Episode 52 Homes Under the Hammer

Even in today's challenging market,

Lucy and I still like dabbling in property.

We love to get a good deal,

but in today's market it's not always that easy.

But one way to stack the odds in your favour is visiting the auction.

Now, buying under the hammer has become more and more popular.

Millions of pounds of property are sold every month at auction.

So here are the three properties

that sold at auctions on today's show.

In Devon, there's a bungalow

that could open a few doors into the property market.

How fantastic is that?

A trip to Enfield in Middlesex leads me to an interesting development.

I hope looks aren't everything.

It's quite an eyesore!

And in Greater Manchester, there are some things best left alone.

When you knock it down, YOU don't. You have to get a specialist in.

All these properties went to auction.

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

when they went under the hammer.

This is Plymstock in Devon,

a pleasant suburb of Plymouth, a couple of miles from the city.

Once more of a village, it expanded in the 1950s

and appeals to home owners looking to take a step away from city life.

It's a funny old mix, this road. 1940s and 1950s houses,

semi-detached, detached and a bungalow. I'm delighted to say

that's what I'm here to see.

This is it. 170,000 quid was the guide price.

Three bedrooms. Bungalows are wonderful. They have such scope.

Let's see if this one is ripe for improvement.

From the outside,

this double-fronted bungalow appears quite imposing, if a tad tired.

The windows look like they will need replacing, and I'd check the roof.

The bungalow sits on a large plot

even though it's hidden behind this wall,

so all seems promising so far. Let's check inside.

Nice little porchway there. I always like those.

Through into the main corridor. Bedroom on that side.

It's already feeling quite big. This is the main living room area.

A huge great bay window.

Nice floorboards you could strip back. High ceilings.

It's got a very nice feel to it.

It's tired and a little bit dated, but the structure's really good.

And what's this?

How fantastic is that?

Sliding doors leading to what I guess was the dining room area.

Judging by the state of the electrics, it'll need a rewire.

It's a fairly old radiator, so cost in for some central heating.

But other than that, it's got a really nice feel.

'OK, it's a bit dated, but it's bright and spacious

'and it won't take too much

'to get it feeling fresh again.

# Singing a song Old paint is peeling

# This is that fresh, that fresh feeling... #

'The bungalow has three bedrooms, with two big ones at the front.

'Then a smaller one at the back

'that could feel much bigger if you removed the cupboards.

'The separate bathroom and loo could be knocked into one,

'but the real layout challenge is at the back.'

Through another sliding door, and it starts to go horribly wrong.

This is the kitchen. It's absolutely tiny.

Needs complete replacement.

But before you do that, maybe think of a bigger scheme,

because the good news is...

that out here there's a very large space.

It's like this fairly... I don't know, not exactly the best-made,

and slightly temporary, kind of lean-to area.

Extraordinarily hot today, it's the biggest utility I've ever seen.

So what I would consider doing is making something more substantial,

maybe putting a proper extension on.

Then knocking down that wall for a really nice kitchen dining area.

That makes a lot of sense and would dramatically affect this bungalow.

'The potential here is to make

a super kitchen/diner cum garden room.

'There's loads of land at the back.

'The garden is big and well-established.

'I'm feeling rosy about this place.

I reckon that as a refurbishment it could really bear fruit,

'but there's one little issue you may need to sort out.'

Well, parking around here is a bit of a problem,

so it's great to have a drive and a garage,

but as you can see you'd have to have a very narrow car

to get in the gap between the house and the wall,

so pretty much the garage is useless.

What I would think about doing is bring the garage forward,

build it here, you'd still have a drive.

At the same time, you'd also create some more space for the rear garden.

However, if you just use your garage to store junk, maybe leave it.

'You need to think carefully,

'as replacing the garage won't be cheap.

'And it might not add significantly to the future value of the property.

'We invited along a local estate agent to hear her thoughts

'on this detached Devon bungalow.'

My first impression is, it's a 1930s property.

It's spacious. When it's done up to a nice high standard,

it'll make a lovely family home.

Or even for a retired couple that like space on the level.

The property had an auction guide price of £170,000.

What could it be worth once refurbished?

I would look in the region

of £290,000 to £295,000.

Well, if the bungalow sold near the guide price of £170,000,

it sounds like there's considerable potential profit,

even allowing for the refurbishment costs.

This bungalow has the magic combination of space,

scope for improvement and super location.

If you're careful with what you spend, there's money to be made.

Let's see who went for it.

Lot 69. A good-sized three-bed, detached, double-fronted bungalow.

Who kicks off with 170?

165? 160.

162. 164.

164. 166. At 166.

168. 169.

170. 171.

172.

173. 174.

175. 176. 177.

178. 179.

80. 81.

82. 83. 84.

85. 86.

