Episode 83 Homes Under the Hammer


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Episode 83

Martin Roberts and Lucy Alexander visit a house in Canterbury, a spacious property in Derby, and an end of terrace in Doncaster. Find out who bought these properties at auction.


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Hello. Now, buying property isn't always as easy as it seems,

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especially if you get stuck in one of those dreaded property chains.

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But you can eliminate that part altogether, if you buy at auction.

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There are all sorts of properties coming up for auction these days.

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And their buyers have all sorts of plans and budgets for them.

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So let's see which ones are featured on the show today.

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Is it the big garden and rooms in this Canterbury house that had me jumping for joy?

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I shouldn't really be doing that!

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In Derby, don't be put off by the size of this property.

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It needs updating, it needs modernising,

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but, oh, it feels really spacious.

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And this Doncaster end-of-terrace clearly needs work.

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The kitchen's already been stripped out downstairs.

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sadly, it doesn't get much better upstairs.

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All these properties went to auction.

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

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-when they went under the hammer.

-Sold.

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I've come to Canterbury in Kent, a city brimming with history.

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It's home to England's oldest cathedral, which has attracted thousands of pilgrims,

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as Geoffrey Chaucer told in his famous The Canterbury Tales.

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There are three main universities here,

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so there's a large population of students.

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Well, the property I'm here to see is close by this newly-built student accommodation, which bodes well.

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Right by the side of a main road, but there could be bus routes, so again, that's good news.

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So what is it? Basically, a two-bedroomed end-of-terrace, Victorian,

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at a guide price of 90 to 100,000 quid.

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Obviously, there's lots of learning going on here.

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Let's learn about the property.

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# Locked out... #

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Right, first lesson... Can't get in through the front.

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Better try the back.

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# Locked out... #

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Well, that's the first test failed.

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Let's hope things improve round the back.

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I've got to get in here somehow.

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So what have we got?

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Oh, dear.

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Well, this is the kitchen.

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As you can see, it's, er, yes, it's in a right old state.

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Pfft!

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You're going to rip it all out, let's face it.

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What we like about the room is its size.

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It is good. You could easily get a dining room table in there or whatever.

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Nice high ceilings. What we don't like is all this mould.

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I mean, look at it!

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Well, let's hope the rest of the house isn't quite so...wet.

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And the mushrooms in this kitchen aren't the edible type.

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There are some serious damp issues here.

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So, an alarming start for this property, that went to auction

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guided at 90 to 100,000.

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Let's hope this isn't a sign of things to come.

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-What on earth is that?

-HE CHUCKLES

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No idea!

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Well, anyway, I'm liking the size of this room.

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Really good-sized space and I think even these floorboards

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and everything would clean up quite nicely.

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Archway through to the front room, if you like.

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Again, nice floorboards. Well, nice floorboards here.

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But what is going on towards the bay window here. Ooh, my word!

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I shouldn't really be doing that! That is not good.

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My guess is that, well, the joists underneath there have rotted away,

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probably due to water coming in here.

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And, if I'm not mistaken...

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# The dust on the ground... #

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Not very good, is it?

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Hmm, just as I feared, more damp.

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This is a worry, as the back of the house is riddled with damp -

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and the front.

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I just hope whoever bought this property at auction

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factored the expense of getting the damp sorted into their budget.

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This place is gradually rotting away.

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The large garden is slowly taking over.

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So I wonder what the upstairs will be like?

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Well, you've got two really good-sized bedrooms

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and a view of the mountains!

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# Mama, look at the mountain Papa, look at the sea... #

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So, through to the bathroom and the loo. Well, it's a separate loo here.

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And the bathroom itself is here.

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It's got a bath and shower and it's got just way too much space.

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I mean, look at it! I don't know if, at some stage, judging by the fireplace here,

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this might have been a bedroom.

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Well, certainly I think that is something you should consider turning it back to.

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It's disproportionately big, I think.

