0:00:02 > 0:00:06With the property market's ups and downs, be sure what you're buying.
0:00:06 > 0:00:13- And nowhere is this more true than in the auction rooms. - So join us now under the hammer!
0:00:38 > 0:00:42Buying at auction doesn't have to be a scary experience.
0:00:42 > 0:00:46If you do your research, you can bid with confidence.
0:00:46 > 0:00:50Today hopefully we'll meet some buyers who did just that.
0:00:50 > 0:00:54- Did they bag a bargain or get more than they bargained for?- Let's see.
0:00:55 > 0:00:59'In Liverpool, this house brings out the archaeologist in me.'
0:00:59 > 0:01:04I love unearthing things covered up by years of paint.
0:01:05 > 0:01:10'There's a commercial property in Kent that looks ready for action.'
0:01:10 > 0:01:14You could come straight in here and start your business.
0:01:15 > 0:01:20'And in Ripley, Derbyshire, something is not on the level.'
0:01:20 > 0:01:25This corner of the room is actually just...down!
0:01:26 > 0:01:32'All these properties went to auction. We'll find out who bought them and what they paid
0:01:32 > 0:01:36- 'when they went under the hammer.' - Thank you very much.
0:01:38 > 0:01:42'Can anyone visit Liverpool without referring to the Fab Four?
0:01:42 > 0:01:49'Clearly not, as this is Penny Lane, reputedly where Lennon and McCartney caught the bus to the city centre.
0:01:49 > 0:01:56'Fast forward to the present and I've found an opportunity to turn pennies into pounds,
0:01:56 > 0:02:01'round the corner in the popular student area of Wavertree.'
0:02:01 > 0:02:05This is Studentville! Studentland, Student Central.
0:02:05 > 0:02:12Whatever you want to call it, you would be mad to consider doing anything other with this property
0:02:12 > 0:02:14than renting it out to students.
0:02:14 > 0:02:19End terrace, three bedrooms and a guide price of 90,000 quid.
0:02:20 > 0:02:26'From the outside at least this looks quite a smart red-brick Edwardian terraced house.
0:02:26 > 0:02:31'It's double-glazed, has an alley at the side and access to the rear.'
0:02:31 > 0:02:38So what's it like? Well, first impressions are quite neat and tidy. Doesn't smell damp or anything.
0:02:38 > 0:02:41And I wonder... Staircase here.
0:02:42 > 0:02:46Oh, yeah. Fantastic. Beautiful original spindles there.
0:02:46 > 0:02:52I love that feeling that you can unearth things covered up by years of paint.
0:02:52 > 0:02:58Large front room there. That, I think, could probably be turned into a bedroom
0:02:58 > 0:03:02to maximise your income from student lets.
0:03:02 > 0:03:06A smallish kitchen there. It needs complete refurbishment,
0:03:06 > 0:03:13but you can get away with that in a student house. A real good room here for your social room,
0:03:13 > 0:03:17your shared living room area. Not a bad size.
0:03:17 > 0:03:19Things like built-in cupboards.
0:03:19 > 0:03:25Oh, that's nice. In a way, this would make a beautiful family home,
0:03:25 > 0:03:30but we're thinking about the money. We're going to do students.
0:03:30 > 0:03:33# It's a cool place It's such a cool place... #
0:03:33 > 0:03:38'This could make cool student accommodation in more ways than one.
0:03:38 > 0:03:42'There's no central heating and with these sizable rooms,
0:03:42 > 0:03:49'I imagine it gets pretty cold here. But how cool would it be to have digs with these character features?'
0:03:49 > 0:03:54# Told you it's a cool place It's such a cool place... #
0:03:54 > 0:03:59'They're not just downstairs, but upstairs as well,
0:03:59 > 0:04:03'with two well-proportioned bedrooms with original fireplaces.
0:04:03 > 0:04:10'There's one smaller room, plus a bathroom that is a touch on the compact side.
0:04:10 > 0:04:14'With rejigging, you might get four bedrooms here plus a bathroom.
0:04:14 > 0:04:21'With one downstairs room a potential bedroom, that's five lettable rooms and a cool return.'
0:04:21 > 0:04:27There has been a trend in recent years away from traditional student accommodation like this
0:04:27 > 0:04:34to more purpose-built blocks with all the mod cons - laundry facilities and wifi.
0:04:34 > 0:04:37So will that affect this property?
0:04:37 > 0:04:43You know what? I don't think so. For a start, you are in the heart of student land here.
0:04:43 > 0:04:49Easy access to the universities, all the bars and clubs on your doorstep.
0:04:49 > 0:04:53And for many students it'll be their first time away from home.
0:04:53 > 0:04:58The chance of having your own front door and a bit more flexibility,
0:04:58 > 0:05:01I think they'll go for that. Much more fun.
0:05:01 > 0:05:04# I want it all
0:05:04 > 0:05:08# And I want it now... #
0:05:08 > 0:05:13'A park just over the road, lectures nearby and restaurants and bars aplenty.
0:05:13 > 0:05:17'This place ticks all the boxes for student accommodation seekers.
0:05:17 > 0:05:24'Money will have to be spent, though. It needs rewiring, central heating, kitchen, bathroom
0:05:24 > 0:05:28'and complete refurbishment. I'd also maximise the layout.
0:05:28 > 0:05:33'But there's a profit to be made. What does an estate agent reckon?'
0:05:33 > 0:05:36This will appeal to students
0:05:36 > 0:05:41and young urban professionals. It depends on how it is finished
0:05:41 > 0:05:48which market it would address. If finished in its traditional state, three bedrooms and a bathroom,
0:05:48 > 0:05:54it would appeal more, probably, to first jobbers than to students.
0:05:54 > 0:06:00If it was converted to allow more people to live in the house, then it's an ideal student house.
0:06:00 > 0:06:08There are options here, but which approach would make more financial sense for a house guided at £90,000?
0:06:08 > 0:06:14With money spent on updating it and keeping it in its present three-bedroom format,
0:06:14 > 0:06:20I would say that the selling price would be somewhere around £145,000.
0:06:20 > 0:06:27Turned into a five-bedroom student investment, I would see the sale price of this house
0:06:27 > 0:06:34to a professional investor at somewhere between £155,000 and £160,000.
0:06:34 > 0:06:40'Increasing the number of bedrooms doesn't massively increase the resale value,
0:06:40 > 0:06:43'but it will affect rental.'
0:06:43 > 0:06:50Keeping this house in its current state, modernising it, it would achieve around £675 per month.
0:06:50 > 0:06:56Students in this area would be looking to pay £50-£60 per room per week.
0:06:56 > 0:07:03'£60 a week on a student rental with five bedrooms would generate around £14,000 a year
0:07:03 > 0:07:10'on an investment of around £100,000. As you can see, it's a no-brainer.'
0:07:10 > 0:07:17Sometimes the most obvious answers are the right ones. This place just has to be a student let.
0:07:17 > 0:07:24You don't need to study the figures too hard or have a degree in development to see it's first class.
0:07:24 > 0:07:26Let's see who agreed.
0:07:29 > 0:07:33Lot 32 is the vacant end terrace property in the Wavertree area.
0:07:33 > 0:07:36How about 80,000 for this one?
0:07:36 > 0:07:4080 at the back of the room. 80,000. At 80,000.
0:07:40 > 0:07:43I'll take another 2. 82. 84?
0:07:43 > 0:07:4684. 86. 88.
0:07:46 > 0:07:4890,000.
0:07:48 > 0:07:5092.
0:07:50 > 0:07:5494. 96. 98... 98.
