0:00:02 > 0:00:04Even in today's challenging market,
0:00:04 > 0:00:07Lucy and I still like dabbling in property.
0:00:07 > 0:00:09We love to get a good deal,
0:00:09 > 0:00:13but in today's market it's not always that easy.
0:00:13 > 0:00:18But one way to stack the odds in your favour is visiting the auction.
0:00:43 > 0:00:47Now, buying under the hammer has become more and more popular.
0:00:47 > 0:00:51Millions of pounds of property are sold every month at auction.
0:00:51 > 0:00:54So here are the three properties
0:00:54 > 0:00:57that sold at auctions on today's show.
0:00:58 > 0:01:00In Devon, there's a bungalow
0:01:00 > 0:01:04that could open a few doors into the property market.
0:01:04 > 0:01:07How fantastic is that?
0:01:08 > 0:01:13A trip to Enfield in Middlesex leads me to an interesting development.
0:01:13 > 0:01:15I hope looks aren't everything.
0:01:15 > 0:01:18It's quite an eyesore!
0:01:18 > 0:01:23And in Greater Manchester, there are some things best left alone.
0:01:23 > 0:01:28When you knock it down, YOU don't. You have to get a specialist in.
0:01:29 > 0:01:31All these properties went to auction.
0:01:31 > 0:01:34We'll find out who bought them and what they paid
0:01:34 > 0:01:37when they went under the hammer.
0:01:40 > 0:01:42This is Plymstock in Devon,
0:01:42 > 0:01:47a pleasant suburb of Plymouth, a couple of miles from the city.
0:01:47 > 0:01:52Once more of a village, it expanded in the 1950s
0:01:52 > 0:01:57and appeals to home owners looking to take a step away from city life.
0:01:57 > 0:02:02It's a funny old mix, this road. 1940s and 1950s houses,
0:02:02 > 0:02:06semi-detached, detached and a bungalow. I'm delighted to say
0:02:06 > 0:02:08that's what I'm here to see.
0:02:08 > 0:02:12This is it. 170,000 quid was the guide price.
0:02:12 > 0:02:17Three bedrooms. Bungalows are wonderful. They have such scope.
0:02:17 > 0:02:21Let's see if this one is ripe for improvement.
0:02:21 > 0:02:22From the outside,
0:02:22 > 0:02:27this double-fronted bungalow appears quite imposing, if a tad tired.
0:02:27 > 0:02:32The windows look like they will need replacing, and I'd check the roof.
0:02:32 > 0:02:34The bungalow sits on a large plot
0:02:34 > 0:02:37even though it's hidden behind this wall,
0:02:37 > 0:02:41so all seems promising so far. Let's check inside.
0:02:41 > 0:02:44Nice little porchway there. I always like those.
0:02:44 > 0:02:48Through into the main corridor. Bedroom on that side.
0:02:48 > 0:02:53It's already feeling quite big. This is the main living room area.
0:02:53 > 0:02:56A huge great bay window.
0:02:56 > 0:02:59Nice floorboards you could strip back. High ceilings.
0:02:59 > 0:03:02It's got a very nice feel to it.
0:03:02 > 0:03:06It's tired and a little bit dated, but the structure's really good.
0:03:06 > 0:03:08And what's this?
0:03:08 > 0:03:10How fantastic is that?
0:03:10 > 0:03:14Sliding doors leading to what I guess was the dining room area.
0:03:14 > 0:03:20Judging by the state of the electrics, it'll need a rewire.
0:03:20 > 0:03:24It's a fairly old radiator, so cost in for some central heating.
0:03:24 > 0:03:28But other than that, it's got a really nice feel.
0:03:28 > 0:03:32'OK, it's a bit dated, but it's bright and spacious
0:03:32 > 0:03:34'and it won't take too much
0:03:34 > 0:03:37'to get it feeling fresh again.
0:03:37 > 0:03:42# Singing a song Old paint is peeling
0:03:42 > 0:03:46# This is that fresh, that fresh feeling... #
0:03:46 > 0:03:51'The bungalow has three bedrooms, with two big ones at the front.
0:03:54 > 0:03:57'Then a smaller one at the back
0:03:57 > 0:04:01'that could feel much bigger if you removed the cupboards.
0:04:01 > 0:04:05'The separate bathroom and loo could be knocked into one,
0:04:05 > 0:04:09'but the real layout challenge is at the back.'
0:04:09 > 0:04:14Through another sliding door, and it starts to go horribly wrong.
0:04:14 > 0:04:17This is the kitchen. It's absolutely tiny.
0:04:17 > 0:04:19Needs complete replacement.
0:04:19 > 0:04:23But before you do that, maybe think of a bigger scheme,
0:04:23 > 0:04:25because the good news is...
0:04:25 > 0:04:28that out here there's a very large space.
0:04:28 > 0:04:33It's like this fairly... I don't know, not exactly the best-made,
0:04:33 > 0:04:37and slightly temporary, kind of lean-to area.
0:04:37 > 0:04:42Extraordinarily hot today, it's the biggest utility I've ever seen.
0:04:42 > 0:04:46So what I would consider doing is making something more substantial,
0:04:46 > 0:04:48maybe putting a proper extension on.
0:04:48 > 0:04:52Then knocking down that wall for a really nice kitchen dining area.
0:04:52 > 0:04:57That makes a lot of sense and would dramatically affect this bungalow.
0:04:57 > 0:05:00'The potential here is to make
0:05:00 > 0:05:03a super kitchen/diner cum garden room.
0:05:03 > 0:05:06'There's loads of land at the back.
0:05:06 > 0:05:10'The garden is big and well-established.
0:05:10 > 0:05:12'I'm feeling rosy about this place.
0:05:12 > 0:05:16I reckon that as a refurbishment it could really bear fruit,
0:05:16 > 0:05:20'but there's one little issue you may need to sort out.'
0:05:23 > 0:05:26Well, parking around here is a bit of a problem,
0:05:26 > 0:05:29so it's great to have a drive and a garage,
0:05:29 > 0:05:33but as you can see you'd have to have a very narrow car
0:05:33 > 0:05:35to get in the gap between the house and the wall,
0:05:35 > 0:05:37so pretty much the garage is useless.
0:05:37 > 0:05:41What I would think about doing is bring the garage forward,
0:05:41 > 0:05:46build it here, you'd still have a drive.
0:05:46 > 0:05:51At the same time, you'd also create some more space for the rear garden.
0:05:51 > 0:05:55However, if you just use your garage to store junk, maybe leave it.
0:05:57 > 0:06:00'You need to think carefully,
0:06:00 > 0:06:03'as replacing the garage won't be cheap.
0:06:05 > 0:06:10'And it might not add significantly to the future value of the property.
0:06:10 > 0:06:14'We invited along a local estate agent to hear her thoughts
0:06:14 > 0:06:17'on this detached Devon bungalow.'
0:06:17 > 0:06:20My first impression is, it's a 1930s property.
0:06:20 > 0:06:25It's spacious. When it's done up to a nice high standard,
0:06:25 > 0:06:27it'll make a lovely family home.
0:06:27 > 0:06:31Or even for a retired couple that like space on the level.
0:06:31 > 0:06:35The property had an auction guide price of £170,000.
0:06:35 > 0:06:38What could it be worth once refurbished?
0:06:38 > 0:06:41I would look in the region
0:06:41 > 0:06:45of £290,000 to £295,000.
0:06:48 > 0:06:53Well, if the bungalow sold near the guide price of £170,000,
0:06:53 > 0:06:57it sounds like there's considerable potential profit,
0:06:57 > 0:07:00even allowing for the refurbishment costs.
0:07:02 > 0:07:05This bungalow has the magic combination of space,
0:07:05 > 0:07:08scope for improvement and super location.
0:07:08 > 0:07:13If you're careful with what you spend, there's money to be made.
0:07:13 > 0:07:15Let's see who went for it.
0:07:15 > 0:07:20Lot 69. A good-sized three-bed, detached, double-fronted bungalow.
0:07:20 > 0:07:23Who kicks off with 170?
0:07:23 > 0:07:27165? 160.
0:07:27 > 0:07:29162. 164.
0:07:29 > 0:07:33164. 166. At 166.
0:07:33 > 0:07:36168. 169.
0:07:36 > 0:07:38170. 171.
0:07:38 > 0:07:40172.
0:07:40 > 0:07:42173. 174.