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Well, if this was a family home, maybe it would work pretty well.

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But if we're thinking about using this as a student let,

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it's all about maximising the number of bedrooms

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and I reckon you could get another bedroom in here.

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So, with a bit of playing around, how many bedrooms do we think we could get?

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Two downstairs, obviously. Convert those two.

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One here, that's three. Maybe that front bedroom, split that into two. So that's another one.

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I reckon you could get six bedrooms in this place.

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Six bedrooms, say, £80 a week, that's £480 a week.

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That's nearly £25,000 a year.

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Take off holidays, maybe it's 24, 23. It's still a lot of money!

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There's one more surprise in this property. There's a basement.

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That could be converted into the ideal communal room for a student let.

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But remember, you must check with the local council

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before carrying out any basement conversion.

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There may be planning permission required and strict

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and strict building regulations to comply with.

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We asked a local estate agent to come and have a look around

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and give his opinions of this house that went to auction, guided at 90 to £100,000.

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There's a lot of potential here

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for someone either to convert into student accommodation

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or to redevelop into a family house.

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If the property was just renovated and kept in its current configuration,

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how much could it be worth if put back on the market?

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Once renovated, if the configuration's kept as it is,

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the value is going to be enhanced to probably £170,000.

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What rent could it generate if it wasn't divided into flats and let to a family instead?

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If renovated and refurbished as is, and then let to professionals

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or a family, the rental value would be about £650 per calendar month.

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How does that £650 a month compare with student lets?

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Let's take a conservative example of four students.

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If renovated and let to four students, they would each pay about £330 per month.

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That would translate to over £1,300 a month in total.

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So there's no doubt that letting to students holds the most profitable future here.

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Well, there's clearly a bit of work required to sort this place out

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but, you know what, spend a bit of money here and I think you've got yourself a real money-earner.

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It's a big house in the right location.

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Let see who spotted it when it went under the hammer.

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Lot 69, it's an end terrace.

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Does has a bit of gas heating, does have some double glazing.

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It's two bedrooms. It's got a guide of 90 to 100,000.

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Start me at 90, give you all a chance. 90, I have, thank you.

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£90,000, I'm bid, and five, I have. 100, and five.

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And five is bid. 110, 115, and 20, and 125?

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125 and 130.

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135? No. £130,000 is bid.

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132?

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132 in a fresh place. 135 is bid. 138?

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135, 136,

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137, 138.

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138 in a fresh place. 139 and 140,

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142 and 144.

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144, 146 and 148? No.

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146, I'm bid. At £146,000 is bid.

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At £146,000, bid on my right-hand side, against the wall.

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And a half?

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And seven?

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At £147,000, I have. For the first time at 147,000...

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For the second time at 147,000...

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Third and final time.

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The bid is on my right-hand side. At £147,000, are you all done?

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-BANGS GAVEL

-Sold at 147,000.

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Those successful new owners, who paid £147,000, are local couple Ronnie and his wife Catherine.

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They used to be teachers , but are now full-time developers

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and own other buy-to-let properties in Canterbury.

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I caught up with them back at the house to find out

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why they were so keen to get their hands on it.

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-Ronnie, Catherine, lovely to meet you both.

-And you.

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-Congratulations.

-Thank you.

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Tell me why you wanted to buy this place.

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Well, I think there's three things about Canterbury that you need to understand.

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Firstly, it's a beautiful, beautiful city. It's full of history.

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It's full of culture. It's got two theatres.

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The second thing is, it's a university city, a vibrant city.

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It's a great place to be, which is why we live here as well.

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And then the third thing is that, in October this year, the legislation's changing,

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so most university city councils can now choose to give permission or

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to withhold permission for people to set up multi-lets for students.

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That means that university city councils like Canterbury can limit

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the proportion of HMOs, or houses in multiple occupation, within a certain area.

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For student landlords, that means the clock is ticking when it comes

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to any likelihood of getting a new HMO licences for new premises.