86. Handbrake for a moment. 186.

And 7. And 8.

188 and a half. A new face. 189. 189 and a half.

190.

190 and a half. 191.

191 and a half. 192.

92 and a half. 93. And a half.

And 4. And a half.

And 5. 195.

At 195 once.

At 195 twice. At 195.

Third and last time. Here it is. At 195...and gone.

Sir, madam, well done.

That last bid of £195,000 was made by Richard.

He was at the auction with his wife, Ida,

and Simon, his daughter's partner.

Richard's retired. Simon used to work in kitchen and bathroom fitting

and they're part of a property developing team.

I met up with them at the bungalow to hear about their plans.

Richard, Simon, lovely to meet you. Congratulations.

-I like this bungalow.

-So do we!

Tell me why you wanted to buy it.

There was something nice about it. It's light, airy, clean.

It seemed like a good investment.

-Big.

-Mmm, very big.

-The numbers stacked up.

That's primarily what I'm interested in and Simon does the work.

Let me get the personal relationship.

-This is your son-in-law.

-Yes.

-Well, will be.

-Will be.

-Oh, great.

-I proposed to his daughter on Monday.

-You proposed to her on Monday?!

-Yep.

-Did she say yes?

-Of course!

Well, congratulations! When's the wedding going to be?

We're expecting a child in September,

so we'll give it another year.

'This will be Simon's third child,

so he's going to be busy at home and with this house.'

# I am what I am, am what I am

# A family man... #

-So what are you going to do to this place?

-Well, a new roof,

rewire, replumb, replaster right the way through.

We're going to jiggle the rooms,

utilise more space. We're bringing a fourth bedroom in.

To the rear of the property,

the conservatory area, we'll put a proper roof on it

and make it into a luxury kitchen/diner area,

hopefully going on to put a reasonable-sized conservatory

onto the back of the property.

Basically, it will be totally renovated from top to bottom.

Richard's wife, Ida, and Simon's fiancee, Laura, will oversee

the interior decoration.

They've decided to relocate the garage to the side of the property

and enlarge it to take two cars.

Richard reckons that should cost

about £900 to £1,000, but what's the bigger financial picture?

Simon hopefully won't spend any more than about 35.

And then we'll probably spend another 11 grand on legal,

so that includes estate agents,

solicitors, stamp duty - that's already been paid,

which people tend to forget. That's nearly two grand.

And, hopefully, there will be a profit left over at the end

to cover Simon's advance drawings,

my interest, and we'll share what's left.

Listen, congratulations, and good luck. We'll see how you get on.

-Thank you very much.

-Thank you.

-And good luck with the wedding!

# I am what I am, am what I am

# A family man... #

So exciting times ahead -

a new project, a new baby and a marriage.

Certainly, the team have got themselves a really nice property,

but will Simon manage to keep to Richard's very strict budgets?

Find out later in the show.

Today I'm in Enfield, Middlesex,

a place that has quite a claim to fame.

Not only has it a well-established market trading for 700 years,

it's also home to the first cash dispenser machine,

installed here over 40 years ago.

The inventor had his "Eureka!" moment while having a bath.

Talking of getting soaked...

# Who'll stop the rain? #

Well, today in Enfield

I haven't chosen the best weather to view auction lots.

But I'm excited. I'm here to see

a building plot that had a guide of just £100,000.

And it's behind here.

So here's the land.

It measures over 0.2 of an acre, it's narrow and very long,

but this industrial unit really sits quite closely,

and it's quite an eyesore.

Well, not great. The industrial unit is a bit of an ugly neighbour.

But the other side of this extensive plot is residential,

so while you can't have it all,

for the guide price of 100 grand it represents extremely good value.

So what can you build on this plot? Well, it comes with planning

for the erection of a three-storey block of six flats -

one one-bed and five two-beds.

Parking has been allotted, too,

which is great, so all you need to do is work out the build costs

and the sale price or annual rental yield

and see if it's a viable project.

As usual, it all comes down to cost, especially on new-build projects.

The margins can be healthy if all goes to plan, but as we know,

any project that promises huge returns comes with added risks.

So beware, and make sure your sums are right.

So what's great about new-build properties?

They have the added benefit of an NHBC warranty -

the National House Builder Council warranty.

It means your new home will have been built

to specified standards of construction.

A real safety net. You also get a boiler guarantee and double glazing.

# For my brand-new house and my brand-new bride... #

So with the outline plans passed

to build a brand-new, three-storey block of six flats,

an investor who knows what they're doing could do really well here.

But with projects like this, the devil is often in the detail.

It's always good to have a look at a piece of paper with some plans on,

so you can visualise it.

I've got some here. You see the proposed front elevation

so you can actually see you've got five two-bed flats here

and one one-bed flat.