0:07:42 > 0:07:45175. 176. 177.
0:07:45 > 0:07:47178. 179.
0:07:47 > 0:07:5080. 81.
0:07:50 > 0:07:5482. 83. 84.
0:07:54 > 0:07:5685. 86.
0:07:56 > 0:08:0086. Handbrake for a moment. 186.
0:08:00 > 0:08:03And 7. And 8.
0:08:03 > 0:08:09188 and a half. A new face. 189. 189 and a half.
0:08:09 > 0:08:11190.
0:08:11 > 0:08:14190 and a half. 191.
0:08:14 > 0:08:18191 and a half. 192.
0:08:18 > 0:08:2292 and a half. 93. And a half.
0:08:22 > 0:08:25And 4. And a half.
0:08:25 > 0:08:28And 5. 195.
0:08:28 > 0:08:32At 195 once.
0:08:32 > 0:08:35At 195 twice. At 195.
0:08:35 > 0:08:39Third and last time. Here it is. At 195...and gone.
0:08:39 > 0:08:41Sir, madam, well done.
0:08:41 > 0:08:46That last bid of £195,000 was made by Richard.
0:08:46 > 0:08:49He was at the auction with his wife, Ida,
0:08:49 > 0:08:52and Simon, his daughter's partner.
0:08:52 > 0:08:56Richard's retired. Simon used to work in kitchen and bathroom fitting
0:08:56 > 0:09:00and they're part of a property developing team.
0:09:00 > 0:09:05I met up with them at the bungalow to hear about their plans.
0:09:05 > 0:09:09Richard, Simon, lovely to meet you. Congratulations.
0:09:09 > 0:09:12- I like this bungalow.- So do we!
0:09:12 > 0:09:15Tell me why you wanted to buy it.
0:09:15 > 0:09:19There was something nice about it. It's light, airy, clean.
0:09:19 > 0:09:22It seemed like a good investment.
0:09:22 > 0:09:26- Big.- Mmm, very big. - The numbers stacked up.
0:09:26 > 0:09:32That's primarily what I'm interested in and Simon does the work.
0:09:32 > 0:09:34Let me get the personal relationship.
0:09:34 > 0:09:37- This is your son-in-law.- Yes.- Well, will be.
0:09:37 > 0:09:41- Will be.- Oh, great.- I proposed to his daughter on Monday.
0:09:41 > 0:09:46- You proposed to her on Monday?! - Yep.- Did she say yes?- Of course!
0:09:46 > 0:09:50Well, congratulations! When's the wedding going to be?
0:09:50 > 0:09:53We're expecting a child in September,
0:09:53 > 0:09:55so we'll give it another year.
0:09:55 > 0:09:58'This will be Simon's third child,
0:09:58 > 0:10:01so he's going to be busy at home and with this house.'
0:10:01 > 0:10:04# I am what I am, am what I am
0:10:04 > 0:10:07# A family man... #
0:10:07 > 0:10:11- So what are you going to do to this place?- Well, a new roof,
0:10:11 > 0:10:15rewire, replumb, replaster right the way through.
0:10:15 > 0:10:17We're going to jiggle the rooms,
0:10:17 > 0:10:21utilise more space. We're bringing a fourth bedroom in.
0:10:21 > 0:10:23To the rear of the property,
0:10:23 > 0:10:27the conservatory area, we'll put a proper roof on it
0:10:27 > 0:10:31and make it into a luxury kitchen/diner area,
0:10:31 > 0:10:35hopefully going on to put a reasonable-sized conservatory
0:10:35 > 0:10:37onto the back of the property.
0:10:37 > 0:10:41Basically, it will be totally renovated from top to bottom.
0:10:42 > 0:10:47Richard's wife, Ida, and Simon's fiancee, Laura, will oversee
0:10:47 > 0:10:49the interior decoration.
0:10:49 > 0:10:54They've decided to relocate the garage to the side of the property
0:10:54 > 0:10:56and enlarge it to take two cars.
0:10:56 > 0:10:59Richard reckons that should cost
0:10:59 > 0:11:04about £900 to £1,000, but what's the bigger financial picture?
0:11:04 > 0:11:07Simon hopefully won't spend any more than about 35.
0:11:07 > 0:11:11And then we'll probably spend another 11 grand on legal,
0:11:11 > 0:11:14so that includes estate agents,
0:11:14 > 0:11:17solicitors, stamp duty - that's already been paid,
0:11:17 > 0:11:20which people tend to forget. That's nearly two grand.
0:11:20 > 0:11:24And, hopefully, there will be a profit left over at the end
0:11:24 > 0:11:27to cover Simon's advance drawings,
0:11:27 > 0:11:30my interest, and we'll share what's left.
0:11:30 > 0:11:35Listen, congratulations, and good luck. We'll see how you get on.
0:11:35 > 0:11:40- Thank you very much.- Thank you. - And good luck with the wedding!
0:11:40 > 0:11:43# I am what I am, am what I am
0:11:44 > 0:11:46# A family man... #
0:11:46 > 0:11:48So exciting times ahead -
0:11:48 > 0:11:52a new project, a new baby and a marriage.
0:11:52 > 0:11:56Certainly, the team have got themselves a really nice property,
0:11:56 > 0:12:01but will Simon manage to keep to Richard's very strict budgets?
0:12:01 > 0:12:02Find out later in the show.
0:12:05 > 0:12:08Today I'm in Enfield, Middlesex,
0:12:08 > 0:12:11a place that has quite a claim to fame.
0:12:11 > 0:12:16Not only has it a well-established market trading for 700 years,
0:12:16 > 0:12:20it's also home to the first cash dispenser machine,
0:12:20 > 0:12:22installed here over 40 years ago.
0:12:22 > 0:12:26The inventor had his "Eureka!" moment while having a bath.
0:12:26 > 0:12:29Talking of getting soaked...
0:12:29 > 0:12:32# Who'll stop the rain? #
0:12:33 > 0:12:34Well, today in Enfield
0:12:34 > 0:12:38I haven't chosen the best weather to view auction lots.
0:12:38 > 0:12:41But I'm excited. I'm here to see
0:12:41 > 0:12:44a building plot that had a guide of just £100,000.
0:12:44 > 0:12:47And it's behind here.
0:12:48 > 0:12:50So here's the land.
0:12:50 > 0:12:55It measures over 0.2 of an acre, it's narrow and very long,
0:12:55 > 0:13:00but this industrial unit really sits quite closely,
0:13:00 > 0:13:02and it's quite an eyesore.
0:13:03 > 0:13:08Well, not great. The industrial unit is a bit of an ugly neighbour.
0:13:08 > 0:13:13But the other side of this extensive plot is residential,
0:13:13 > 0:13:15so while you can't have it all,
0:13:15 > 0:13:19for the guide price of 100 grand it represents extremely good value.
0:13:19 > 0:13:23So what can you build on this plot? Well, it comes with planning
0:13:23 > 0:13:27for the erection of a three-storey block of six flats -
0:13:27 > 0:13:29one one-bed and five two-beds.
0:13:29 > 0:13:31Parking has been allotted, too,
0:13:31 > 0:13:35which is great, so all you need to do is work out the build costs
0:13:35 > 0:13:39and the sale price or annual rental yield
0:13:39 > 0:13:42and see if it's a viable project.
0:13:42 > 0:13:47As usual, it all comes down to cost, especially on new-build projects.
0:13:47 > 0:13:51The margins can be healthy if all goes to plan, but as we know,
0:13:51 > 0:13:55any project that promises huge returns comes with added risks.
0:13:55 > 0:13:59So beware, and make sure your sums are right.
0:13:59 > 0:14:03So what's great about new-build properties?
0:14:03 > 0:14:06They have the added benefit of an NHBC warranty -
0:14:06 > 0:14:10the National House Builder Council warranty.
0:14:10 > 0:14:13It means your new home will have been built
0:14:13 > 0:14:15to specified standards of construction.
0:14:15 > 0:14:20A real safety net. You also get a boiler guarantee and double glazing.
0:14:20 > 0:14:25# For my brand-new house and my brand-new bride... #
0:14:25 > 0:14:27So with the outline plans passed
0:14:27 > 0:14:31to build a brand-new, three-storey block of six flats,
0:14:31 > 0:14:36an investor who knows what they're doing could do really well here.
0:14:36 > 0:14:40But with projects like this, the devil is often in the detail.