0:07:54 > 0:07:57New money. 100,000?
0:07:57 > 0:08:0098, new money. 99 if it helps.
0:08:00 > 0:08:0499,000. 100,000. 101?
0:08:04 > 0:08:06101.
0:08:06 > 0:08:08102? 101, then.
0:08:08 > 0:08:11New money again. 101,000.
0:08:11 > 0:08:16Sneaking in at the last minute. Good tactics. At 101.
0:08:16 > 0:08:19First time again at 101. Second time.
0:08:19 > 0:08:23All finished now? £101,000.
0:08:23 > 0:08:29- Yours. Thank you very much. - 'The successful bidder at 101,000
0:08:29 > 0:08:33'was full-time property developer and local Liverpool man John.
0:08:33 > 0:08:39'He's a joiner and has a substantial portfolio of residential and commercial properties,
0:08:39 > 0:08:43'a number of which are already student lets.'
0:08:43 > 0:08:47John, lovely to meet you. Why did you want to buy this?
0:08:47 > 0:08:53Basically, it's what I do for a living. We buy these properties all the time at auction.
0:08:53 > 0:09:00It's basically the location for me round here. I do a lot of student lets and that.
0:09:00 > 0:09:05- It's an ideal location.- Why are you a big fan of student lets?
0:09:05 > 0:09:11The return I get on the properties, which is a lot more than a single occupancy.
0:09:11 > 0:09:18I do plan on putting five students in this one, which will bring a much better return than a family.
0:09:18 > 0:09:23'John runs his lets on annual contracts from July 1st each year
0:09:23 > 0:09:30'and charges half-rent in the summer holidays, but with the standard rate for a room at £60 per week,
0:09:30 > 0:09:36'bills not included, he could expect to see an annual return of £11,000-£14,000,
0:09:36 > 0:09:40'depending on how many rooms he lets out in this house.'
0:09:40 > 0:09:47- So what are you going to do? - We'll gut this one 100%, everything back to the brickwork.
0:09:47 > 0:09:51Everything. Every room, ceiling, walls. Everything will be out.
0:09:51 > 0:09:58We'll try to leave the original features on the ceiling, but new walls, rewired, re-plumbed,
0:09:58 > 0:10:03new damp course. We've already had double-glazed windows done.
0:10:03 > 0:10:08It'll have a fitted kitchen, four bedrooms upstairs with a shower-bathroom in the middle.
0:10:08 > 0:10:16- Upstairs, we'll take every wall out. - Oh?- And make four good-sized bedrooms with a shower/bathroom.
0:10:16 > 0:10:20And then downstairs, this will become a bedroom.
0:10:20 > 0:10:23The rear room will be communal.
0:10:23 > 0:10:28There's a small outrigger which was a coal shed or wash house.
0:10:28 > 0:10:32We'll access that off the rear lounge as a second bathroom.
0:10:32 > 0:10:35Why hack all the plaster off?
0:10:35 > 0:10:39A lot of it will be addled, so it will all be loose.
0:10:39 > 0:10:45When we do the damp course, you have to take three foot of plaster off anyway.
0:10:45 > 0:10:48The rest becomes loose, so it's just as easy.
0:10:48 > 0:10:55We're also doing it for the long-term. We don't want to come back to problems other than maintenance.
0:10:55 > 0:11:01- It's 20 years it'll be done for. - Get it right first time.- Basically.
0:11:01 > 0:11:06# Get it right the first time That's the main thing... #
0:11:06 > 0:11:12'Stripping it all back to basics is also a chance to address cracks or any structural issues.
0:11:12 > 0:11:18'John hopes to do the work in 12-13 weeks so that it's ready for the next student intake.
0:11:18 > 0:11:21'He doesn't believe in half measures.'
0:11:21 > 0:11:23What budget have you put aside?
0:11:23 > 0:11:30To do the whole property, we're probably budgeting around £23,000-£25,000.
0:11:30 > 0:11:33That will be for the furnishings as well inside.
0:11:33 > 0:11:41- Will you get involved in that? - Very much. All the time.- What do you do?- I'm a joiner by trade.
0:11:41 > 0:11:47Basically, we're hands on. We have everything going every day, the two of us working.
0:11:47 > 0:11:50So it'll be a big project, you know.
0:11:50 > 0:11:55- Congratulations, well done. Good luck with it.- Thanks. Cheers.
0:11:56 > 0:12:04'I guess that with all John's experience, for him this is just another property for his portfolio.'
0:12:04 > 0:12:11Well, John certainly seems to have cracked the student market, but will this place be filled with students
0:12:11 > 0:12:15when we come back? Find out later in the show.
0:12:16 > 0:12:21Today I'm in Rainham, one of the Medway towns in north Kent,
0:12:21 > 0:12:27which also includes Gillingham, Chatham and Rochester. You can be in the capital in less than an hour,
0:12:27 > 0:12:30so it's great for commuters.
0:12:30 > 0:12:37I'm here to see a freehold semi-detached property. It had a guide of £40,000-£45,000.
0:12:37 > 0:12:43It's in the town and only a short walk to the train station, so the location couldn't be better.
0:12:43 > 0:12:49It doesn't look very homely, but that's because it's a commercial property. It's an office unit.
0:12:49 > 0:12:53I'm going to go inside to see what you get for your cash.
0:12:53 > 0:12:59'It doesn't look too bad, but double yellow lines is a real worry.
0:12:59 > 0:13:04'Parking restrictions are a bit of a no no for commercial units.
0:13:04 > 0:13:09'But it does look to be in good condition, which is a positive.'
0:13:13 > 0:13:18I know this place has B1 usage, which means predominantly offices,
0:13:18 > 0:13:23and, you know, it's a neat little unit, freshly-painted.
0:13:23 > 0:13:28It's not the biggest space, but this is ideal for a little business.
0:13:28 > 0:13:34Somebody's already worked from here. Lots of desks are set up. You've got a small kitchen space.
0:13:34 > 0:13:38There isn't actually a kitchen in it, so you'd have to install one.
0:13:38 > 0:13:42I also see a little bit of damp, so I'd check out the roof.
0:13:42 > 0:13:49A little toilet. You could come straight in and start on day one. It really is ready to go.
0:13:49 > 0:13:56'That's a bonus for any business. However, there are further options for the more adventurous.'
0:13:56 > 0:14:01I would love to get that stepladder down and nose around that loft
0:14:01 > 0:14:07to see if it's possible to improve the square footage. You could put a dormer in.
0:14:07 > 0:14:12You could even lower this ceiling. It's a wasted area at the moment.
0:14:12 > 0:14:16This unit would definitely benefit from some additional space.
0:14:16 > 0:14:23'It could also do with an outside area at the back, which it currently doesn't have.
0:14:23 > 0:14:27'There is a small bit of land, but it's not part of the freehold.
0:14:27 > 0:14:31'Inquiries could be made about purchasing this,
0:14:31 > 0:14:37'although it does depend on who wants this property and for what. It may suit them as it is.'
0:14:37 > 0:14:44# I want you just the way you are... #
0:14:45 > 0:14:51This is something that caught my eye. The auction catalogue hints at the potential for conversion.
0:14:51 > 0:14:55So you could change the use from commercial to residential.
0:14:55 > 0:15:01With so many residential properties here, the council could look favourably on that.
0:15:01 > 0:15:05Having said that, planning permission is nearly always a gamble
0:15:05 > 0:15:11and I'd advise the buyer to inquire before the auction and not after.
0:15:11 > 0:15:18A one-bedroom house in this area could achieve £100,000 so it could stack up financially.