You've got the proposed side elevation. This was worrying me.

Obviously, because of its location, it's right next to a car park!

But the good news with that is only three windows overlook it,

so it's probably a bathroom or a bedroom. So not too bad.

And the side elevation here is going to face all the houses on that side.

So it's quite good just to visualise what this is going to look like.

Remember, these are outline plans,

so you'd have to submit a further application

to obtain full planning before starting any work here.

Proportions look good in the two-beds,

and the one-bed flat is perfectly adequate.

There's also a good deal of parking

in the plans, and that's a real marketing tool in a populated area.

The industrial unit aside, this is an established residential area.

While I'm sure the local wildlife will miss this,

the neighbouring properties will be delighted

to see this bit of scrubland developed.

So with the plot of land guided at £100,000, it's time to find out

what a local estate agent makes of the potential here.

It's a nice little plot with good access.

It's at the right end of the street here,

with access to the road.

The mixture of commercial premises next door is not great,

but we're right next to the residential stuff, too.

The site could make a good little investment,

but how would the figures stack up?

With five two-beds and one one-bed flat planned,

how much could they sell for?

I would imagine the two-beds would be around the £170,000 ballpark.

The one-bed, about £130,000.

The figures could add up to a £980,000 return,

so getting this site and the building costs right is important.

But how might rental income look?

There's two markets here.

The private market won't pay as much

as the local authority's home finders scheme.

They're paying as much as £975 per calendar month. Quite a lot.

Otherwise, they would normally be around £850 per calendar month.

If you stick to the plans,

keep build costs low and rent this out, the yield is healthy.

If you go over-budget and fail to attract tenants offering high rents,

this project isn't so attractive.

Someone fancied it, though. Let's find out who as we go to auction.

Lot 110. Enfield, nice site there. What'll you bid me?

Somebody bid me 80,000. Thank you. I went too low.

80,000. 82 and a half? 82 and a half, yep.

85. 87 and a half.

And 90. The gentleman... 100 with you. Wearing the hat.

102 and a half, sir. 105.

107 and a half. 110. 112 and a half.

115. And 17 and a half.

120, sir?

120, the gentleman on the second row with the pen. 122 and a half.

25. 27 and a half. 130. Yep.

32 and a half. 35.

This Enfield lot generated a lot of interest,

so that 100 grand guide price was left far behind. We pick it up

when the bidding had reached

-an amazing £250,000.

-For the first time at 250. Second time.

Fresh place, 255. Where did you come from? 260, sir. 265.

270. 275?

Still with you at 270. 275 anywhere else?

275. 280, sir?

280. 285? 285.

290. 295?

No? Sure this time? 290, on my right. Sitting down, smiling.

For the first time at 290.

Second time at 290. Third and final time at £290,000.

I think we're done this time. Sold to you, sir, at 290,000.

The successful bidder on the day who got the lot for £290,000 was David.

He runs a local skip hire company,

so plenty of contacts in the building trade

who he hopes will give him a helping hand on this. I met him

back at the site to find out more.

Dave, it's stopped raining! It's great standing on your land.

Let's talk about why you wanted to buy this.

Basically, I've got some money tied up, not earning much money.

The opportunity came, I saw the plot advertised on the internet,

went to the auction

and thought it a better investment

for the money I've got tied up in the bank with low interest rates.

-It comes with outline planning permission.

-Yeah.

Is that what interested you? It was ready?

Definitely. I needed something that was ready to go.

I didn't want anything risky without permission.

The fact we've got outline planning permission on it makes it easy.

To build six flats needs an awful lot of money to put up front.

Have you thought about how much?

Well, we thought about £300,000.

The architect said £350,000 to £400,000.

We had the flats valued before we went to auction

and the total project is about £1 million,

or just under. That's what we valued it at. So there is a profit in it.

What do you hope to walk away with?

Hopefully, we should make £250,000 to £300,000.

If it all goes according to plan,

Dave could be looking at a sizeable profit on this investment.

Ugly as the site is, it could be the basis for an attractive return.

# Beautiful wasteland... #

So do you have much experience

of building six flats? Quite a tall order, isn't it?

No, I haven't any experience of building six flats,

but I know lots of builders.

Owning a local skip hire company, we've 150 builders on our books.

So it shouldn't be a problem finding a builder to do it.

Have you ever done anything like this in the past?

Well, I've done flat conversion work before.

Some good, some bad.

The first project I did,

we were on a rising market and couldn't go wrong.

Everything made more profit than we thought we would.

Then the second project we did was on a falling market.

And that was one that I got my fingers burnt a little bit on.

So, we win some and lose some.

Time, as they say, is money,

and Dave's itching to get this investment paying its way.

With that budget of 300 grand, he won't let the grass grow

and is keen to get started as soon as possible.