0:14:40 > 0:14:45It's always good to have a look at a piece of paper with some plans on,
0:14:45 > 0:14:46so you can visualise it.
0:14:46 > 0:14:50I've got some here. You see the proposed front elevation
0:14:50 > 0:14:54so you can actually see you've got five two-bed flats here
0:14:54 > 0:14:57and one one-bed flat.
0:14:57 > 0:15:01You've got the proposed side elevation. This was worrying me.
0:15:01 > 0:15:06Obviously, because of its location, it's right next to a car park!
0:15:06 > 0:15:11But the good news with that is only three windows overlook it,
0:15:11 > 0:15:16so it's probably a bathroom or a bedroom. So not too bad.
0:15:16 > 0:15:21And the side elevation here is going to face all the houses on that side.
0:15:21 > 0:15:25So it's quite good just to visualise what this is going to look like.
0:15:25 > 0:15:28Remember, these are outline plans,
0:15:28 > 0:15:31so you'd have to submit a further application
0:15:31 > 0:15:35to obtain full planning before starting any work here.
0:15:35 > 0:15:37Proportions look good in the two-beds,
0:15:37 > 0:15:40and the one-bed flat is perfectly adequate.
0:15:40 > 0:15:43There's also a good deal of parking
0:15:43 > 0:15:47in the plans, and that's a real marketing tool in a populated area.
0:15:47 > 0:15:52The industrial unit aside, this is an established residential area.
0:15:52 > 0:15:55While I'm sure the local wildlife will miss this,
0:15:55 > 0:15:58the neighbouring properties will be delighted
0:15:58 > 0:16:01to see this bit of scrubland developed.
0:16:02 > 0:16:07So with the plot of land guided at £100,000, it's time to find out
0:16:07 > 0:16:11what a local estate agent makes of the potential here.
0:16:11 > 0:16:14It's a nice little plot with good access.
0:16:14 > 0:16:17It's at the right end of the street here,
0:16:17 > 0:16:19with access to the road.
0:16:19 > 0:16:23The mixture of commercial premises next door is not great,
0:16:23 > 0:16:27but we're right next to the residential stuff, too.
0:16:27 > 0:16:30The site could make a good little investment,
0:16:30 > 0:16:32but how would the figures stack up?
0:16:32 > 0:16:37With five two-beds and one one-bed flat planned,
0:16:37 > 0:16:39how much could they sell for?
0:16:39 > 0:16:44I would imagine the two-beds would be around the £170,000 ballpark.
0:16:44 > 0:16:48The one-bed, about £130,000.
0:16:48 > 0:16:52The figures could add up to a £980,000 return,
0:16:52 > 0:16:57so getting this site and the building costs right is important.
0:16:57 > 0:17:00But how might rental income look?
0:17:00 > 0:17:02There's two markets here.
0:17:02 > 0:17:05The private market won't pay as much
0:17:05 > 0:17:08as the local authority's home finders scheme.
0:17:08 > 0:17:13They're paying as much as £975 per calendar month. Quite a lot.
0:17:13 > 0:17:18Otherwise, they would normally be around £850 per calendar month.
0:17:19 > 0:17:20If you stick to the plans,
0:17:20 > 0:17:25keep build costs low and rent this out, the yield is healthy.
0:17:25 > 0:17:29If you go over-budget and fail to attract tenants offering high rents,
0:17:29 > 0:17:31this project isn't so attractive.
0:17:31 > 0:17:36Someone fancied it, though. Let's find out who as we go to auction.
0:17:39 > 0:17:42Lot 110. Enfield, nice site there. What'll you bid me?
0:17:42 > 0:17:46Somebody bid me 80,000. Thank you. I went too low.
0:17:46 > 0:17:4980,000. 82 and a half? 82 and a half, yep.
0:17:49 > 0:17:5285. 87 and a half.
0:17:52 > 0:17:56And 90. The gentleman... 100 with you. Wearing the hat.
0:17:56 > 0:17:58102 and a half, sir. 105.
0:17:58 > 0:18:02107 and a half. 110. 112 and a half.
0:18:02 > 0:18:05115. And 17 and a half.
0:18:05 > 0:18:07120, sir?
0:18:07 > 0:18:12120, the gentleman on the second row with the pen. 122 and a half.
0:18:12 > 0:18:1625. 27 and a half. 130. Yep.
0:18:16 > 0:18:1732 and a half. 35.
0:18:17 > 0:18:21This Enfield lot generated a lot of interest,
0:18:21 > 0:18:26so that 100 grand guide price was left far behind. We pick it up
0:18:26 > 0:18:28when the bidding had reached
0:18:28 > 0:18:33- an amazing £250,000.- For the first time at 250. Second time.
0:18:33 > 0:18:39Fresh place, 255. Where did you come from? 260, sir. 265.
0:18:39 > 0:18:41270. 275?
0:18:44 > 0:18:48Still with you at 270. 275 anywhere else?
0:18:48 > 0:18:51275. 280, sir?
0:18:51 > 0:18:54280. 285? 285.
0:18:54 > 0:18:56290. 295?
0:18:56 > 0:19:01No? Sure this time? 290, on my right. Sitting down, smiling.
0:19:01 > 0:19:03For the first time at 290.
0:19:03 > 0:19:07Second time at 290. Third and final time at £290,000.
0:19:07 > 0:19:12I think we're done this time. Sold to you, sir, at 290,000.
0:19:12 > 0:19:18The successful bidder on the day who got the lot for £290,000 was David.
0:19:18 > 0:19:20He runs a local skip hire company,
0:19:20 > 0:19:23so plenty of contacts in the building trade
0:19:23 > 0:19:28who he hopes will give him a helping hand on this. I met him
0:19:28 > 0:19:30back at the site to find out more.
0:19:30 > 0:19:35Dave, it's stopped raining! It's great standing on your land.
0:19:35 > 0:19:38Let's talk about why you wanted to buy this.
0:19:38 > 0:19:43Basically, I've got some money tied up, not earning much money.
0:19:43 > 0:19:47The opportunity came, I saw the plot advertised on the internet,
0:19:47 > 0:19:49went to the auction
0:19:49 > 0:19:51and thought it a better investment
0:19:51 > 0:19:56for the money I've got tied up in the bank with low interest rates.
0:19:56 > 0:19:59- It comes with outline planning permission.- Yeah.
0:19:59 > 0:20:02Is that what interested you? It was ready?
0:20:02 > 0:20:05Definitely. I needed something that was ready to go.
0:20:05 > 0:20:09I didn't want anything risky without permission.
0:20:09 > 0:20:13The fact we've got outline planning permission on it makes it easy.
0:20:13 > 0:20:18To build six flats needs an awful lot of money to put up front.
0:20:18 > 0:20:21Have you thought about how much?
0:20:21 > 0:20:23Well, we thought about £300,000.
0:20:23 > 0:20:27The architect said £350,000 to £400,000.
0:20:27 > 0:20:30We had the flats valued before we went to auction
0:20:30 > 0:20:33and the total project is about £1 million,
0:20:33 > 0:20:38or just under. That's what we valued it at. So there is a profit in it.
0:20:38 > 0:20:40What do you hope to walk away with?
0:20:40 > 0:20:43Hopefully, we should make £250,000 to £300,000.
0:20:43 > 0:20:46If it all goes according to plan,
0:20:46 > 0:20:50Dave could be looking at a sizeable profit on this investment.
0:20:50 > 0:20:56Ugly as the site is, it could be the basis for an attractive return.
0:20:58 > 0:21:03# Beautiful wasteland... #
0:21:05 > 0:21:07So do you have much experience
0:21:07 > 0:21:11of building six flats? Quite a tall order, isn't it?
0:21:11 > 0:21:15No, I haven't any experience of building six flats,
0:21:15 > 0:21:17but I know lots of builders.
0:21:17 > 0:21:22Owning a local skip hire company, we've 150 builders on our books.
0:21:22 > 0:21:27So it shouldn't be a problem finding a builder to do it.
0:21:27 > 0:21:30Have you ever done anything like this in the past?
0:21:30 > 0:21:33Well, I've done flat conversion work before.
0:21:33 > 0:21:35Some good, some bad.
0:21:35 > 0:21:37The first project I did,
0:21:37 > 0:21:41we were on a rising market and couldn't go wrong.
0:21:41 > 0:21:45Everything made more profit than we thought we would.
0:21:45 > 0:21:49Then the second project we did was on a falling market.