0:15:18 > 0:15:23'So with a guide price of £40,000-£45,000,
0:15:23 > 0:15:29'what did a local estate agent make of this teeny space? I invited one along to find out.'
0:15:29 > 0:15:32It's a nice little office space.
0:15:32 > 0:15:38The problem is, if you're looking to sell something, you're off town centre.
0:15:38 > 0:15:43I think it would be better for somebody like an accountant, taxi service,
0:15:43 > 0:15:46where they don't need passing trade.
0:15:46 > 0:15:52'How about changing it entirely and altering its use to make it residential?'
0:15:52 > 0:15:59You'd need all the building rather than just part of it to make it a viable proposition.
0:15:59 > 0:16:04'How much could the new owner make in rent here?'
0:16:04 > 0:16:07It would be somewhere between £75-£100 per week.
0:16:07 > 0:16:12- 'And if they sold it on?' - I think if I was to put this on the market,
0:16:12 > 0:16:16once it had the jobs done, some damp issues,
0:16:16 > 0:16:20I'd be looking to market it at around £45,000.
0:16:20 > 0:16:26Perhaps giving a guide of £40,000-£50,000 and see what offers come in.
0:16:26 > 0:16:31You can keep this as a commercial unit or apply for change of use
0:16:31 > 0:16:35and perhaps turn this into a residential property.
0:16:35 > 0:16:41There's also room to go up into the loft. I'd find out who owns that land behind this
0:16:41 > 0:16:48and perhaps create a garden. This is a good one to go for. Let's see who else thought so.
0:16:50 > 0:16:54Lot 37 is an outstanding value refurbished office
0:16:54 > 0:16:58in good condition close to the town centre and train station.
0:16:58 > 0:17:03Start me where you will. 38? 38,000. I'm on the way.
0:17:03 > 0:17:08At 38 I have. 40 I'm looking for. £40,000 bid do I see?
0:17:08 > 0:17:12£40,000 bid I have. And 2 now, if you like. 42?
0:17:12 > 0:17:16At £40,000 in the door. 42 I'm looking for.
0:17:16 > 0:17:22If we're all done at £40,000, for the first time. £40,000 to the lady in the blue
0:17:22 > 0:17:29for the second time. £40,000 for the third and final time. In the door at £40,000.
0:17:29 > 0:17:31You've got it. £40,000.
0:17:34 > 0:17:39'The successful bid of £40,000 was placed by businesswoman Pamela.
0:17:39 > 0:17:43'She needed bigger premises for her personal care business.
0:17:43 > 0:17:48'I went back there to meet her and hear her plans for the place.'
0:17:48 > 0:17:54- Pamela, lovely to meet you. Congratulations.- Thank you. - Tell me about the history of this
0:17:54 > 0:18:01- and why you wanted to buy it. - I've been looking for a long time for a property to put my office into.
0:18:01 > 0:18:07At the moment, we rent on the high street and it would have been lovely to have found somewhere there,
0:18:07 > 0:18:11but they're just too expensive and not a lot comes up.
0:18:11 > 0:18:17This place was advertised and I braved it, went along, held my card up
0:18:17 > 0:18:19and I bought it!
0:18:19 > 0:18:23- Are you happy with the price you paid?- Very happy.
0:18:23 > 0:18:29'As well she should be because Pamela's top limit was £45,000,
0:18:29 > 0:18:34'so she's delighted she secured this for only 40 grand.
0:18:34 > 0:18:39'It suits her perfectly as she's planning on running her business from here.
0:18:39 > 0:18:43'She currently rents nearby so moving shouldn't be an upheaval.'
0:18:43 > 0:18:47- So what is it that you do? - We've got a company of home helps,
0:18:47 > 0:18:51helping to maintain people in their own homes.
0:18:51 > 0:18:58And professional couples on our books can have the weekend to themselves. Their housework is done for them.
0:18:58 > 0:19:02It's a service for anybody, really.
0:19:02 > 0:19:06- How many people work for you? - I have 46 at the moment
0:19:06 > 0:19:11and it's increasing all the time because I have new clients all the time.
0:19:13 > 0:19:17'Pamela's business involves caring for people in their own homes
0:19:17 > 0:19:22'by helping out with shopping, cooking and cleaning.
0:19:22 > 0:19:27'Her dedicated work has won her several awards over the years.
0:19:27 > 0:19:33'Fortunately, most of her 46 employees aren't office-based or it might get a little cramped,
0:19:33 > 0:19:38'but one person who will benefit is employee and friend Tracy.
0:19:38 > 0:19:46'She came along to view her new workplace and I caught up with her to see how she feels.'
0:19:46 > 0:19:50- How long have you worked for Pamela? - In total, about 12 years.
0:19:50 > 0:19:55- How do you feel about the new move? - Very excited, especially for Pamela.
0:19:55 > 0:19:59Why do you think it'll be a better premises for you?
0:19:59 > 0:20:06Just because it will be Pamela's. It's like a new venture, although the business is the same.
0:20:06 > 0:20:09It'll be all fresh and new.
0:20:09 > 0:20:15- Can you see yourselves being here for years?- Oh, yes. Onwards and upwards. It's very busy, so yes.
0:20:15 > 0:20:17Fingers crossed!
0:20:17 > 0:20:22# Come on, come on Let's work together... #
0:20:22 > 0:20:28'The company has already been running for 20 years, although Pamela only took over 6 years ago.
0:20:28 > 0:20:34'The move was to create an asset for the business, plus, long-term, a little pension pot for herself.
0:20:34 > 0:20:41'While there's no major work ahead here, Pamela's aware of the damp problem at the rear.'
0:20:41 > 0:20:46I know the garden outside the back is a couple of feet higher than inside.
0:20:46 > 0:20:50And I know the previous owner has replastered that.
0:20:50 > 0:20:55I'm not sure whether they put in damp-proof or tanked it.
0:20:55 > 0:21:03I tend to think they probably just plastered over it. That's the first thing I'll be investigating.
0:21:03 > 0:21:09Are you going to change the layout? I know it's not the biggest place, but you have potential to go up.
0:21:09 > 0:21:16That's what I'm hoping for. I haven't ventured up there yet, but that will be the next step,
0:21:16 > 0:21:22to see whether I can put dormers up and have another office. Sometimes, when the pair of us are in
0:21:22 > 0:21:28and a girl wants to come in for a private chat, it's always nice to have a spare room
0:21:28 > 0:21:31and not have to go to the kitchen.
0:21:31 > 0:21:37'So extending into the loft is the plan, once Pamela gets permission.
0:21:37 > 0:21:42'She's given herself a couple of months to address the damp issue.
0:21:42 > 0:21:46- 'What sort of budget is she working to?'- It's really difficult.
0:21:46 > 0:21:53If I get permission to go up there, I have no idea how much... no idea what work is involved.
0:21:53 > 0:21:59But just the office part, I mean, £5,000,
0:21:59 > 0:22:06- £10,000...- Wow.- Whatever it costs to get the damp done and new office equipment and kitchen.
0:22:06 > 0:22:11- Is anything worrying you about having purchased this?- No.
0:22:11 > 0:22:17I'm quite calm and serene about it at the moment. Fingers crossed that that carries on.
0:22:17 > 0:22:22Good luck with this business. I'm sure it'll be a huge success.
0:22:22 > 0:22:27- It'll be great to come back and see what you've done.- Thank you.
0:22:27 > 0:22:33Pamela describes herself as serene and calm, but will she be so relaxed on moving day?