When will the project be completed?

I think probably it's going to be a year to do the whole thing,

from getting the detailed plans passed from the council

to getting it finished.

-Probably about a year.

-Day to day,

how will you work it into your life? I'm sure you're really busy.

I am busy. We're just going to... I'll have a builder to site manage it

and I'll hopefully only come down from time to time.

When will you kick back and enjoy the fruits of your lovely hard work?

I don't really know. I've got enough time to do the things I like doing -

playing golf, a bit of sailing.

Things that I do as hobbies.

I've still got plenty of time. I don't want to retire yet.

-Dave, it's been so lovely talking to you. Good luck.

-Thank you.

How many people can say they know 150 builders? Well, Dave can!

His background and his connections should make this a breeze,

but we all know that new-builds throw up their own problems.

Find out how he gets on later.

Coming up, in Greater Manchester,

you'd need to study this house very carefully before buying.

It depends what you'll use it for.

In Enfield, it's back to the drawing board for Dave.

If anything came up, a similar project, I'd probably be interested.

But first, we see

how Richard and Simon's bungalow project in Devon went.

The outcome is absolutely brilliant.

Now back to Plymstock in Devon,

where earlier this three-bedroom detached bungalow was bought for £195,000 by Richard, on the left,

and his daughter's partner, Simon. Richard was looking after the finances,

and Simon, a kitchen and bathroom fitter, was doing most of the work.

He was engaged in more ways than one.

-This is your son-in-law?

-Yes.

-Married to your daughter.

-Will be.

-Will be.

-Oh, great.

-I proposed to her on Monday.

-You proposed to her on Monday?!

-Yeah.

-Did she say yes?

-Of course!

Well, it's now a year later, and we met up again with Richard and Simon back at the property.

There's been quite a transformation.

The drab, grey bungalow has been re-rendered in a brilliant white and cream.

And a new garage has been built in line with the front of the house.

At the back, there were so many trees you'd struggle to see the end of the garden.

Well, not any more.

The dilapidated old conservatory has been completely rebuilt.

It's now a wonderful L-shaped kitchen/diner, equipped to a very high specification.

And the layout's been totally changed, as Simon explains.

The best thing was moving the entrance, which was here.

We've gained more space by opening it right up and continuing round in an L-shape.

It gives the illusion of space and, again, contacting the old dining area.

The outcome of it is brilliant. The room's great.

It's family, young, old. Suits everyone.

And no expense has been spared on the quality of fittings in the refitted bathroom.

Simon's years of experience of bathroom and kitchen fitting are clear to see.

At the front of the bungalow, the large bay-fronted living room has been decorated

and a feature fireplace installed.

And the former dining room reached through the glass doors is now a bedroom,

taking the total to four.

The large bedroom at the front now has an added feature as well.

This is the master bedroom.

We've managed to add an en suite by taking space from the rear bedroom.

And we've obviously taken some space from this one, which we hope will add some value to the property.

The bungalow had to be completely rewired and the plumbing upgraded.

It took about nine months to get it to this stunning condition.

Whilst Richard's been watching the purse strings, Simon's done the majority of the work.

He became a dad for the third time to baby Lauren soon after they started here.

Along with his other two children, Jacob and Coby, how did Simon cope with the new baby?

Baby Lauren's been very good. A few late nights, but I get the smiles and I'm quite happy.

So the new arrival didn't stop Simon cracking on with the work, but it was slowed down by the harsh winter.

To stay on track they decided to get extra help.

We brought somebody in to help Simon. We actually budgeted for part of that,

but we realised with the timeframe we wanted

it was better to bring somebody in and do the plastering and do all the painting.

An added expense, but they both thought it was worthwhile.

Outside, there were major problems with the drains. How did they come to light?

Drain issues. Hmm. Not very good. Basically, we found that the drains were backing up.

We found trees growing into part of the drains, parts had collapsed.

Eventually, we got over it, but it's time, hassle, money.

So some money went down the drain, but did it wash away their budget?

My original budget was... or Simon and my original budget was actually £35,000.

We eventually ended up spending £47,000, so we were actually £12,000 over budget.

But primarily the main cost was an extra £3,000 on the roof

and we spent £7,000 on labour.

Time to see what two local estate agents think

of this bungalow that Richard and Simon have transformed.

When I walked through the door for the second time, I was flabbergasted.

It just looks so much bigger -

the extension to the dining room, or on to the garden with the decking.

What stands out for me, apart from the incredible finish and fittings,

is the sizeable kitchen and breakfast room, a great family area.

The garden was so overgrown. You've now got a child-friendly property.

You've got a level property for older clients. It's fantastic.

Simon and Richard have no intention of renting it out,

so what could it be worth if sold?