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So, Ronnie and Catherine bought this place just in time.

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But what was so appealing about it?

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I looked at the spec and I thought, "That's only going to be for four students."

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And I came in here and I looked it and I thought,

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"There's letting room one there." That's a good-sized room. This is a good-sized room.

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Kitchen is a nice-sized kitchen.

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The basement, perhaps, the hope is that we can turn it into a communal area down there.

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Then upstairs, I looked and saw the bathroom and I thought, "Why does this have to be a bathroom?"

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Because the other two rooms are big, as well.

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So, if the bathroom is turned into a bedroom, you've got natural light.

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You don't need natural light for bathrooms, really.

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So we can put two bathrooms up there, still leaving

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a very good-sized bedroom and then two rooms at the front, as well.

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So it's going to be a very spacious student property.

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But a six-bedroom one, so a bit of a money-spinner.

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It depends on what happens with the student market,

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because there are all sorts of changes happening with the student fees.

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The numbers might drop.

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But, on current status, it would be about 28,000 a year.

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A healthy income from the six bedrooms they're proposing -

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two on the ground floor,

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while upstairs, the front bedroom will be divided into two more.

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The fifth bedroom will go where the bathroom is.

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And bedroom six made from what's left over after the back bedroom's

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been split into two bathrooms and a bedroom.

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The couple both clearly have a lot of experience,

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so what are their roles in the business?

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Ronnie does a lot of the maintenance

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and I find the properties, organise the finance.

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I do a lot of the accounts.

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-I started off life as a bench joiner.

-Oh, really?

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But obviously, I'll need to bring in gas-safe plumbers and electricians, and things like that.

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But most of the practical work, I do myself.

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And the budget, then, approximately?

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We're looking at around about 25,000, that sort of figure.

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And what's the timescale?

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Well, we want to turn it round in about three months,

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because we've got to get it ready for the end of August/September.

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-The intake.

-Yeah, so it's tight, but I'm confident we can do it.

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-Well, congratulations to you both. Good luck with it.

-Thank you.

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-And I look forward to seeing how you get on.

-OK, thank you.

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Well, Ronnie and Catherine certainly seem to know what they're doing

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and they've got the experience to make a success of this place.

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But I still think it's going to be, well, a bit of a squeeze to get those six bedrooms in.

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And, of course, they're on a timescale to get it all sorted out before the new term.

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How will they get on? You can find out later in the show.

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For the next property that went under the hammer,

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I'm in the Midlands, in the suburbs of Derby.

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In fact, I'm about three miles from the city centre, in Alvaston.

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Alvaston used to be a village on the outskirts of Derby,

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but in the mid-19th century, it became a terminus for a tram route.

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So with this direct commuter link straight into Derby,

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it became a popular place to settle.

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And Alvaston boomed with streets and streets of houses being built.

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Now it's very much a suburb, but it's still a popular place to live for commuters.

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# We're on the outskirts of the town... #

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The tram no longer exists, but Derby is still within

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easy striking distance, with plenty of road and bus links.

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So what am I here to see? Well, it's this semi-detached house,

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which I think looks like it's a bit crammed into the corner of this cul-de-sac.

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It had a guide price of £50,000 and it was described

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in the auction catalogue as "having two or three bedrooms".

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So, come on, which is it, two, or is it three?

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I'm going to go in and find out.

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This entrance path is not that inviting, with all these weeds,

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but the property has double glazing and looks basically sound.

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Not a huge entrance hallway.

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You sort of walk straight in to this rather unusual sort of bookcase

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that goes all the way up the stairs.

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So, here we are.

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Now, actually, it's just shows you first impressions can be WRONG,

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because that's quite a big room.

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That's quite a big room and, come in here,

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look at the size of this kitchen!

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Wow!

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There's a lot of space in here. You could really use this to your advantage.

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A lovely family table down that end, so you could eat in here.

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You could get away with potentially just changing the worktops.

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You could change the units as well, but they don't look to be in that bad a condition.