0:22:33 > 0:22:39And will she go up into the loft and create that all-important private room?
0:22:39 > 0:22:42Join us later in the programme to find out.
0:22:42 > 0:22:47'Coming up: in Ripley, there's a common problem in this house.'
0:22:47 > 0:22:51The only way to access the loo is through the second bedroom.
0:22:52 > 0:22:58'In Rainham, has Pamela grabbed that extra space in the loft?'
0:22:58 > 0:23:02A couple of builders have said it is doable.
0:23:03 > 0:23:08'First, did John's total overhaul leave any room for problems?'
0:23:08 > 0:23:12Everything's being ripped out anyway.
0:23:16 > 0:23:21'Now we head to the popular student area of Wavertree, Liverpool,
0:23:21 > 0:23:28'where full-time property developer John bought this three-bed end of terrace house for £101,000.
0:23:29 > 0:23:34'He saw its future as a student rental goldmine.
0:23:34 > 0:23:39'To get the best out of it, John wasn't going to pussyfoot.'
0:23:39 > 0:23:41Tell me what you're going to do.
0:23:41 > 0:23:45We're going to gut this 100%. Everything back to the brickwork.
0:23:45 > 0:23:49- Upstairs, we'll take every wall out upstairs.- Oh?
0:23:49 > 0:23:53And make four good-sized bedrooms with a shower/bathroom.
0:23:53 > 0:23:56'John was aiming for a 12-13 week turnaround
0:23:56 > 0:24:04'to take advantage of the next student intake. As a joiner by trade, he'd get his hands dirty.
0:24:06 > 0:24:12'Three and a half months later, we returned and it looked like John has been very busy.
0:24:13 > 0:24:19'The front living room is now a comfortable student pad with all the furnishings supplied.
0:24:19 > 0:24:25'Down the renovated hall, the tired kitchen has given way to new units
0:24:25 > 0:24:29'ready for those pots and pans to be used.
0:24:29 > 0:24:32'Next door, the lounge has had an impressive makeover,
0:24:32 > 0:24:39'ready for those wild student parties. Er, I mean those quiet evenings studying.'
0:24:39 > 0:24:44In this room here, we've created a communal area for the students,
0:24:44 > 0:24:46which is nice and cosy, basically.
0:24:46 > 0:24:52Enough seating for five students, a dining table and chairs.
0:24:52 > 0:24:57Here we've also installed an intercom system connected to the front door.
0:24:57 > 0:25:03That's added security for the students. They can see who's coming and going.
0:25:03 > 0:25:05I'm quite pleased with this.
0:25:05 > 0:25:11This was the brick wall we knocked through for an extra bathroom.
0:25:11 > 0:25:19We've put a shower room in and done a lot of extra work. It's really paid off. I'm pleased.
0:25:20 > 0:25:25'I reckon John must be most pleased with the renovated bedrooms.
0:25:29 > 0:25:36'The general layout stayed the same, but by creating new walls, each room has the same square footage.
0:25:38 > 0:25:44'By shifting the side wall and doorway, the back bedroom has been split to allow for a bathroom.'
0:25:51 > 0:25:57What we've done up here is we've taken every wall out and created four double bedrooms,
0:25:57 > 0:26:01with all new furniture. In the bathroom area here,
0:26:01 > 0:26:07we've created a shower room, so there's two bathrooms. It's worked out really well.
0:26:07 > 0:26:13'Students nowadays expect decent living standards and John certainly won't disappoint them
0:26:13 > 0:26:18'with these five good-sized bedrooms and an excellent finish throughout.
0:26:20 > 0:26:26'And if they want to enjoy the afternoon sun, the rear yard has had a makeover,
0:26:26 > 0:26:28'ready for relaxing or a barbecue.
0:26:28 > 0:26:34'This place may be basic, but getting back to basics was part of John's plan.'
0:26:34 > 0:26:39Everything's been back to the brickwork. It had a 100% rip out.
0:26:39 > 0:26:44All new double-glazed windows, fully central heated and re-plumbed,
0:26:44 > 0:26:49new damp course. Basically, 100% replastered.
0:26:49 > 0:26:54All the woodwork's brand new, fully rewired. Everything, basically.
0:26:54 > 0:27:00'The original house wasn't in a bad state, but John's philosophy is no difficulties are faced now
0:27:00 > 0:27:05- 'or in the future.'- We don't normally come across problems.
0:27:05 > 0:27:09Everything's being ripped out and replaced with brand new stuff.
0:27:09 > 0:27:16We don't want to come back in 18 months with the tenants saying this fell off or we have damp here.
0:27:16 > 0:27:21We expect to come back for maintenance, but nothing structural.
0:27:21 > 0:27:23# We were built to last
0:27:26 > 0:27:28# On until forever... #
0:27:28 > 0:27:34'It doesn't mean a wholesale rip-out of the old house. John's retained some original features
0:27:34 > 0:27:39'like the living room mouldings and the ceiling rose, which give character,
0:27:39 > 0:27:44'but doing such a complete renovation means a healthy budget.'
0:27:46 > 0:27:52We spent about £24,000 on the property, including all the furnishings and fixings.
0:27:52 > 0:27:57I did budget for £25,000, so we've come in under budget.
0:27:57 > 0:28:01'For such a major overhaul, that's good news.
0:28:01 > 0:28:08'Added to the purchase price of £101,000, John's total spend on the property is 125 grand.
0:28:08 > 0:28:14'All the work was done in 46 days, so he's got a lot to be pleased about.'
0:28:14 > 0:28:19This one's finished. It's fully let for the academic year to five girls.
0:28:19 > 0:28:26So we're on to other properties now. We've got other ones running, so on to the next one.
0:28:27 > 0:28:31John doesn't hang around, but with the house ready and waiting
0:28:31 > 0:28:34for its new tenants, it's time to find out
0:28:34 > 0:28:40what two local estate agents think of John's £125,000 investment.
0:28:41 > 0:28:44The property has been fantastically finished.
0:28:44 > 0:28:48How the developer has put it for the student market is perfect.
0:28:48 > 0:28:52It suits ideally students who are coming out of halls.
0:28:52 > 0:28:57In their first year, they've had en-suite facilities, the quality of fittings are quite high.
0:28:57 > 0:29:01To come into a property like this will really appeal to that market.
0:29:03 > 0:29:08I think it's a fantastic property. I think it's done to a really good standard.
0:29:08 > 0:29:11It doesn't need any work done to it at all.
0:29:11 > 0:29:15I particularly like the fact that it's got two bathrooms
0:29:15 > 0:29:19which is beneficial for families or students moving in.
0:29:19 > 0:29:23The finish is fantastic. You could move in and not have to do anything.
0:29:23 > 0:29:28There's no doubting the standard of work, but with no plans to sell,
0:29:28 > 0:29:32has John got his lean, mean rental machine working to full capacity?
0:29:34 > 0:29:38We'd look at valuing it at a maximum £70 per week per student.
0:29:38 > 0:29:43Probably in a property like this, the pitch would be £60, £65 a week.
0:29:43 > 0:29:45I think that's reasonable.
0:29:45 > 0:29:49I've let the property for £60 per person already,
0:29:49 > 0:29:53so I'm more than pleased with 60 or 70, yeah. That's great.
0:29:53 > 0:29:56No wonder John's smiling!
0:29:56 > 0:30:01His annual rental income on the place will be approximately £14,000.
0:30:01 > 0:30:05That would give him an excellent 11% yield.
0:30:05 > 0:30:07Bearing in mind his 125 grand outlay,
0:30:07 > 0:30:13the estate agents reckon he could achieve a possible £155,000 if he sold,
0:30:13 > 0:30:15meaning a potential 30 grand profit.