They paid £195,000 at the auction and their budget expanded to 47,000,

taking their total to 242 grand.

I feel we could put this on the market

for in the region of £300,000 to £320,000.

You could market this property in the region of £300,000 to £315,000.

That valuation range could generate a gross profit

before the usual selling expenses

of £58,000 to £78,000,

so what do they think of that?

I think 320 sounds very good.

We always want a bit more, don't we?

This looks like a dream team,

with Richard's financial expertise

and Simon's unmistakable skills on show throughout the property.

It's a credit to Simon. I haven't been doing the work.

Simon's been doing it and it's an incredible job.

The finish and the workmanship is good.

It could have been a little bit quicker,

but that's not the way these projects happen.

We'd like it to be done quicker and make more money,

but it's a good project.

I'm about three miles outside Manchester city centre

in an area known as Fallowfield.

During the Industrial Revolution,

this was the place that the well-to-do came to escape the smog

and general noise of the industrial heart of the city centre.

Nowadays, it's still a very popular place to live.

As a result, some great architecture

and grand residential housing was built here.

The other main attraction a short walk away is Manchester University

and you'll know just what that can mean.

You don't need to be a degree student to work out

that with the thousands of students

starting at Manchester colleges and universities every year,

there is going to be a huge demand for accommodation,

and the property I'm here to see could be perfect.

It's a three-bed semi-detached with a guide price of 140,000 quid.

Let's take a look inside.

A large number of properties round here are buy-to-let

for the student rental market

and the current student population is growing.

Is this the sort of place modern scholars are after?

Through the front door and what have we got? A decent-sized entrance.

Stairs up to your bedrooms there.

On the right-hand side, living room,

but if you rent this place out, that could be another bedroom

and if you're about maximising your profit and your income,

the more bedrooms, the better.

You could convert the rear sitting room into a bedroom too,

because the kitchen isn't a bad size.

It's got this bit which was the original part of the house,

then on the back there's a flat-roof extension, which isn't ideal,

but it means that the kitchen itself could be a kitchen/dining area.

It depends on what you're going to use the house for,

but in terms of a start, not at all bad.

The layout here really doesn't work,

but you've got the space to change it.

I'd be tempted to put the units at the far end to overlook the garden,

leaving this part as a dining area or breakfast bar,

but so far, there are no major complaints, really.

One thing I really like about this property

is that you do get a sense of space -

lots of light coming in to the stairway area here

and there's this landing area.

It's probably not the best use of space,

but it gives the house a nice feel.

Up here, a bathroom. It's not huge, but it's OK.

Small bedroom at the back there, medium-sized bedroom next to it,

then your third bedroom which,

thankfully, is a good size at the front of the property here.

Now, obviously, everything needs to be re-decorated for sure

and one thing you are going to do is take off these polystyrene tiles

because they are a fire hazard.

But in terms of space, it's a good-sized room and lettability,

well, definitely a big plus.

It's not just in here those tiles will need to come down.

Every room has them. Let's just hope the plaster above stays intact.

# I'm gonna stick like glue

# Stick because I'm stuck on you...

But overall, refurbish the rooms, modernise the bathroom

and this property might be ready to go.

At the rear of the property, you've got a really good-sized garden.

If you rented this out to students,

this is a bad thing to have because they won't cut the grass!

However, as a family home, a really good thing to have.

It depends what you use the house for.

One thing I've spotted at the back is this old garage.

It looks fairly innocuous, although a bit dodgy round the edges.

The bad news, though, it's asbestos, which means when you knock it down,

you have to get a specialist in to do it.

Not only do you have to get it removed carefully

by a licensed contractor,

disposal of the waste can only be done at a licensed disposal site.

It can all start to add up,

so it's important to include that in your budget.

So remembering that the house was guided at £140,000,

it's time for a local estate agent to tell us what he thinks of it.

First impressions are that it's dated, it needs an overhaul,

but it's a good size, good-sized rooms,

nice extension on the back of the kitchen, nice plot.

With a bit of investment, it'll be a really good property.

But how would investment figures look?

Guided at 140 grand, would there be a good return on a re-sale?

Once the property has been fully refurbished,

I would expect it to sell for circa £190,000.

How would the rentals look

both for the family market and the growing student population?

If we were to rent this property to a family today,

I'd expect to get £750 to £800 per calendar month.

If it was offered for the student market,

I'd expect the property

to achieve somewhere in the region of £1,000 per month,

based on four people sharing at £250 a month each.

Well, as a family home or a student let,

I don't think you can go far wrong with this place.

And at that guide price of 140,000 quid,

I'm sure it generated a lot of interest

when it went under the hammer.

Lot 9, three-bedroomed, semi-detached house. Where shall we start?

120? Let's be reasonable. 120? 120 I am bid. At 120 in the room.