0:21:49 > 0:21:54And that was one that I got my fingers burnt a little bit on.
0:21:54 > 0:21:56So, we win some and lose some.
0:21:56 > 0:21:58Time, as they say, is money,
0:21:58 > 0:22:02and Dave's itching to get this investment paying its way.
0:22:02 > 0:22:06With that budget of 300 grand, he won't let the grass grow
0:22:06 > 0:22:10and is keen to get started as soon as possible.
0:22:10 > 0:22:13When will the project be completed?
0:22:13 > 0:22:17I think probably it's going to be a year to do the whole thing,
0:22:17 > 0:22:21from getting the detailed plans passed from the council
0:22:21 > 0:22:23to getting it finished.
0:22:23 > 0:22:25- Probably about a year.- Day to day,
0:22:25 > 0:22:30how will you work it into your life? I'm sure you're really busy.
0:22:30 > 0:22:35I am busy. We're just going to... I'll have a builder to site manage it
0:22:35 > 0:22:39and I'll hopefully only come down from time to time.
0:22:39 > 0:22:43When will you kick back and enjoy the fruits of your lovely hard work?
0:22:43 > 0:22:48I don't really know. I've got enough time to do the things I like doing -
0:22:48 > 0:22:50playing golf, a bit of sailing.
0:22:50 > 0:22:52Things that I do as hobbies.
0:22:52 > 0:22:56I've still got plenty of time. I don't want to retire yet.
0:22:56 > 0:23:01- Dave, it's been so lovely talking to you. Good luck.- Thank you.
0:23:01 > 0:23:05How many people can say they know 150 builders? Well, Dave can!
0:23:05 > 0:23:10His background and his connections should make this a breeze,
0:23:10 > 0:23:14but we all know that new-builds throw up their own problems.
0:23:14 > 0:23:16Find out how he gets on later.
0:23:18 > 0:23:20Coming up, in Greater Manchester,
0:23:20 > 0:23:24you'd need to study this house very carefully before buying.
0:23:24 > 0:23:27It depends what you'll use it for.
0:23:28 > 0:23:32In Enfield, it's back to the drawing board for Dave.
0:23:32 > 0:23:37If anything came up, a similar project, I'd probably be interested.
0:23:39 > 0:23:40But first, we see
0:23:40 > 0:23:45how Richard and Simon's bungalow project in Devon went.
0:23:45 > 0:23:47The outcome is absolutely brilliant.
0:23:50 > 0:23:52Now back to Plymstock in Devon,
0:23:52 > 0:24:00where earlier this three-bedroom detached bungalow was bought for £195,000 by Richard, on the left,
0:24:00 > 0:24:06and his daughter's partner, Simon. Richard was looking after the finances,
0:24:06 > 0:24:11and Simon, a kitchen and bathroom fitter, was doing most of the work.
0:24:11 > 0:24:14He was engaged in more ways than one.
0:24:14 > 0:24:17- This is your son-in-law?- Yes.
0:24:17 > 0:24:24- Married to your daughter. - Will be.- Will be.- Oh, great. - I proposed to her on Monday.
0:24:24 > 0:24:29- You proposed to her on Monday?! - Yeah.- Did she say yes?- Of course!
0:24:30 > 0:24:37Well, it's now a year later, and we met up again with Richard and Simon back at the property.
0:24:37 > 0:24:39There's been quite a transformation.
0:24:42 > 0:24:47The drab, grey bungalow has been re-rendered in a brilliant white and cream.
0:24:49 > 0:24:54And a new garage has been built in line with the front of the house.
0:24:54 > 0:24:59At the back, there were so many trees you'd struggle to see the end of the garden.
0:24:59 > 0:25:01Well, not any more.
0:25:01 > 0:25:06The dilapidated old conservatory has been completely rebuilt.
0:25:06 > 0:25:13It's now a wonderful L-shaped kitchen/diner, equipped to a very high specification.
0:25:16 > 0:25:21And the layout's been totally changed, as Simon explains.
0:25:22 > 0:25:26The best thing was moving the entrance, which was here.
0:25:26 > 0:25:32We've gained more space by opening it right up and continuing round in an L-shape.
0:25:32 > 0:25:38It gives the illusion of space and, again, contacting the old dining area.
0:25:38 > 0:25:42The outcome of it is brilliant. The room's great.
0:25:42 > 0:25:46It's family, young, old. Suits everyone.
0:25:47 > 0:25:53And no expense has been spared on the quality of fittings in the refitted bathroom.
0:25:57 > 0:26:04Simon's years of experience of bathroom and kitchen fitting are clear to see.
0:26:04 > 0:26:10At the front of the bungalow, the large bay-fronted living room has been decorated
0:26:10 > 0:26:13and a feature fireplace installed.
0:26:13 > 0:26:18And the former dining room reached through the glass doors is now a bedroom,
0:26:18 > 0:26:20taking the total to four.
0:26:20 > 0:26:25The large bedroom at the front now has an added feature as well.
0:26:27 > 0:26:29This is the master bedroom.
0:26:29 > 0:26:35We've managed to add an en suite by taking space from the rear bedroom.
0:26:35 > 0:26:42And we've obviously taken some space from this one, which we hope will add some value to the property.
0:26:42 > 0:26:47The bungalow had to be completely rewired and the plumbing upgraded.
0:26:47 > 0:26:52It took about nine months to get it to this stunning condition.
0:26:52 > 0:26:58Whilst Richard's been watching the purse strings, Simon's done the majority of the work.
0:26:58 > 0:27:04He became a dad for the third time to baby Lauren soon after they started here.
0:27:04 > 0:27:11Along with his other two children, Jacob and Coby, how did Simon cope with the new baby?
0:27:11 > 0:27:19Baby Lauren's been very good. A few late nights, but I get the smiles and I'm quite happy.
0:27:19 > 0:27:25So the new arrival didn't stop Simon cracking on with the work, but it was slowed down by the harsh winter.
0:27:25 > 0:27:29To stay on track they decided to get extra help.
0:27:29 > 0:27:35We brought somebody in to help Simon. We actually budgeted for part of that,
0:27:35 > 0:27:38but we realised with the timeframe we wanted
0:27:38 > 0:27:44it was better to bring somebody in and do the plastering and do all the painting.
0:27:44 > 0:27:48An added expense, but they both thought it was worthwhile.
0:27:48 > 0:27:54Outside, there were major problems with the drains. How did they come to light?
0:27:54 > 0:27:59Drain issues. Hmm. Not very good. Basically, we found that the drains were backing up.
0:27:59 > 0:28:04We found trees growing into part of the drains, parts had collapsed.
0:28:04 > 0:28:08Eventually, we got over it, but it's time, hassle, money.
0:28:08 > 0:28:13So some money went down the drain, but did it wash away their budget?
0:28:13 > 0:28:19My original budget was... or Simon and my original budget was actually £35,000.
0:28:19 > 0:28:25We eventually ended up spending £47,000, so we were actually £12,000 over budget.
0:28:25 > 0:28:31But primarily the main cost was an extra £3,000 on the roof
0:28:31 > 0:28:33and we spent £7,000 on labour.
0:28:33 > 0:28:37Time to see what two local estate agents think
0:28:37 > 0:28:41of this bungalow that Richard and Simon have transformed.
0:28:42 > 0:28:48When I walked through the door for the second time, I was flabbergasted.
0:28:48 > 0:28:50It just looks so much bigger -
0:28:50 > 0:28:54the extension to the dining room, or on to the garden with the decking.
0:28:54 > 0:29:00What stands out for me, apart from the incredible finish and fittings,
0:29:00 > 0:29:04is the sizeable kitchen and breakfast room, a great family area.
0:29:04 > 0:29:08The garden was so overgrown. You've now got a child-friendly property.
0:29:08 > 0:29:13You've got a level property for older clients. It's fantastic.
0:29:13 > 0:29:17Simon and Richard have no intention of renting it out,
0:29:17 > 0:29:19so what could it be worth if sold?
0:29:19 > 0:29:25They paid £195,000 at the auction and their budget expanded to 47,000,
0:29:25 > 0:29:28taking their total to 242 grand.
0:29:29 > 0:29:32I feel we could put this on the market
0:29:32 > 0:29:35for in the region of £300,000 to £320,000.
0:29:35 > 0:29:39You could market this property in the region of £300,000 to £315,000.