0:30:15 > 0:30:18That would do very nicely,
0:30:18 > 0:30:22but somehow I don't see that changing his plans.
0:30:23 > 0:30:29I'm planning on obviously continuing letting it now for the foreseeable future.
0:30:29 > 0:30:33It'll just go in the mix with all the rest of the properties
0:30:33 > 0:30:37and obviously keep them fully let for the next ten years, hopefully.
0:30:41 > 0:30:47I'm ten miles north of Derby in the former industrial town of Ripley,
0:30:47 > 0:30:50once a centre for mining with an impressive steelworks.
0:30:50 > 0:30:56It's now commonly viewed as an olde-worlde tourist destination popular with commuters.
0:31:00 > 0:31:04The town of Ripley has a motto - "character thrives on hard work."
0:31:04 > 0:31:10The big question is, how much hard work will the property that I'm here to see demand?
0:31:10 > 0:31:13From the outside, hopefully not too much.
0:31:13 > 0:31:18It's a two-bedroom semi-detached. It had a guide price of just £44,000.
0:31:18 > 0:31:21Hmm... Let's take a look inside.
0:31:21 > 0:31:28So how hard can it be to make money out of a property that was guided at just £44,000
0:31:28 > 0:31:32when the average house price around here is 70,000 to 80,000?
0:31:32 > 0:31:35It has a decent roof, a side entrance to the rear
0:31:35 > 0:31:39and potential space at the front for off-street parking.
0:31:39 > 0:31:41It certainly shows some promise.
0:31:41 > 0:31:45What's on offer? A reasonable-sized lounge here,
0:31:45 > 0:31:47then through to...
0:31:47 > 0:31:50Hang on a minute. What is going on in this corner?
0:31:50 > 0:31:55This corner of the room is actually just down.
0:31:56 > 0:31:58This needs investigating.
0:32:00 > 0:32:03There you go. I didn't notice it when I first walked in.
0:32:03 > 0:32:09In that corner on that slab, look how it's all green algae and moss, plants growing out of it.
0:32:09 > 0:32:14In fact, if you look up there, that guttering looks like it's been dripping.
0:32:14 > 0:32:19That's caused a problem there, but we're looking at something a bit more serious.
0:32:19 > 0:32:24The whole area is a mining area, so there could be history of subsidence.
0:32:24 > 0:32:29If you look at the front of the property, it's separating from the house next door.
0:32:29 > 0:32:34This is only a first glance. You want to have this checked out by a structural surveyor.
0:32:34 > 0:32:38But alarm bells should be ringing for sure. Let's carry on.
0:32:38 > 0:32:42# Lean on me When you're not strong... #
0:32:42 > 0:32:46I think potentially this could be a big issue.
0:32:46 > 0:32:51It may be historic, but a structural survey is vital to get to the bottom of it,
0:32:51 > 0:32:57otherwise, you might find this isn't as attractive an investment as it first appeared.
0:32:57 > 0:33:01Bit of a shame, really, because the house itself is not in bad condition
0:33:01 > 0:33:05if you set aside the potentially major structural problems,
0:33:05 > 0:33:09but it looks like it's been well looked after, it doesn't smell damp.
0:33:09 > 0:33:13The rooms are a good size and double glazing is nice to have.
0:33:13 > 0:33:18Leading off the back reception room is quite a reasonable, if dated kitchen.
0:33:18 > 0:33:20The downstairs space isn't bad,
0:33:20 > 0:33:26but there's no central heating and that will ratchet up the refurbishment costs.
0:33:26 > 0:33:29What else does this house offer?
0:33:29 > 0:33:35This is a traditional little cottage in a traditional mining town, so what do you expect out the back?
0:33:35 > 0:33:41Bit of a yard? Lovely surprise - there's also a fantastic little garden.
0:33:41 > 0:33:47This garden is a real plus. It even comes with a potting shed and an outside toilet.
0:33:47 > 0:33:52In fact, its size puts this house firmly into the potential family home category.
0:33:52 > 0:33:57Two decent-sized bedrooms upstairs reinforce that potential
0:33:57 > 0:34:00until you see where the bathroom is.
0:34:02 > 0:34:06It was all looking OK, then in the bathroom it starts going wrong.
0:34:06 > 0:34:11You've got the bathroom there, this silly waste of space here and it gets worse
0:34:11 > 0:34:17because the only way to access the bathroom is through the second bedroom. Not ideal at all.
0:34:17 > 0:34:23The obvious thing to do is maybe put a corridor in. This bedroom could suffer a bit of loss of space
0:34:23 > 0:34:27and it would be worth it to have a separate access to the bathroom.
0:34:27 > 0:34:32It's not ideal to walk this way to get to the bathroom.
0:34:32 > 0:34:38But it wouldn't be too difficult to put in a partition corridor and not too expensive either.
0:34:38 > 0:34:41So how does this house shape up overall?
0:34:41 > 0:34:45The space is good, if in need of a facelift. The garden is great,
0:34:45 > 0:34:48but structurally there are a few question marks
0:34:48 > 0:34:52over this property. What does a local estate agent think?
0:34:52 > 0:34:54The house is a little bit dated.
0:34:54 > 0:34:58It's a bit tired. It's had some money spent on new windows,
0:34:58 > 0:35:00but will need a bit of modernisation.
0:35:00 > 0:35:04But there's more than a bit of updating needed here.
0:35:04 > 0:35:07There are layout issues to contend with as well.
0:35:07 > 0:35:11As far as access to the bathroom is concerned, there are two options.
0:35:11 > 0:35:17One is to put up with it. The second is to put a corridor in which reduces the size of the second bedroom,
0:35:17 > 0:35:19but makes the home more practical.
0:35:19 > 0:35:25If the owners decide not to corridor off the second bedroom, that will hit demand on the house.
0:35:25 > 0:35:32It will hit the price that they're going to achieve and it's likely to be perhaps £25 or so a month less.
0:35:32 > 0:35:35The rental return could be hindered by the bathroom's position,
0:35:35 > 0:35:39but what rent could you achieve if it was partitioned off?
0:35:39 > 0:35:46In terms of rental, once it's freshened up, we'd be looking at round about £400 a calendar month.
0:35:46 > 0:35:48And how would it do if sold on?
0:35:48 > 0:35:53Depending on the standard of refurbishment carried out, it may be £70,000 to £75,000.
0:35:53 > 0:35:59So, provided this house doesn't fall down, on balance, it could make a solid investment.
0:36:01 > 0:36:06So, a nice little house in good condition, good space, benefits of the garden.
0:36:06 > 0:36:10Why did it have that £44,000 guide price? It seems pretty low.
0:36:10 > 0:36:14Could it be something to do with the potential subsidence?
0:36:14 > 0:36:17Let's see who went for it at auction.
0:36:20 > 0:36:24Lot number 33, a two-bedroomed, semi-detached property.
0:36:24 > 0:36:28UPVC, double-glazed, got scope for some upgrading and improvement.
0:36:28 > 0:36:34Freehold property. Proxy bid in on this property too, ladies and gentlemen.
0:36:34 > 0:36:36I'll start it with a proxy bid at £48,000.
0:36:36 > 0:36:4048,000. 49 somewhere else? 49 at the back.
0:36:40 > 0:36:4350,000. At 50,000. 51?
0:36:43 > 0:36:4751. 52. 53?
0:36:47 > 0:36:4953. 54.
0:36:49 > 0:36:5055?