120 I have, then. At 125? At 125 bid. At 125,000. New bidder at 125.

Do I see 130? 130 bid. 135?

It's against 135. At 135.

Do I see 140?

140. 140 I have now. Do I see 145 in the room?

145 bid, new bid. 145. Do I see 150?

Sorry? 150. 150 I have, new bid.

At 155 now it's against. At 152 and a half. 152 and a half. 155.

At £155,000. Do I see 156? At 156, quick.

157. At 157. 158.

At 158,000 on the phone. 159. At 159. 160?

160. 161? Could be the last bid.

At 161, it's against on the phone. Paddle 324 at 161.

At 161 for the first time...

At 161 for the second time... Are we all done at 161,000?

That's yours - paddle number 324.

'That successful bid of 161,000

'was made by Richard and his wife Margit.

'Richard is a retired chartered surveyor

'and this will be the couple's first residential development.

'I met them to find out more.'

-Margit, Richard, lovely to meet you both.

-Hello.

-Congratulations.

-Tell me why you wanted to buy this place.

-It's the area, really.

We're wanting to have a house for student lets.

-Ah.

-And it's a very, very good student area.

And the size of house - it's not too big, but not too tiny either.

With a good bit of work on it, it'll be perfect.

So is student lets something you've done before?

No. No, we haven't.

Nothing done in residential at all.

Richard has had a commercial property for quite a while

which has been let out,

but this is something very new.

We were just looking for a different way of expanding.

Having a commercial property in this recession,

quite a few of them are empty for a while,

so we thought, to add to our portfolio, it should be residential.

We come from this area,

so we know there's lots of students in Manchester,

so it was the way to go.

-Do you live quite close?

-No, we live in Holyhead.

-Holyhead, Anglesey?

-Yes.

-Right.

How is that going to work

in terms of managing the property and also doing it up?

Well, our son is just leaving the navy

and going back into residential lettings

with his old company and he'll be doing student lettings,

so he'll be managing it, and we've got a good builder lined up.

We'll come backwards and forwards to monitor things,

but we can leave him to it

and everything will be done and dusted.

'Not only an investment for Richard and Margit,

'but a chance for their son to get in on the act.

'With the three bedrooms upstairs,

'they plan to use one of the ground floor reception rooms as a double,

'so the house will be a four-bed rental,

'hopefully generating £80 per week per room, bills not included.

'But what sort of accommodation can the students expect in return?'

Well, the obvious, as you can see,

new bathroom, new kitchen, completely new decorating.

All the walls and ceilings will be stripped,

so there'll be quite a bit of re-plastering.

At that point, we will re-wire the property

and new flooring, new decorating, basically, everything new.

What budget have you got for the work?

Realistically, we're looking at about 25,000.

-Oh, wow!

-For all of the work.

-That's pretty healthy.

Well, it is because, you know, re-wiring, kitchen and bathroom,

but the polystyrene tiles, they're on every ceiling.

That's going to damage the plasterwork, obviously,

with the re-wiring chasing out through the plaster,

so we've built in complete replastering.

'Many people underestimate their budget when renovating a property,

'so Richard and Margit are adopting a sensible approach.

'But Richard has also discovered

'that the removal of the chimney breast

'in the front room and main bedroom

'has left the chimney stack unsupported,

'so that will need to be made safe

'and making this investment safe is important

'because it's not Richard and Margit's money at stake here.'

It's my mum and dad.

They sold a house and moved to a smaller property.

And so we're investing the money for them to get the income.

We're managing it for them

and then taking a small share for our management expertise.

-Oh, wow!

-And my dad and I have been in business as partners

for years before he retired in 1990.

-Doing what?

-We're chartered surveyors and auctioneers.

-You definitely know what you're doing, then.

-We hope so.

-We hope so.

And I detect an accent that isn't Manchester from you.

Well, I have been told that I've got an Austrian accent

with a Mancunian slant to it.

I lived in Manchester for many years but originally, I come from Austria.

-Whereabouts?

-A place called Linz, an hour and a half from Salzburg,

between Salzburg and Vienna.

-What brought you to the UK?

-I came a long time ago to study English

and I came as an au pair girl.

-Oh, wow!

-In 1977 I think it was, yeah.

-And how long have you two been together?

-Not that long.

It's longer than we think!

We've been together for 12 years?

-1998.

-You shouldn't ask questions like that, because I'll forget.

-1998, it was.

-I'll get rapped over the knuckles.

-12 years, yeah.

-Congratulations.

-Thank you.

-Thank you.

-We'll look forward to seeing how you get on.

We'll look forward to showing you.

It seems that Richard and Margit

have certainly got things fairly well sussed

and it's good to hear that they've allowed a realistic budget.