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Er, some rather interesting features in this house so far. Look at that!

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It like a radiator cover that they've wrapped round the boiler.

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You know, it needs updating, it needs modernising. But, erm, cor!

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It feels really spacious.

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Like the kitchen, the two reception rooms could also do with

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a bit of updating and redecorating.

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But the house, that was guided at 50,000 plus,

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has gas central heating and appears to be structurally sound.

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But, at the back, the original windows and doors

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have obviously been moved and the large garden needs attention.

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Well, that's not great to look at when you walk out your back door,

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so, I think we're agreed, a lot of that's got to go.

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You need to get a skip with this house but,

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when you buy a corner plot property, you don't always get a lot of room.

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Well, look. Check this out.

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This is a huge garden!

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I can really see a family loving this,

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but you must always remember, when you let to tenants,

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you've got to make sure that they maintain the garden.

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And it's got to be done on a regular basis.

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Otherwise, this large family garden could quickly become an untamed jungle.

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So, back inside, I head upstairs to discover just how many bedrooms there are.

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So here we are upstairs. There's bedroom one - quite big.

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We've got bedroom two over here - spacious.

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A bathroom - that's really large.

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Is that the possible third bedroom, as described in the catalogue?

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Aha! No, it's a shower room. There is literally a shower squashed in the corner.

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Now, I suppose at one point in the house's history,

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it would have been the third bedroom.

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Should you convert this back again?

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Well, I like plenty of bathrooms, but for a house this size,

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two just seems a bit excessive.

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And a third bedroom, well, that would make the place more saleable.

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And it will give you a higher rental return.

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So, if this was mine, I would ditch the shower, I would steal a bit of the bedroom from next door,

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knock that wall down so you've got a big, large bedroom here.

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You could leave the bathroom where it is.

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Or you could turn this bathroom into a bedroom

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and put that three-piece suite into here.

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So you've got a few options to help get that third bedroom.

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Would all that rearranging and replumbing to get a third bedroom really be worth it?

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# Everything must change... #

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Time to ask a local estate agent what

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she thinks of this corner house.

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The property itself, tucked away in a little corner.

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It's deceptive from the front, opens out into this nice, spacious house.

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Needs a little bit of TLC.

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In general, it's in good, solid condition.

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Two bathrooms and two bedrooms doesn't really make any sense.

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I think the larger of the two bathrooms could be made back into a bedroom.

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If it was bought by a buy-to-let investor,

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how much rental income could they hope to generate here

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as a two or, if converted, three-bedroom property?

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If the property remained as a two-bedroom property,

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you're looking between 400 and £425 per calendar month.

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If it was made into a three-bed, you'd increase that up to

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approximately £475 per calendar month.

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What could it be worth if sold on after a refurbishment?

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If the property was improved to a reasonable standard,

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yet remained as a two-bedroom property, the maximum you can expect

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on the open market at the minute would be £75,000.

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Made into a three-bed, you're looking at up to about 90, maybe 95,000.

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This house needs a bit of an update but, other than that,

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I think it's quite a nice little property.

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But will the new owner think the shower room

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is a bonus or better off as a bedroom?

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Let's find out who bought this at the auction.

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Lot number four, tucked away in the corner of a cul-de-sac,

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it's a two/three-bedroom semi-detached property

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with a large garden, illustrated there for you.

0:19:370:19:39

How much for this one? 48 will start me.

0:19:390:19:43

48? 48,000, thank you.

0:19:430:19:45

At 48,000, 49 I've got.

0:19:450:19:48

49,000, 50? 50,000.

0:19:480:19:52

At 50,000, 51 is bid.

0:19:520:19:53

At 51, 52?

0:19:530:19:55

52. At 52? 53?

0:19:550:19:59

53. At 53, 54? 54?

0:19:590:20:04

Try another one, sir. It's worth another bid. 54 and a half. 55?