0:36:50 > 0:36:5355. 56?
0:36:53 > 0:36:56£56,000. 57 with me on the proxy bid.
0:36:56 > 0:37:0057. 58, a fresh bidder. At 58.
0:37:00 > 0:37:06Both out there. 59 with me on a proxy bid. At 59,000. 60 may I say?
0:37:06 > 0:37:09At 60,000. 61 with me.
0:37:09 > 0:37:1362? 62. 63 with me.
0:37:13 > 0:37:1664. 65?
0:37:16 > 0:37:2065? I'll take a half if it'll help you. 65.
0:37:20 > 0:37:24Across by the doorway at 65 and a half? 65 and a half?
0:37:24 > 0:37:27No? First and last bid, was it?
0:37:27 > 0:37:31£65,500 on the front row.
0:37:31 > 0:37:33Once, twice, third time...
0:37:33 > 0:37:36Sold at 65 and a half, thank you.
0:37:36 > 0:37:43'At 65,500, the successful bidders for the two-bed Derby house were Karen and Steve.
0:37:43 > 0:37:47'Karen has built up a decent-sized portfolio of rentals over the years
0:37:47 > 0:37:52'and partner Steve works alongside her while also running his own business.
0:37:52 > 0:37:57'I met them to find out why they were buying more houses in the current market.'
0:37:57 > 0:38:02- Karen, Steve, pleased to meet you. - Thank you.- Tell me why you wanted to buy this place.
0:38:02 > 0:38:09We're going to rent it out initially and sell it once the market recovers, so we'll rent it out short-term.
0:38:09 > 0:38:12- Is this something you've done before?- Yes.
0:38:12 > 0:38:17We've got quite a few rental properties, but they are long-term rentals.
0:38:17 > 0:38:23Since the market has taken a downward spiral, we have bought several properties with the same intentions -
0:38:23 > 0:38:26rent them out and sell them once the market recovers.
0:38:26 > 0:38:30- Good. So you've been buying while things have been going down?- Yeah.
0:38:30 > 0:38:35- And roughly how many properties have you got that you're managing? - Quite a few.
0:38:35 > 0:38:39- More than ten and less than a hundred?- Yes.
0:38:39 > 0:38:44'Karen used to be an accountant, but decided to concentrate on properties five years ago.
0:38:44 > 0:38:48'She now works full-time on managing and building up her rental portfolio
0:38:48 > 0:38:52'and Steve maintains and helps renovate the houses.
0:38:52 > 0:38:55'Together, they make a formidable team.'
0:38:56 > 0:38:59What did you like about this place?
0:38:59 > 0:39:05We actually viewed three or four properties before we went to the auction that we were interested in
0:39:05 > 0:39:08and this one was sort of top of the list.
0:39:08 > 0:39:10Why did this one make it to the top?
0:39:10 > 0:39:15Because the house is in good condition. It's been well looked after.
0:39:15 > 0:39:21There's not a great deal of work to do to this one and it's ready for renting out.
0:39:21 > 0:39:26- What do you look for when you're buying houses?- We always buy freehold, never leasehold.
0:39:26 > 0:39:30We tend to buy houses rather than flats or apartments
0:39:30 > 0:39:34because you tend to get a family in and they're easier to rent.
0:39:34 > 0:39:38Minimum of two bedrooms, something reasonably spacious
0:39:38 > 0:39:41and a garden,
0:39:41 > 0:39:46we can make off-street parking and close to the town centre.
0:39:46 > 0:39:49- So this one really fitted the bill? - It did, yeah.
0:39:49 > 0:39:52# Now I see
0:39:52 > 0:39:55# The way it's meant to be
0:39:56 > 0:40:00# Cos you're so right for me... #
0:40:00 > 0:40:06'So this house was just right for them as it's a freehold house and has two bedrooms.
0:40:08 > 0:40:12'It's nice and spacious with a good-sized family garden,
0:40:12 > 0:40:16'so it does appear to meet all the criteria Karen and Steve check for,
0:40:16 > 0:40:19'but there are a few issues too.'
0:40:20 > 0:40:24Tell me exactly what you're going to do to this place to sort it out.
0:40:24 > 0:40:30The first job will be to put a partition upstairs in the back bedroom through to the bathroom.
0:40:30 > 0:40:36It'll be a stud wall construction, then a door off it into what will be the second bedroom.
0:40:36 > 0:40:42- So the second bedroom will shrink by the width of a corridor? - Yes.- Yes, that's right.
0:40:42 > 0:40:45And then you've got central heating and decoration.
0:40:45 > 0:40:49- So who's going to do the work?- The stud wall we'll take on ourselves.
0:40:49 > 0:40:56- We have a plumber that will come and do the central heating. Decoration, we'll do ourselves.- Right.
0:40:56 > 0:40:58Any idea of the budget so far?
0:40:58 > 0:41:03- We're working on a budget of approximately £5,000 to £5,500. - And timescales?
0:41:03 > 0:41:05- A month.- Right.
0:41:05 > 0:41:07- Quite quick then?- Yeah.- Yeah.
0:41:07 > 0:41:11Next week, we'll start getting quotes for the central heating.
0:41:11 > 0:41:17I'm tempted to replace the doors as well, so we'll probably get the doors replaced as well.
0:41:17 > 0:41:21'OK, that's the cosmetic and layout issues addressed,
0:41:21 > 0:41:25'but what about the perhaps more serious structural issues?'
0:41:25 > 0:41:32- I noticed that the house has a bit of a tilt to it.- Yeah.- Is that concerning you at all?- Not at all.
0:41:32 > 0:41:38Most houses in Ripley do have a bit of a tilt to them because it's an old mining town.
0:41:38 > 0:41:45- It's not too bad, so it doesn't bother me really.- Have you had a mining survey done?- Yes, we have.
0:41:45 > 0:41:50- And it's OK?- It's OK, yeah. - The garden's not going to open up into a...?- No, no.
0:41:50 > 0:41:56- Just that place where you're standing!- Yikes! Nice to talk to you. And I'm off(!)
0:41:56 > 0:41:59Good. Listen, congratulations. Well done.
0:41:59 > 0:42:03- I look forward to seeing how you get on.- Thank you.
0:42:03 > 0:42:05# If ever I fall... #
0:42:05 > 0:42:09'Let's hope there aren't any holes to fall through
0:42:09 > 0:42:14'and that Karen and Steve have fallen on their feet with this purchase.'
0:42:14 > 0:42:20Karen and Steve clearly know what they're doing when it comes to properties
0:42:20 > 0:42:24and in terms of the refurbishment they're along the right lines,
0:42:24 > 0:42:29but I am a bit concerned about the potential subsidence. That should never be taken lightly.
0:42:29 > 0:42:33They should get a good survey before they start any major work.
0:42:33 > 0:42:36Find out how they get on later.
0:42:39 > 0:42:44Time has passed since we saw our plucky buyers. I wonder how they've got on?
0:42:44 > 0:42:47- Have they been firing on all cylinders?- Let's find out.
0:42:48 > 0:42:53'It's back to Kent now and the Medway town of Rainham
0:42:53 > 0:42:58'where Pamela bought this small commercial unit at auction for 40,000.
0:42:59 > 0:43:04'She owns and runs a home help business which is currently based at rented offices,
0:43:04 > 0:43:10'so she's invested her own money to buy this place and give her own business a boost.'
0:43:10 > 0:43:15- Is there anything that's worrying you about having purchased this?- No.
0:43:15 > 0:43:21I'm quite calm and serene about it at the moment, so fingers crossed that that carries on.
