to rent for between 450 and £500 per calendar month.

This property would go for probably between £475 to £500 per calendar month.

That's a pretty good assessment. I've managed to get 525 off the new tenant,

so I'm relatively pleased with that.

Gary's total outlay on this terraced house is £75,250.

When his tenants move in, paying rent of £525 per calendar month,

he'll earn a healthy rental yield of just over eight per cent.

But what if Gary decides to put the house on the market?

Has he added value?

In my opinion, this property would achieve around £90,000 in the current market.

In the current climate, being in the local area it's in,

I'd say we're probably around between £90,000 to £95,000.

So on Gary's investment of just over 75,000,

he's already looking at a profit of around £15,000.

That's a pretty good increase. What I paid for it, in a short space of time,

that's a good return on my investment already. Very pleased.

A success all round for Gary, then,

and I've a feeling he'll be heading straight back to an auction very soon.

Going forward, the way I want to purchase all my properties,

there's bargains to be had.

Typically 15 to 20% cheaper than purchasing on the open market through an estate agent.

So definitely it's the way forward for me.

We'll be back again with more thrills and spills from the auction room.

-So join us then for more Homes Under The Hammer!

-Bye!

-Bye!

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