0:29:39 > 0:29:43That valuation range could generate a gross profit
0:29:43 > 0:29:45before the usual selling expenses
0:29:45 > 0:29:48of £58,000 to £78,000,
0:29:48 > 0:29:50so what do they think of that?
0:29:52 > 0:29:54I think 320 sounds very good.
0:29:54 > 0:29:58We always want a bit more, don't we?
0:29:58 > 0:30:01This looks like a dream team,
0:30:01 > 0:30:03with Richard's financial expertise
0:30:03 > 0:30:07and Simon's unmistakable skills on show throughout the property.
0:30:09 > 0:30:12It's a credit to Simon. I haven't been doing the work.
0:30:12 > 0:30:15Simon's been doing it and it's an incredible job.
0:30:15 > 0:30:18The finish and the workmanship is good.
0:30:18 > 0:30:21It could have been a little bit quicker,
0:30:21 > 0:30:24but that's not the way these projects happen.
0:30:24 > 0:30:27We'd like it to be done quicker and make more money,
0:30:27 > 0:30:29but it's a good project.
0:30:32 > 0:30:36I'm about three miles outside Manchester city centre
0:30:36 > 0:30:38in an area known as Fallowfield.
0:30:38 > 0:30:41During the Industrial Revolution,
0:30:41 > 0:30:45this was the place that the well-to-do came to escape the smog
0:30:45 > 0:30:49and general noise of the industrial heart of the city centre.
0:30:49 > 0:30:53Nowadays, it's still a very popular place to live.
0:30:53 > 0:30:55As a result, some great architecture
0:30:55 > 0:30:58and grand residential housing was built here.
0:30:58 > 0:31:02The other main attraction a short walk away is Manchester University
0:31:02 > 0:31:06and you'll know just what that can mean.
0:31:06 > 0:31:09You don't need to be a degree student to work out
0:31:09 > 0:31:11that with the thousands of students
0:31:11 > 0:31:15starting at Manchester colleges and universities every year,
0:31:15 > 0:31:19there is going to be a huge demand for accommodation,
0:31:19 > 0:31:22and the property I'm here to see could be perfect.
0:31:22 > 0:31:26It's a three-bed semi-detached with a guide price of 140,000 quid.
0:31:26 > 0:31:29Let's take a look inside.
0:31:29 > 0:31:32A large number of properties round here are buy-to-let
0:31:32 > 0:31:34for the student rental market
0:31:34 > 0:31:37and the current student population is growing.
0:31:37 > 0:31:41Is this the sort of place modern scholars are after?
0:31:41 > 0:31:45Through the front door and what have we got? A decent-sized entrance.
0:31:45 > 0:31:48Stairs up to your bedrooms there.
0:31:48 > 0:31:50On the right-hand side, living room,
0:31:50 > 0:31:54but if you rent this place out, that could be another bedroom
0:31:54 > 0:31:58and if you're about maximising your profit and your income,
0:31:58 > 0:32:00the more bedrooms, the better.
0:32:00 > 0:32:04You could convert the rear sitting room into a bedroom too,
0:32:04 > 0:32:07because the kitchen isn't a bad size.
0:32:07 > 0:32:10It's got this bit which was the original part of the house,
0:32:10 > 0:32:15then on the back there's a flat-roof extension, which isn't ideal,
0:32:15 > 0:32:19but it means that the kitchen itself could be a kitchen/dining area.
0:32:19 > 0:32:23It depends on what you're going to use the house for,
0:32:23 > 0:32:25but in terms of a start, not at all bad.
0:32:25 > 0:32:28The layout here really doesn't work,
0:32:28 > 0:32:30but you've got the space to change it.
0:32:30 > 0:32:34I'd be tempted to put the units at the far end to overlook the garden,
0:32:34 > 0:32:38leaving this part as a dining area or breakfast bar,
0:32:38 > 0:32:41but so far, there are no major complaints, really.
0:32:41 > 0:32:44One thing I really like about this property
0:32:44 > 0:32:47is that you do get a sense of space -
0:32:47 > 0:32:50lots of light coming in to the stairway area here
0:32:50 > 0:32:52and there's this landing area.
0:32:52 > 0:32:54It's probably not the best use of space,
0:32:54 > 0:32:57but it gives the house a nice feel.
0:32:57 > 0:33:00Up here, a bathroom. It's not huge, but it's OK.
0:33:00 > 0:33:05Small bedroom at the back there, medium-sized bedroom next to it,
0:33:05 > 0:33:07then your third bedroom which,
0:33:07 > 0:33:11thankfully, is a good size at the front of the property here.
0:33:11 > 0:33:16Now, obviously, everything needs to be re-decorated for sure
0:33:16 > 0:33:20and one thing you are going to do is take off these polystyrene tiles
0:33:20 > 0:33:23because they are a fire hazard.
0:33:23 > 0:33:28But in terms of space, it's a good-sized room and lettability,
0:33:28 > 0:33:30well, definitely a big plus.
0:33:30 > 0:33:34It's not just in here those tiles will need to come down.
0:33:34 > 0:33:38Every room has them. Let's just hope the plaster above stays intact.
0:33:38 > 0:33:41# I'm gonna stick like glue
0:33:41 > 0:33:46# Stick because I'm stuck on you...
0:33:46 > 0:33:50But overall, refurbish the rooms, modernise the bathroom
0:33:50 > 0:33:53and this property might be ready to go.
0:33:53 > 0:33:57At the rear of the property, you've got a really good-sized garden.
0:33:57 > 0:33:59If you rented this out to students,
0:33:59 > 0:34:03this is a bad thing to have because they won't cut the grass!
0:34:03 > 0:34:07However, as a family home, a really good thing to have.
0:34:07 > 0:34:09It depends what you use the house for.
0:34:09 > 0:34:13One thing I've spotted at the back is this old garage.
0:34:13 > 0:34:18It looks fairly innocuous, although a bit dodgy round the edges.
0:34:18 > 0:34:23The bad news, though, it's asbestos, which means when you knock it down,
0:34:23 > 0:34:26you have to get a specialist in to do it.
0:34:29 > 0:34:32Not only do you have to get it removed carefully
0:34:32 > 0:34:34by a licensed contractor,
0:34:34 > 0:34:39disposal of the waste can only be done at a licensed disposal site.
0:34:39 > 0:34:40It can all start to add up,
0:34:40 > 0:34:44so it's important to include that in your budget.
0:34:44 > 0:34:49So remembering that the house was guided at £140,000,
0:34:49 > 0:34:54it's time for a local estate agent to tell us what he thinks of it.
0:34:57 > 0:35:01First impressions are that it's dated, it needs an overhaul,
0:35:01 > 0:35:04but it's a good size, good-sized rooms,
0:35:04 > 0:35:08nice extension on the back of the kitchen, nice plot.
0:35:08 > 0:35:11With a bit of investment, it'll be a really good property.
0:35:11 > 0:35:15But how would investment figures look?
0:35:15 > 0:35:19Guided at 140 grand, would there be a good return on a re-sale?
0:35:19 > 0:35:22Once the property has been fully refurbished,
0:35:22 > 0:35:25I would expect it to sell for circa £190,000.
0:35:25 > 0:35:26How would the rentals look
0:35:26 > 0:35:31both for the family market and the growing student population?
0:35:31 > 0:35:34If we were to rent this property to a family today,
0:35:34 > 0:35:37I'd expect to get £750 to £800 per calendar month.
0:35:37 > 0:35:39If it was offered for the student market,
0:35:39 > 0:35:41I'd expect the property
0:35:41 > 0:35:44to achieve somewhere in the region of £1,000 per month,
0:35:44 > 0:35:48based on four people sharing at £250 a month each.
0:35:50 > 0:35:53Well, as a family home or a student let,
0:35:53 > 0:35:57I don't think you can go far wrong with this place.
0:35:57 > 0:36:00And at that guide price of 140,000 quid,
0:36:00 > 0:36:03I'm sure it generated a lot of interest
0:36:03 > 0:36:05when it went under the hammer.
0:36:07 > 0:36:11Lot 9, three-bedroomed, semi-detached house. Where shall we start?
0:36:11 > 0:36:17120? Let's be reasonable. 120? 120 I am bid. At 120 in the room.
0:36:17 > 0:36:22120 I have, then. At 125? At 125 bid. At 125,000. New bidder at 125.
0:36:22 > 0:36:24Do I see 130? 130 bid. 135?