However, they are managing the project from quite a way away

and the clock is ticking when it comes to getting those students in

before the start of the next term.

So how are they going to get on? You can find out later in the show.

It's been a while since we visited those properties.

There should have been work done, but you can't bank on it.

All sorts of problems can arise,

so what have our buyers had to deal with? Let's find out.

We return to Enfield in Middlesex

to catch up on what appeared to be little more than some wasteland

between residential housing and an industrial estate,

but it was so much more than that,

as it had the all-important asset of outline planning permission

to build six flats in a three-storey block,

so for skip hire company owner Dave,

it seemed too good an opportunity to miss.

He paid 290,000 for it

and it was time for Dave to call in a few favours.

Do you have much experience of building six flats?

It's quite a tall order.

No, I haven't any experience of building six flats at the moment,

but I know lots of builders.

Owning a local skip hire company,

we've got about 150 builders on our books,

so I should find a builder to do it.

So, armed with a £400,000 budget and his pool of builders to call on,

Dave set about the task of turning the wasteland

into what he hoped would be a site worth over £1 million.

So have things worked out as he hoped? 17 months on, we're back.

Wow! It certainly seems promising.

The building's up and it looks almost finished.

There's clearly some landscaping to do, but all in all,

from the outside, it's almost job done.

And inside, well, judging by the stairs, it still has a bit to go,

but what have we got here?

Well, we've built six flats.

Five of them are two-bed and one one-bed.

On the ground floor at the front, there's the one-bed flat.

It looks nice and spacious, if a little lacking in fixtures

in what will be the kitchen/dining area.

At the back on the ground floor is a two-bed flat,

still with a bit of finishing off to do,

but the kitchen has been installed.

There are a further two two-bed flats on the middle second floor,

also still a few weeks away from being ready for the re-sale market.

So it looks like it is all going to plan.

We basically built them

to the plans that we had when we purchased the land,

so we've just basically got the detailed planning and built those.

So the final two two-bed flats

are on the top floor and they're just about finished.

This is the top floor flat. It's a two-bedroom flat.

We've built a lovely feature window there,

a very large dining room area to this side.

We've got a modern kitchen here.

It's got a built-in fridge, a built-in freezer,

a built-in washing machine

and a light, modern kitchen.

Dave had hoped that it would be done in a year, but it took a lot longer

to get the utilities in.

That slowed the project down, though it's all gone pretty well.

With Dave having his own skip hire business to run, how did he cope

with overseeing a large project?

I wasn't going to handle the project myself,

so I decided to look around

for a good builder I could sub-contract it out to.

I found one and he's handled the whole thing,

including employing all the sub-contractors,

handling the planning permission and everything,

so I haven't been hands-on.

I've only really come along to see

how it's been going and supplied the money to do the build.

That amount of money was originally set at £400,000,

so has he stuck to that

or did he need to dig deeper to fund it all?

We're a little bit over budget. I think we're probably at about 420.

A £420,000 spend on top of his £290,000 purchase price,

plus costs and fees, take his total investment to around 720,000.

He was hoping the six flats would be worth around £1 million.

So has he got his sums right?

What do two local estate agents think of his six Enfield flats?

The properties are big, they're bright and very well laid out,

so yes, it's good all round.

It's quite a high spec quality.

The thing I get first is the space. Very, very spacious units.

There's off-street parking and nice communal gardens too.

No-one will struggle for parking here and there's plenty of places

to park on the road too.

Generally positive feedback

from the estate agents, but with Dave's spend of around 720,000,

will the re-sale value of the flats mean it was a good investment?

I think the re-sale values

are going to be in the region of £180,000 to £185,000

for the two-beds.

The one-bedroom flat will be a bit cheaper. That will be around 140,

maybe a bit more, maybe £145,000.

The re-sale values of the two beds will be around £175,000

and the one-bedroom, £135,000 to £140,000.

Even at the lower valuation, that's in the £1 million ballpark.

That would give Dave a pre-tax profit of around 300,000,

minus the usual selling expenses.

Is he happy with that?

Yes, it's not a bad price.

I thought perhaps we would do a bit better than that.

I thought perhaps £1.1 million.

The original price was about a million,

so considering the standard of the flats we've built here,

that's about correct to what we're looking for.

And if that pre-tax profit of around 300,000 isn't enough,

the flats also have great rental potential.

In terms of rental values for the properties,

the two-bedroom flats are likely to achieve

around £850, maybe £900 per month

because they're done to a very nice standard.

The one-bedroom flat will be around £700 to £750 per calendar month.

The two-bedroom flats, you can expect to get £1,100 per month,

and the one-bedroom, £800 per month would be realistic.

The rental values seem pretty good,

although we're not interested in renting. We are going to sell.

We've done them to a very high standard

and we wouldn't chance them getting damaged by renting them out,

so they're going to be sold off.