0:43:21 > 0:43:25There was a damp problem at the rear, but Pamela hoped
0:43:25 > 0:43:28to have the office up and running in a few months.
0:43:28 > 0:43:34But when we returned eight months later, from the outside, there appeared to be little change.
0:43:37 > 0:43:40But inside, the office has been overhauled.
0:43:40 > 0:43:45The partition entrance has been removed to open up the floor space
0:43:45 > 0:43:49while the original office furniture has been kept and put to good use.
0:43:49 > 0:43:53The area has been redecorated and new central heating installed,
0:43:53 > 0:43:57making this a more comfortable place to do business.
0:43:59 > 0:44:03Pamela also made sure that staff comforts were catered for.
0:44:06 > 0:44:10When I bought the place, this whole wall was completely damp,
0:44:10 > 0:44:13probably up to about there,
0:44:13 > 0:44:16because the level outside was so high.
0:44:17 > 0:44:21It's all been dug out, a damp-proof course put in
0:44:21 > 0:44:26and eventually when it dried out, this was re-plastered and the cupboards put in,
0:44:26 > 0:44:30but we had to make sure it was dry first before the cupboards went in.
0:44:30 > 0:44:33And of course, we had to install the fridge.
0:44:33 > 0:44:38Hopefully, that rear damp problem has finally been fixed,
0:44:38 > 0:44:41but unfortunately, there was still the side wall.
0:44:42 > 0:44:48To solve the damp, the builder injected the wall and I think he did it twice.
0:44:48 > 0:44:51We still had a damp issue, so it was...
0:44:51 > 0:44:57We realised that the level out here was higher as well, a sort of gradient going up,
0:44:57 > 0:45:01so it was dug out and a membrane put in.
0:45:01 > 0:45:04And hopefully, that's cured it.
0:45:04 > 0:45:08Only time will tell, but back inside, along with the kitchen area,
0:45:08 > 0:45:13the WC has been totally upgraded with new units and cupboards.
0:45:13 > 0:45:16With the business here now up and running,
0:45:16 > 0:45:20Pamela is already looking to the loft for extra space.
0:45:20 > 0:45:23I did phone the local council.
0:45:23 > 0:45:28They couldn't see a reason why we couldn't go up in the roof,
0:45:28 > 0:45:32so I've had a couple of builders in and said it is doable.
0:45:32 > 0:45:38So, hopefully, we'll just have a nice, quiet bit for a while without any dust and dirt,
0:45:38 > 0:45:41then I'll go ahead and put another office up above.
0:45:41 > 0:45:46At the moment, Pamela shares the office with friend and employee Tracy,
0:45:46 > 0:45:50so there's no pressing need for that space.
0:45:50 > 0:45:56But for Tracy, moving to this office is definitely a move in the right direction.
0:45:56 > 0:45:58It's nice that it's ground floor.
0:45:58 > 0:46:02We were up a level before, so the girls come straight in to us.
0:46:02 > 0:46:07And it's just nice to be able to look out at road level, rather than above.
0:46:07 > 0:46:13We were on the high street, so we had the traffic noise. We don't get that here. It's quiet.
0:46:13 > 0:46:18It may be quieter, but having an office front on the ground floor has its moments.
0:46:18 > 0:46:23As it's a mirrored window, we do have people doing the peacock bit across
0:46:23 > 0:46:27and it's generally men, to be honest, which is very amusing,
0:46:27 > 0:46:31and some that really shouldn't even be looking at their reflection!
0:46:31 > 0:46:34# Here comes the mirror man
0:46:34 > 0:46:38# Says he's a people fan... #
0:46:38 > 0:46:40LAUGHTER
0:46:40 > 0:46:44Renovating the interior wouldn't have taken long,
0:46:44 > 0:46:48but time taken solving that recurring damp problem
0:46:48 > 0:46:54meant Pamela had to wait six months before setting up shop. Did the damp affect her five to ten grand budget?
0:46:54 > 0:47:00Eventually, I think that all that I've done has come to about six,
0:47:00 > 0:47:05possibly six and a half with paint and wallpaper, blinds,
0:47:05 > 0:47:07but they're sort of incidentals.
0:47:07 > 0:47:10The main work was probably about 6,000.
0:47:11 > 0:47:13With her £40,000 purchase price,
0:47:13 > 0:47:17Pamela's total outlay is a possible 46 and a half grand,
0:47:17 > 0:47:20so is it money well spent?
0:47:21 > 0:47:25We asked two local property experts what they thought
0:47:25 > 0:47:27of Pamela's investment.
0:47:28 > 0:47:31I must admit, it's such an improvement.
0:47:31 > 0:47:34When we first came, there was so much damp.
0:47:34 > 0:47:36You thought, "Where do you start?"
0:47:36 > 0:47:41But what they've done is really very nice - the units, the desk area.
0:47:41 > 0:47:45It's really lovely. People want to come in. They feel welcome in here.
0:47:45 > 0:47:48I think it's very good, actually.
0:47:48 > 0:47:52There's plenty of light. I like the floor finishes.
0:47:52 > 0:47:56Good heating system. I think it's been done very well, quite frankly.
0:47:56 > 0:48:00Both estate agents like the office space,
0:48:00 > 0:48:05but would Pamela's idea of moving into the loft be a good way of adding value here?
0:48:05 > 0:48:11It depends how much space you would create. Bear in mind that this is quite a small building.
0:48:11 > 0:48:17You'll lose about 10% of the ground floor area just by putting in a staircase.
0:48:17 > 0:48:22It would be much better for people to see you downstairs and leave the upstairs alone
0:48:22 > 0:48:28because you'll have to spend an awful lot of money just for a small extension of area.
0:48:28 > 0:48:35So it may be more trouble than it's worth, but have Pam's current efforts paid off?
0:48:35 > 0:48:40Bearing in mind her £46,500 outlay, what could a resale of the unit achieve?
0:48:40 > 0:48:47If we were going to sell the property, I think I'd be looking at somewhere around £40,000 to £50,000
0:48:47 > 0:48:50with the hope of getting towards the £50,000.
0:48:50 > 0:48:55I think you'd put it on the market and you'd look for offers of round about £50,000.
0:48:55 > 0:49:01It's very nice to hear that I've made some money on it already, but it's irrelevant.
0:49:01 > 0:49:08Maybe in five, ten years' time, I might think about selling, but at the moment, I'm quite happy.
0:49:08 > 0:49:14Yes, for Pamela, the real value of this little property is not in any current profit,
0:49:14 > 0:49:18but as a future home and base for her growing business.
0:49:18 > 0:49:22It's absolutely brilliant owning my own place.
0:49:22 > 0:49:25It's so much nicer than renting.
0:49:25 > 0:49:31We've got our own front door, our own kitchen. It's just absolutely wonderful.
0:49:39 > 0:49:44Back now to Derbyshire and the former mining town of Ripley.
0:49:44 > 0:49:49Karen and Steve had bought this two-bed semi-detached for £65,500.
0:49:49 > 0:49:54For 15 years, Karen's been building up a property portfolio.
0:49:54 > 0:50:00She sees the recent uncertainty in the housing market as an opportunity for some great business bargains.
0:50:00 > 0:50:05Since the market has taken a downward spiral, we have bought several properties
0:50:05 > 0:50:10with the same intentions - rent them out and sell them once the market recovers.
0:50:10 > 0:50:14- So you've been buying while things have been going down?- Yeah.
0:50:14 > 0:50:21With the uncertain state of the property market, that could prove to be a rather risky strategy.