0:36:24 > 0:36:27It's against 135. At 135.
0:36:27 > 0:36:29Do I see 140?
0:36:29 > 0:36:33140. 140 I have now. Do I see 145 in the room?
0:36:33 > 0:36:36145 bid, new bid. 145. Do I see 150?
0:36:36 > 0:36:40Sorry? 150. 150 I have, new bid.
0:36:40 > 0:36:45At 155 now it's against. At 152 and a half. 152 and a half. 155.
0:36:45 > 0:36:50At £155,000. Do I see 156? At 156, quick.
0:36:50 > 0:36:54157. At 157. 158.
0:36:54 > 0:36:58At 158,000 on the phone. 159. At 159. 160?
0:36:58 > 0:37:01160. 161? Could be the last bid.
0:37:01 > 0:37:06At 161, it's against on the phone. Paddle 324 at 161.
0:37:06 > 0:37:08At 161 for the first time...
0:37:08 > 0:37:13At 161 for the second time... Are we all done at 161,000?
0:37:13 > 0:37:16That's yours - paddle number 324.
0:37:18 > 0:37:21'That successful bid of 161,000
0:37:21 > 0:37:24'was made by Richard and his wife Margit.
0:37:24 > 0:37:27'Richard is a retired chartered surveyor
0:37:27 > 0:37:31'and this will be the couple's first residential development.
0:37:31 > 0:37:34'I met them to find out more.'
0:37:34 > 0:37:38- Margit, Richard, lovely to meet you both.- Hello.- Congratulations.
0:37:38 > 0:37:42- Tell me why you wanted to buy this place.- It's the area, really.
0:37:42 > 0:37:47We're wanting to have a house for student lets.
0:37:47 > 0:37:50- Ah.- And it's a very, very good student area.
0:37:50 > 0:37:55And the size of house - it's not too big, but not too tiny either.
0:37:55 > 0:37:58With a good bit of work on it, it'll be perfect.
0:37:58 > 0:38:02So is student lets something you've done before?
0:38:02 > 0:38:04No. No, we haven't.
0:38:04 > 0:38:06Nothing done in residential at all.
0:38:06 > 0:38:10Richard has had a commercial property for quite a while
0:38:10 > 0:38:11which has been let out,
0:38:11 > 0:38:13but this is something very new.
0:38:13 > 0:38:17We were just looking for a different way of expanding.
0:38:17 > 0:38:20Having a commercial property in this recession,
0:38:20 > 0:38:23quite a few of them are empty for a while,
0:38:23 > 0:38:27so we thought, to add to our portfolio, it should be residential.
0:38:27 > 0:38:28We come from this area,
0:38:28 > 0:38:32so we know there's lots of students in Manchester,
0:38:32 > 0:38:33so it was the way to go.
0:38:33 > 0:38:36- Do you live quite close? - No, we live in Holyhead.
0:38:36 > 0:38:39- Holyhead, Anglesey?- Yes.- Right.
0:38:39 > 0:38:41How is that going to work
0:38:41 > 0:38:44in terms of managing the property and also doing it up?
0:38:44 > 0:38:47Well, our son is just leaving the navy
0:38:47 > 0:38:50and going back into residential lettings
0:38:50 > 0:38:54with his old company and he'll be doing student lettings,
0:38:54 > 0:38:58so he'll be managing it, and we've got a good builder lined up.
0:38:58 > 0:39:02We'll come backwards and forwards to monitor things,
0:39:02 > 0:39:03but we can leave him to it
0:39:03 > 0:39:06and everything will be done and dusted.
0:39:06 > 0:39:09'Not only an investment for Richard and Margit,
0:39:09 > 0:39:12'but a chance for their son to get in on the act.
0:39:12 > 0:39:14'With the three bedrooms upstairs,
0:39:14 > 0:39:19'they plan to use one of the ground floor reception rooms as a double,
0:39:19 > 0:39:22'so the house will be a four-bed rental,
0:39:22 > 0:39:26'hopefully generating £80 per week per room, bills not included.
0:39:26 > 0:39:31'But what sort of accommodation can the students expect in return?'
0:39:31 > 0:39:33Well, the obvious, as you can see,
0:39:33 > 0:39:37new bathroom, new kitchen, completely new decorating.
0:39:37 > 0:39:40All the walls and ceilings will be stripped,
0:39:40 > 0:39:43so there'll be quite a bit of re-plastering.
0:39:43 > 0:39:46At that point, we will re-wire the property
0:39:46 > 0:39:50and new flooring, new decorating, basically, everything new.
0:39:50 > 0:39:52What budget have you got for the work?
0:39:52 > 0:39:55Realistically, we're looking at about 25,000.
0:39:55 > 0:39:59- Oh, wow!- For all of the work. - That's pretty healthy.
0:39:59 > 0:40:04Well, it is because, you know, re-wiring, kitchen and bathroom,
0:40:04 > 0:40:09but the polystyrene tiles, they're on every ceiling.
0:40:09 > 0:40:12That's going to damage the plasterwork, obviously,
0:40:12 > 0:40:16with the re-wiring chasing out through the plaster,
0:40:16 > 0:40:19so we've built in complete replastering.
0:40:19 > 0:40:24'Many people underestimate their budget when renovating a property,
0:40:24 > 0:40:28'so Richard and Margit are adopting a sensible approach.
0:40:28 > 0:40:30'But Richard has also discovered
0:40:30 > 0:40:33'that the removal of the chimney breast
0:40:33 > 0:40:36'in the front room and main bedroom
0:40:36 > 0:40:38'has left the chimney stack unsupported,
0:40:38 > 0:40:40'so that will need to be made safe
0:40:40 > 0:40:43'and making this investment safe is important
0:40:43 > 0:40:47'because it's not Richard and Margit's money at stake here.'
0:40:48 > 0:40:50It's my mum and dad.
0:40:50 > 0:40:53They sold a house and moved to a smaller property.
0:40:53 > 0:40:58And so we're investing the money for them to get the income.
0:40:58 > 0:41:00We're managing it for them
0:41:00 > 0:41:04and then taking a small share for our management expertise.
0:41:04 > 0:41:08- Oh, wow!- And my dad and I have been in business as partners
0:41:08 > 0:41:12for years before he retired in 1990.
0:41:12 > 0:41:16- Doing what?- We're chartered surveyors and auctioneers.
0:41:16 > 0:41:21- You definitely know what you're doing, then.- We hope so.- We hope so.
0:41:21 > 0:41:25And I detect an accent that isn't Manchester from you.
0:41:25 > 0:41:29Well, I have been told that I've got an Austrian accent
0:41:29 > 0:41:31with a Mancunian slant to it.
0:41:31 > 0:41:35I lived in Manchester for many years but originally, I come from Austria.
0:41:35 > 0:41:39- Whereabouts?- A place called Linz, an hour and a half from Salzburg,
0:41:39 > 0:41:41between Salzburg and Vienna.
0:41:41 > 0:41:45- What brought you to the UK?- I came a long time ago to study English
0:41:45 > 0:41:47and I came as an au pair girl.
0:41:47 > 0:41:50- Oh, wow! - In 1977 I think it was, yeah.
0:41:50 > 0:41:53- And how long have you two been together?- Not that long.
0:41:53 > 0:41:55It's longer than we think!
0:41:55 > 0:41:57We've been together for 12 years?
0:41:57 > 0:42:02- 1998.- You shouldn't ask questions like that, because I'll forget.
0:42:02 > 0:42:06- 1998, it was.- I'll get rapped over the knuckles.- 12 years, yeah.
0:42:06 > 0:42:08- Congratulations.- Thank you.
0:42:08 > 0:42:12- Thank you.- We'll look forward to seeing how you get on.
0:42:12 > 0:42:14We'll look forward to showing you.
0:42:14 > 0:42:16It seems that Richard and Margit
0:42:16 > 0:42:19have certainly got things fairly well sussed
0:42:19 > 0:42:23and it's good to hear that they've allowed a realistic budget.
0:42:23 > 0:42:27However, they are managing the project from quite a way away
0:42:27 > 0:42:31and the clock is ticking when it comes to getting those students in
0:42:31 > 0:42:33before the start of the next term.
0:42:33 > 0:42:38So how are they going to get on? You can find out later in the show.
0:42:40 > 0:42:44It's been a while since we visited those properties.
0:42:44 > 0:42:47There should have been work done, but you can't bank on it.