0:20:040:20:10

At £54,500 and across the way, 55 quickly, anywhere else?

0:20:100:20:15

For the first time at 54,500... Second time...

0:20:150:20:18

Third and last...

0:20:180:20:20

-BANGS GAVEL

-Sold at 54,500, thank you.

0:20:200:20:24

Well, that final successful bid of £54,500 was made by

0:20:240:20:29

Birmingham-based developer Aziz.

0:20:290:20:31

He used to teach electrical engineering, but is now a full-time developer,

0:20:330:20:37

so why did he want to add this to his portfolio?

0:20:370:20:40

I met him back at his latest purchase to find out.

0:20:420:20:46

-Aziz, hello. Congratulations!

-Thank you very much.

-What a lovely surprise!

0:20:460:20:50

You know, from the outside, your house looks incredibly pinched,

0:20:500:20:53

but you walk in - it's just like a big TARDIS!

0:20:530:20:56

Very deceptive. Corner plot, massive garden at the back, big-size rooms.

0:20:560:20:59

All the amenities very close by.

0:20:590:21:02

So how well do you know Alvaston?

0:21:020:21:03

I've got a couple of other properties in Alvaston and Allenton, so I know it's an established area.

0:21:030:21:08

People do want it, it's in demand.

0:21:080:21:10

So what have you bought this for?

0:21:100:21:12

Renting it. I'm in the letting business, so I'll rent it.

0:21:120:21:16

So how many years have you been developing for?

0:21:160:21:18

Oh, I've been dabbling in properties on and off for the last 10-15 years. But this is now first year full-time.

0:21:180:21:24

How many properties are in your portfolio?

0:21:240:21:25

Well, in Derby, about nine or ten, in the last six months.

0:21:250:21:29

Being an experienced developer, Aziz did his homework with this house.

0:21:300:21:34

He read the legal pack before the auction, which was just as well,

0:21:340:21:37

because there was a potential fly in the ointment for anyone who wasn't prepared.

0:21:370:21:43

It was cash buyers only.

0:21:440:21:47

# Stop acting like the fly in my ointment

0:21:470:21:51

# Cos that's what you are... #

0:21:510:21:53

The reason he had to pay cash was because the property had only

0:21:530:21:58

been bought very recently and then offered straight back for sale.

0:21:580:22:01

This is known as a back-to-back sale

0:22:010:22:05

and mortgages are not available in these situations.

0:22:050:22:08

Like I always say, it really pays to do your research.

0:22:080:22:12

What do you intend doing here, to really get the most out of a house like this?

0:22:140:22:18

Relocate the bathroom, do the kitchen up again,

0:22:180:22:21

tile it and redecorate it, new carpets, obviously.

0:22:210:22:25

So let's talk about that bathroom.

0:22:250:22:28

You've got a really big bathroom, a very small shower room

0:22:280:22:31

and, currently, only two bedrooms.

0:22:310:22:33

Now, in the auction catalogue, it said "two or three bedrooms".

0:22:330:22:37

How are you going to turn that around?

0:22:370:22:39

Well, we're going to take the bathroom where it is

0:22:390:22:41

at the moment into the smaller room, where the shower cubicle is.

0:22:410:22:45

It's a waste of space, to me.

0:22:450:22:46

For my returns, the bathroom has to be the smaller one.

0:22:460:22:50

We'll get the shower in there, we'll get the bath in there,

0:22:500:22:52

we'll get the wash basin and the WC - the lot - in there.

0:22:520:22:55

And the current bathroom will become a third bedroom.

0:22:550:22:58

And downstairs, how will you change the kitchen around?

0:22:580:23:00

The kitchen is coming out, new kitchen is going in. This will become a kitchen-cum-diner.

0:23:000:23:04

The kitchen is concentrating, basically, on that window there

0:23:040:23:08

along there and all this will be taken out and dining table in here.

0:23:080:23:12

So do you think this is a really rentable house, it'll go like that?