So despite rental returns of between 60,000 and 75,000 a year,

which could net a yield of about 10%,

Dave is determined to stick

to the original plan as he has throughout this development,

but does he see himself doing any more property investing?

I'll go back to running my business,

which is basically a skip hire business, and keep an open mind.

If anything does come up

that I could have another go on a similar project, I'd be interested.

At first, the Fallowfield district of Manchester may appear to be

just another suburb of a large city,

but for a property developer, it's anything but.

Situated close to the University of Manchester,

it has a large student population requiring accommodation.

With student lets usually worked out on a room-to-room basis,

the right property can bring in a pretty decent return,

so when a three-bed house came up for auction in the area,

retired chartered surveyor Richard and his Austrian-born wife Margit

snapped it up for 161,000.

Although it was bought with student lets in mind,

it actually wasn't bought by them or for them.

It's my mum and dad.

They sold a house and moved to a smaller property.

So we're investing the money for them to get the income.

We're managing it for them

and then taking a small share for our management expertise.

But their management expertise wasn't going to be on site.

As the couple are based on Anglesey, they needed to contract the work out

and hope regular visits would keep things on track,

so they armed their building team with a £25,000 budget

and set about turning this rather dated house into modern,

high quality student accommodation.

Well, just 12 weeks later, and we're back.

Outside, the house wasn't in need of much attention.

It was inside where a change was required.

And boy, has it got it!

It's light, airy and welcoming.

The downstairs front room has been turned into a completed bedroom

that's furnished, ready for some diligent study.

The back room is now a modern lounge.

Perhaps the most impressive change is the old kitchen area...

..which has been transformed into a fully equipped, modern kitchen,

catering for most student needs.

We started with stripping all the old kitchen units out,

you know, and we also had to re-roof the flat roof.

Ceiling tiles, all polystyrene ceiling tiles, these came off,

re-plastered, stripped that off, re-roofed it.

We put a larder unit in here because there's no storage.

Over there, underneath the stairs, was the old pantry,

but there's a downstairs toilet there now underneath the stairs,

so we thought we'd better have a larder unit.

So we put that, and finally, to finish off, we put the breakfast bar.

So with the kitchen finished off to a high standard,

there was just the matter of the upstairs.

With all the rooms benefiting from a full makeover,

these three bedrooms, along with the downstairs bedroom,

are ready for occupation.

The bathroom has been refurbished with students very much in mind.

What we've done in here is exactly the same as the rest of the house.

We've completely gutted the room out.

This was the only corner where we could have a shower,

so we had to move the toilet to the other side.

But it was quite easy to do, the plumbers tell us.

We had a new wash basin installed.

The central heating radiator was here, so we just replaced it

with a towel rail.

We put the new flooring in and all the pipes went underneath the floor

and we're very pleased with the result of it all.

With the upstairs space complete,

it was just a case of tackling the garden

and removing that toxic asbestos garage

and it was job done.

But at what cost?

The original budget was £25,000.

It's increased only a minimum, £500, you know,

so we've perhaps gone 500 over the 25,000.

With a £25,500 spend

and an initial purchase price of 161,000, plus costs and fees,

that will take their, or should I say, Richard's parents' total spend

to just short of the £188,000 mark.

So have the couple made a good investment on their behalf?

What do two local estate agents think?

It's a very nice house. I've been in a lot of these properties.

And this one is in particularly good condition throughout.

They've done a fantastic job on the property.

It's one of the best refurbs I've seen in the area.

This project has always been about rental and room-by-room rental

for the student market.

But would their investment of around 188,000 realise any profit

if it was sold?

If I was to put this on the market,

I'd suggest a price in the region of £190,000.

I'd anticipate somewhere in the region of £200,000 to £210,000.

So, not much profit, if any, to be seen on the re-sale market,

but rental really is the name of the game here.

If I was to put it onto the market,

I'd probably pitch it around £75 per person per week,

which would work out at around £1,300 per month.

The property is going to be rented, I believe, on a room-by-room basis

and I'd anticipate a rental in the region of £1,250 per month.

We've actually let the rooms already to four students.

-What are they paying? £72.50?

-£72.50 each per week.

-Per person.

And £72.50 a week per room

for the four rooms makes around £1,250 a month,

so even with a student let

which may be only nine to ten months of the year,

that would give a yield

of around 6%, so is this to be a long-term investment?

-We won't be selling it.

-It's certainly part of the portfolio

for Richard's parents, who finance this,

but eventually, it will come to us and then to our children.

# Just find a feeling, pass it on

# Just find a feeling, pass it on... #

In the ever-changing world of property,

there are always new things to learn

-and we'll have more advice for you next time.

-So join us then.

-Goodbye.

-Goodbye.

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