0:42:47 > 0:42:49All sorts of problems can arise,
0:42:49 > 0:42:53so what have our buyers had to deal with? Let's find out.
0:42:55 > 0:42:57We return to Enfield in Middlesex
0:42:57 > 0:43:01to catch up on what appeared to be little more than some wasteland
0:43:01 > 0:43:05between residential housing and an industrial estate,
0:43:05 > 0:43:07but it was so much more than that,
0:43:07 > 0:43:11as it had the all-important asset of outline planning permission
0:43:11 > 0:43:14to build six flats in a three-storey block,
0:43:14 > 0:43:16so for skip hire company owner Dave,
0:43:16 > 0:43:19it seemed too good an opportunity to miss.
0:43:19 > 0:43:21He paid 290,000 for it
0:43:21 > 0:43:25and it was time for Dave to call in a few favours.
0:43:27 > 0:43:31Do you have much experience of building six flats?
0:43:31 > 0:43:32It's quite a tall order.
0:43:32 > 0:43:36No, I haven't any experience of building six flats at the moment,
0:43:36 > 0:43:38but I know lots of builders.
0:43:38 > 0:43:41Owning a local skip hire company,
0:43:41 > 0:43:44we've got about 150 builders on our books,
0:43:44 > 0:43:47so I should find a builder to do it.
0:43:47 > 0:43:52So, armed with a £400,000 budget and his pool of builders to call on,
0:43:52 > 0:43:56Dave set about the task of turning the wasteland
0:43:56 > 0:44:00into what he hoped would be a site worth over £1 million.
0:44:00 > 0:44:04So have things worked out as he hoped? 17 months on, we're back.
0:44:06 > 0:44:09Wow! It certainly seems promising.
0:44:12 > 0:44:16The building's up and it looks almost finished.
0:44:16 > 0:44:20There's clearly some landscaping to do, but all in all,
0:44:20 > 0:44:22from the outside, it's almost job done.
0:44:22 > 0:44:28And inside, well, judging by the stairs, it still has a bit to go,
0:44:28 > 0:44:30but what have we got here?
0:44:30 > 0:44:33Well, we've built six flats.
0:44:33 > 0:44:36Five of them are two-bed and one one-bed.
0:44:36 > 0:44:40On the ground floor at the front, there's the one-bed flat.
0:44:40 > 0:44:44It looks nice and spacious, if a little lacking in fixtures
0:44:44 > 0:44:46in what will be the kitchen/dining area.
0:44:46 > 0:44:50At the back on the ground floor is a two-bed flat,
0:44:50 > 0:44:53still with a bit of finishing off to do,
0:44:53 > 0:44:55but the kitchen has been installed.
0:44:55 > 0:44:59There are a further two two-bed flats on the middle second floor,
0:44:59 > 0:45:04also still a few weeks away from being ready for the re-sale market.
0:45:04 > 0:45:08So it looks like it is all going to plan.
0:45:11 > 0:45:12We basically built them
0:45:12 > 0:45:16to the plans that we had when we purchased the land,
0:45:16 > 0:45:21so we've just basically got the detailed planning and built those.
0:45:21 > 0:45:24So the final two two-bed flats
0:45:24 > 0:45:28are on the top floor and they're just about finished.
0:45:32 > 0:45:37This is the top floor flat. It's a two-bedroom flat.
0:45:37 > 0:45:39We've built a lovely feature window there,
0:45:39 > 0:45:43a very large dining room area to this side.
0:45:43 > 0:45:45We've got a modern kitchen here.
0:45:45 > 0:45:49It's got a built-in fridge, a built-in freezer,
0:45:49 > 0:45:52a built-in washing machine
0:45:52 > 0:45:55and a light, modern kitchen.
0:45:56 > 0:46:00Dave had hoped that it would be done in a year, but it took a lot longer
0:46:00 > 0:46:02to get the utilities in.
0:46:02 > 0:46:06That slowed the project down, though it's all gone pretty well.
0:46:06 > 0:46:11With Dave having his own skip hire business to run, how did he cope
0:46:11 > 0:46:13with overseeing a large project?
0:46:13 > 0:46:16I wasn't going to handle the project myself,
0:46:16 > 0:46:17so I decided to look around
0:46:17 > 0:46:21for a good builder I could sub-contract it out to.
0:46:21 > 0:46:24I found one and he's handled the whole thing,
0:46:24 > 0:46:27including employing all the sub-contractors,
0:46:27 > 0:46:30handling the planning permission and everything,
0:46:30 > 0:46:32so I haven't been hands-on.
0:46:32 > 0:46:34I've only really come along to see
0:46:34 > 0:46:38how it's been going and supplied the money to do the build.
0:46:38 > 0:46:41That amount of money was originally set at £400,000,
0:46:41 > 0:46:43so has he stuck to that
0:46:43 > 0:46:46or did he need to dig deeper to fund it all?
0:46:46 > 0:46:51We're a little bit over budget. I think we're probably at about 420.
0:46:51 > 0:46:57A £420,000 spend on top of his £290,000 purchase price,
0:46:57 > 0:47:01plus costs and fees, take his total investment to around 720,000.
0:47:01 > 0:47:06He was hoping the six flats would be worth around £1 million.
0:47:06 > 0:47:08So has he got his sums right?
0:47:08 > 0:47:13What do two local estate agents think of his six Enfield flats?
0:47:13 > 0:47:17The properties are big, they're bright and very well laid out,
0:47:17 > 0:47:19so yes, it's good all round.
0:47:19 > 0:47:21It's quite a high spec quality.
0:47:21 > 0:47:26The thing I get first is the space. Very, very spacious units.
0:47:26 > 0:47:29There's off-street parking and nice communal gardens too.
0:47:29 > 0:47:33No-one will struggle for parking here and there's plenty of places
0:47:33 > 0:47:35to park on the road too.
0:47:35 > 0:47:37Generally positive feedback
0:47:37 > 0:47:41from the estate agents, but with Dave's spend of around 720,000,
0:47:41 > 0:47:46will the re-sale value of the flats mean it was a good investment?
0:47:46 > 0:47:48I think the re-sale values
0:47:48 > 0:47:51are going to be in the region of £180,000 to £185,000
0:47:51 > 0:47:52for the two-beds.
0:47:52 > 0:47:57The one-bedroom flat will be a bit cheaper. That will be around 140,
0:47:57 > 0:48:00maybe a bit more, maybe £145,000.
0:48:00 > 0:48:04The re-sale values of the two beds will be around £175,000
0:48:04 > 0:48:08and the one-bedroom, £135,000 to £140,000.
0:48:08 > 0:48:13Even at the lower valuation, that's in the £1 million ballpark.
0:48:13 > 0:48:17That would give Dave a pre-tax profit of around 300,000,
0:48:17 > 0:48:19minus the usual selling expenses.
0:48:19 > 0:48:22Is he happy with that?
0:48:22 > 0:48:23Yes, it's not a bad price.
0:48:23 > 0:48:27I thought perhaps we would do a bit better than that.
0:48:27 > 0:48:29I thought perhaps £1.1 million.
0:48:29 > 0:48:32The original price was about a million,
0:48:32 > 0:48:37so considering the standard of the flats we've built here,
0:48:37 > 0:48:40that's about correct to what we're looking for.
0:48:40 > 0:48:44And if that pre-tax profit of around 300,000 isn't enough,
0:48:44 > 0:48:47the flats also have great rental potential.
0:48:49 > 0:48:52In terms of rental values for the properties,
0:48:52 > 0:48:55the two-bedroom flats are likely to achieve
0:48:55 > 0:48:57around £850, maybe £900 per month
0:48:57 > 0:49:01because they're done to a very nice standard.
0:49:01 > 0:49:05The one-bedroom flat will be around £700 to £750 per calendar month.
0:49:05 > 0:49:09The two-bedroom flats, you can expect to get £1,100 per month,
0:49:09 > 0:49:13and the one-bedroom, £800 per month would be realistic.
0:49:13 > 0:49:15The rental values seem pretty good,
0:49:15 > 0:49:19although we're not interested in renting. We are going to sell.
0:49:19 > 0:49:21We've done them to a very high standard
0:49:21 > 0:49:25and we wouldn't chance them getting damaged by renting them out,
0:49:25 > 0:49:27so they're going to be sold off.