0:50:21 > 0:50:27The house did have a slight tilt, although a mining report has given it a clean bill of health.
0:50:27 > 0:50:30But despite being structurally sound, it did have its problems,
0:50:30 > 0:50:36including a sloping floor and bathroom access through the back bedroom.
0:50:36 > 0:50:42But overall, Karen and Steve felt this place had all it needed to fit their criteria.
0:50:42 > 0:50:48When we returned 12 months later, the house didn't appear too different on the outside,
0:50:48 > 0:50:50but what about the inside?
0:50:50 > 0:50:56Well, the front room does look fresher, sporting new carpets and a lick of paint.
0:50:56 > 0:51:02And it seems Karen and Steve have already got the house to pay its way as tenants have now moved in.
0:51:04 > 0:51:08At the back, they freshened up the kitchen with some paint.
0:51:08 > 0:51:11Upstairs, there's a new partition wall in the bedroom,
0:51:11 > 0:51:14making a separate access to the bathroom.
0:51:16 > 0:51:19OK, it may mean a smaller back bedroom,
0:51:19 > 0:51:25but fixing that unworkable layout must be a great weight off Karen and Steve's mind.
0:51:26 > 0:51:32And just like the kitchen, the bathroom has had a lick of paint, giving it a new lease of life.
0:51:32 > 0:51:35Originally, for Karen and Steve,
0:51:35 > 0:51:40it seemed it just needed some plasterboards, paint and new carpets,
0:51:40 > 0:51:42but things are rarely that easy.
0:51:42 > 0:51:48It's a mining town and a lot of the properties around here have got subsidence.
0:51:48 > 0:51:50It wasn't too bad on this property,
0:51:50 > 0:51:57but we felt it would be beneficial to level the floor up in the front room where it dipped in a corner.
0:51:57 > 0:52:02The living room floor is now absolutely plumb-level, smooth enough to play snooker on.
0:52:02 > 0:52:05The house also had central heating installed
0:52:05 > 0:52:09which will keep the tenant warm and comfortable.
0:52:09 > 0:52:13With the main bedroom now decorated, everything inside is looking good,
0:52:13 > 0:52:17but Karen still felt the front needed some kerb appeal.
0:52:17 > 0:52:19We didn't do too many changes here.
0:52:19 > 0:52:25We had a nasty porch which was above the lintel there which we decided to take down
0:52:25 > 0:52:29and we didn't like the front door, so we had a new PVC front door put in.
0:52:29 > 0:52:33Apart from that, we didn't really do anything else.
0:52:33 > 0:52:35Well, it's enough to smarten up the front
0:52:35 > 0:52:40and at the back, the garden has also benefited from a tidy-up.
0:52:41 > 0:52:47The garden was OK. It was just a transition between the sale of the property and the work being done.
0:52:47 > 0:52:53It had become a bit overgrown, so it was a matter of tidying it up, cut the lawns, set the borders
0:52:53 > 0:52:57and fortunately, the tenant is keeping it looking nice.
0:52:59 > 0:53:03In general, the property was in fairly good nick.
0:53:03 > 0:53:08Karen and Steve reckon updating and sprucing it up has been relatively pain-free.
0:53:09 > 0:53:14- Yeah, really easy.- The easiest we've done, I would think.- Definitely.
0:53:14 > 0:53:20- It was clean and tidy. There was nothing major that needed doing. - That's one reason we bought it.
0:53:20 > 0:53:23# It's why I'm easy... #
0:53:25 > 0:53:29The house may not have given Karen and Steve any problems,
0:53:29 > 0:53:33but the same can't be said for their working relationship.
0:53:33 > 0:53:35- Terrible.- Volatile.
0:53:35 > 0:53:38But we're still here in one piece.
0:53:38 > 0:53:44I do all the labouring, running around, going to fetch materials in the van. I can decorate.
0:53:44 > 0:53:50I go to the tip, fill the skips. And Steve gets on with the rest, all the easy stuff.
0:53:50 > 0:53:52The more intense work I do.
0:53:54 > 0:54:00With that division of labour, the team took only four weeks to complete the makeover.
0:54:00 > 0:54:03They achieved the renovation within their budget of 5,000,
0:54:03 > 0:54:08but it seems the house might be in line for some more work.
0:54:09 > 0:54:15If and when we do sell it, obviously, that depends on the market and tenants, etcetera,
0:54:15 > 0:54:22but we will put a new kitchen and bathroom in and do some extra work in the downstairs rooms as well.
0:54:22 > 0:54:25For now, the house seems to be paying its way,
0:54:25 > 0:54:27but has it been a solid investment?
0:54:27 > 0:54:31With the property costing Karen and Steve £65,500,
0:54:31 > 0:54:37their spend of five grand on it pushes their total outlay to £70,500.
0:54:37 > 0:54:42We asked two local property experts what they thought of the place.
0:54:42 > 0:54:45The accommodation's laid out pretty well.
0:54:45 > 0:54:49You've got two separate reception rooms. The kitchen's a bit small.
0:54:49 > 0:54:53That's not uncommon for a property of this type.
0:54:53 > 0:54:59Upstairs, they've reconfigured the layout to provide independent access to the bathroom from both bedrooms.
0:54:59 > 0:55:03The owners have done a really nice job in improving
0:55:03 > 0:55:05and presenting the house.
0:55:05 > 0:55:09The decoration, style and corridor upstairs make a real difference.
0:55:12 > 0:55:17The property has been done up to a standard that's perfect for the rental market.
0:55:17 > 0:55:23If it was for resale, you'd have done a higher specification on the kitchen and bathroom, but perfect for rental.
0:55:23 > 0:55:27Karen and Steve have struck the right note with this renovation,
0:55:27 > 0:55:31but are they getting the best bang for their buck on the rental income?
0:55:33 > 0:55:36I'd expect this property to achieve £400 per month.
0:55:36 > 0:55:42Looking at the rental market, it will return about £395 per calendar month.
0:55:42 > 0:55:49We get £95 a week which works out at £411.67 per calendar month, so we're getting slightly more.
0:55:50 > 0:55:54That gives them a healthy 7% annual rental yield,
0:55:54 > 0:56:00but with their total outlay of £70,500, would a resale value tempt them to sell?
0:56:02 > 0:56:04I would put it on the market for £80,000.
0:56:04 > 0:56:09Should this property be sold, it's likely to sell at round about £75,000.
0:56:09 > 0:56:11- OK.- It's not far from where we said.
0:56:11 > 0:56:16We said 75 because the market's dipped slightly since we bought it.
0:56:16 > 0:56:22Obviously, there's no signs of recovery yet, so yeah, we're quite happy with that.
0:56:22 > 0:56:28So Karen and Steve are playing the waiting game and plan to cash in on this asset when profits look better.
0:56:28 > 0:56:32At the moment, that's pretty uncertain, but until then,
0:56:32 > 0:56:37the team are enjoying the benefits of running their own little property empire.
0:56:37 > 0:56:41It's good to be our own boss. We can work when we want and if we want,
0:56:41 > 0:56:45although we tend to work more than we would for somebody else.
0:56:45 > 0:56:47But it's good. It's good fun.
0:56:47 > 0:56:53It also gives us the chance to do other things that we like to do away from work.
0:56:55 > 0:57:00Join us next time as we meet more brave buyers from the auction rooms.
0:57:00 > 0:57:02- We'll see you then. - Goodbye.- Goodbye.
0:57:19 > 0:57:23Subtitles by Subtext for Red Bee Media Ltd 2011
0:57:23 > 0:57:26Email subtitling@bbc.co.uk