0:49:27 > 0:49:33So despite rental returns of between 60,000 and 75,000 a year,
0:49:33 > 0:49:36which could net a yield of about 10%,
0:49:36 > 0:49:37Dave is determined to stick
0:49:37 > 0:49:41to the original plan as he has throughout this development,
0:49:41 > 0:49:45but does he see himself doing any more property investing?
0:49:46 > 0:49:48I'll go back to running my business,
0:49:48 > 0:49:52which is basically a skip hire business, and keep an open mind.
0:49:52 > 0:49:54If anything does come up
0:49:54 > 0:49:58that I could have another go on a similar project, I'd be interested.
0:50:00 > 0:50:05At first, the Fallowfield district of Manchester may appear to be
0:50:05 > 0:50:07just another suburb of a large city,
0:50:07 > 0:50:11but for a property developer, it's anything but.
0:50:11 > 0:50:14Situated close to the University of Manchester,
0:50:14 > 0:50:17it has a large student population requiring accommodation.
0:50:17 > 0:50:22With student lets usually worked out on a room-to-room basis,
0:50:22 > 0:50:26the right property can bring in a pretty decent return,
0:50:26 > 0:50:29so when a three-bed house came up for auction in the area,
0:50:29 > 0:50:35retired chartered surveyor Richard and his Austrian-born wife Margit
0:50:35 > 0:50:37snapped it up for 161,000.
0:50:37 > 0:50:41Although it was bought with student lets in mind,
0:50:41 > 0:50:44it actually wasn't bought by them or for them.
0:50:45 > 0:50:46It's my mum and dad.
0:50:46 > 0:50:50They sold a house and moved to a smaller property.
0:50:50 > 0:50:55So we're investing the money for them to get the income.
0:50:55 > 0:50:56We're managing it for them
0:50:56 > 0:51:00and then taking a small share for our management expertise.
0:51:00 > 0:51:04But their management expertise wasn't going to be on site.
0:51:04 > 0:51:09As the couple are based on Anglesey, they needed to contract the work out
0:51:09 > 0:51:12and hope regular visits would keep things on track,
0:51:12 > 0:51:16so they armed their building team with a £25,000 budget
0:51:16 > 0:51:19and set about turning this rather dated house into modern,
0:51:19 > 0:51:22high quality student accommodation.
0:51:22 > 0:51:24Well, just 12 weeks later, and we're back.
0:51:30 > 0:51:34Outside, the house wasn't in need of much attention.
0:51:34 > 0:51:37It was inside where a change was required.
0:51:42 > 0:51:45And boy, has it got it!
0:51:45 > 0:51:48It's light, airy and welcoming.
0:51:48 > 0:51:53The downstairs front room has been turned into a completed bedroom
0:51:53 > 0:51:57that's furnished, ready for some diligent study.
0:51:57 > 0:52:00The back room is now a modern lounge.
0:52:02 > 0:52:06Perhaps the most impressive change is the old kitchen area...
0:52:08 > 0:52:13..which has been transformed into a fully equipped, modern kitchen,
0:52:13 > 0:52:15catering for most student needs.
0:52:16 > 0:52:21We started with stripping all the old kitchen units out,
0:52:21 > 0:52:26you know, and we also had to re-roof the flat roof.
0:52:26 > 0:52:30Ceiling tiles, all polystyrene ceiling tiles, these came off,
0:52:30 > 0:52:34re-plastered, stripped that off, re-roofed it.
0:52:34 > 0:52:39We put a larder unit in here because there's no storage.
0:52:39 > 0:52:44Over there, underneath the stairs, was the old pantry,
0:52:44 > 0:52:48but there's a downstairs toilet there now underneath the stairs,
0:52:48 > 0:52:51so we thought we'd better have a larder unit.
0:52:51 > 0:52:56So we put that, and finally, to finish off, we put the breakfast bar.
0:52:57 > 0:53:01So with the kitchen finished off to a high standard,
0:53:01 > 0:53:04there was just the matter of the upstairs.
0:53:17 > 0:53:20With all the rooms benefiting from a full makeover,
0:53:20 > 0:53:23these three bedrooms, along with the downstairs bedroom,
0:53:23 > 0:53:25are ready for occupation.
0:53:25 > 0:53:29The bathroom has been refurbished with students very much in mind.
0:53:29 > 0:53:33What we've done in here is exactly the same as the rest of the house.
0:53:33 > 0:53:36We've completely gutted the room out.
0:53:36 > 0:53:39This was the only corner where we could have a shower,
0:53:39 > 0:53:42so we had to move the toilet to the other side.
0:53:42 > 0:53:45But it was quite easy to do, the plumbers tell us.
0:53:45 > 0:53:47We had a new wash basin installed.
0:53:47 > 0:53:52The central heating radiator was here, so we just replaced it
0:53:52 > 0:53:53with a towel rail.
0:53:53 > 0:53:57We put the new flooring in and all the pipes went underneath the floor
0:53:57 > 0:54:00and we're very pleased with the result of it all.
0:54:00 > 0:54:03With the upstairs space complete,
0:54:03 > 0:54:05it was just a case of tackling the garden
0:54:05 > 0:54:09and removing that toxic asbestos garage
0:54:09 > 0:54:11and it was job done.
0:54:11 > 0:54:14But at what cost?
0:54:15 > 0:54:18The original budget was £25,000.
0:54:18 > 0:54:23It's increased only a minimum, £500, you know,
0:54:23 > 0:54:27so we've perhaps gone 500 over the 25,000.
0:54:27 > 0:54:31With a £25,500 spend
0:54:31 > 0:54:35and an initial purchase price of 161,000, plus costs and fees,
0:54:35 > 0:54:39that will take their, or should I say, Richard's parents' total spend
0:54:39 > 0:54:43to just short of the £188,000 mark.
0:54:43 > 0:54:46So have the couple made a good investment on their behalf?
0:54:46 > 0:54:49What do two local estate agents think?
0:54:49 > 0:54:53It's a very nice house. I've been in a lot of these properties.
0:54:53 > 0:54:58And this one is in particularly good condition throughout.
0:54:58 > 0:55:01They've done a fantastic job on the property.
0:55:01 > 0:55:05It's one of the best refurbs I've seen in the area.
0:55:05 > 0:55:09This project has always been about rental and room-by-room rental
0:55:09 > 0:55:10for the student market.
0:55:10 > 0:55:15But would their investment of around 188,000 realise any profit
0:55:15 > 0:55:16if it was sold?
0:55:16 > 0:55:18If I was to put this on the market,
0:55:18 > 0:55:21I'd suggest a price in the region of £190,000.
0:55:21 > 0:55:25I'd anticipate somewhere in the region of £200,000 to £210,000.
0:55:25 > 0:55:29So, not much profit, if any, to be seen on the re-sale market,
0:55:29 > 0:55:33but rental really is the name of the game here.
0:55:33 > 0:55:35If I was to put it onto the market,
0:55:35 > 0:55:39I'd probably pitch it around £75 per person per week,
0:55:39 > 0:55:42which would work out at around £1,300 per month.
0:55:42 > 0:55:46The property is going to be rented, I believe, on a room-by-room basis
0:55:46 > 0:55:50and I'd anticipate a rental in the region of £1,250 per month.
0:55:50 > 0:55:54We've actually let the rooms already to four students.
0:55:54 > 0:56:00- What are they paying? £72.50? - £72.50 each per week.- Per person.
0:56:00 > 0:56:02And £72.50 a week per room
0:56:02 > 0:56:05for the four rooms makes around £1,250 a month,
0:56:05 > 0:56:07so even with a student let
0:56:07 > 0:56:11which may be only nine to ten months of the year,
0:56:11 > 0:56:13that would give a yield
0:56:13 > 0:56:16of around 6%, so is this to be a long-term investment?
0:56:16 > 0:56:20- We won't be selling it. - It's certainly part of the portfolio
0:56:20 > 0:56:23for Richard's parents, who finance this,
0:56:23 > 0:56:27but eventually, it will come to us and then to our children.
0:56:27 > 0:56:30# Just find a feeling, pass it on
0:56:32 > 0:56:35# Just find a feeling, pass it on... #
0:56:45 > 0:56:47In the ever-changing world of property,
0:56:47 > 0:56:50there are always new things to learn
0:56:50 > 0:56:53- and we'll have more advice for you next time.- So join us then.
0:56:53 > 0:56:55- Goodbye.- Goodbye.
0:57:15 > 0:57:18Subtitles by Red Bee Media Ltd