0:23:120:23:15

Oh, it is. I've already got two potential tenants for it.

0:23:150:23:18

-Really?

-Yep.

-So what's your budget for the work here?

-About five grand.

0:23:180:23:22

-So you can turn this around with five grand?

-About £5,000, yes.

0:23:220:23:25

And have you got a team of builders?

0:23:250:23:27

I've got a team of workmen who work with me all the time, very closely.

0:23:270:23:31

For the last nine months they've been working with me.

0:23:310:23:33

We'll turn it around, with that money, in about four weeks.

0:23:330:23:38

Aziz might be very experienced, but turning this place around

0:23:380:23:42

in just a few weeks, on such a small budget, is going to be tough.

0:23:420:23:46

But he seems more than capable of getting the job done.

0:23:460:23:49

What is it about you that keeps you striving forward?

0:23:520:23:55

It's the passion about it.

0:23:550:23:57

I just love doing something, meeting new people. Like the properties.

0:23:570:24:01

I don't know whether it's in my blood or not, but I just like 'em,

0:24:010:24:04

like doing them and I like to get out and do something, rather than sit on my laurels and do nothing.

0:24:040:24:10

Aziz, I can't wait to see what you do. Congratulations. Well done.

0:24:100:24:14

Thank you very much.

0:24:140:24:15

Aziz has been property-developing for quite a while now

0:24:200:24:23

and he seems to have everything under control,

0:24:230:24:27

and he's well on his way to building up a nice rental portfolio.

0:24:270:24:31

But will he really be able to get this done in four weeks for just five grand?

0:24:310:24:36

After all, he's switching bathrooms for bedrooms

0:24:360:24:39

and turning showers into baths.

0:24:390:24:41

That's a lot of plumbing to sort out!

0:24:410:24:43

Will he do it? Find out later on in the programme.

0:24:430:24:47

Coming up. This Doncaster terrace needs major work, in the bedrooms,

0:24:480:24:52

the bathroom and the kitchen, as you can see, is in a right old state.

0:24:520:24:57

We return to Derby, where Aziz has found extra work.

0:24:580:25:04

I wasn't very happy with the wiring, so I took it out and rewired it.

0:25:040:25:08

But first, it's back to Canterbury, where the mountain air has been most refreshing.

0:25:100:25:16

We're very pleased with the way it's all turned out.

0:25:160:25:18

We're now returning to Canterbury in Kent where, earlier in the programme,

0:25:200:25:26

local full-time property developers, Ronnie and his wife Catherine,

0:25:260:25:30

bought this two-bed end-of-terrace for £147,000.

0:25:300:25:35

The deceptively large house was in a right old state.

0:25:370:25:40

The couple plan to add it to their portfolio of student lets.

0:25:400:25:45

And Ronnie soon discovered that the place had mountains of potential.

0:25:470:25:52

I looked at the spec and I thought, "That's only going to be for four students."

0:25:520:25:56

Then upstairs, I looked and saw the bathroom and thought, "Why does this have to be a bathroom?"

0:25:560:26:00

So it's going to be a very spacious student property.

0:26:000:26:03

But a six-bedroom one, so a bit of a money-spinner?

0:26:030:26:06

The numbers might drop, but on current status, it would be about 28,000 a year.

0:26:060:26:13

It's now four months later and we're back.

0:26:130:26:17

Inside, the dry rot in the bay window has been fixed and new joists

0:26:240:26:28

and floorboards installed, and the first of six bedrooms created.

0:26:280:26:34

The large through-living room has been bricked up

0:26:340:26:37

and bedroom two has been constructed.

0:26:370:26:41

The wall has been removed, so access to the kitchen is now through the hall.

0:26:410:26:45

That damp kitchen has been completely refitted with new appliances and units.

0:26:450:26:52

There's just the ceiling to plaster.

0:26:550:26:58

So, two bedrooms on the ground floor and four more on the first floor.

0:27:000:27:04

OK, so as you might remember,

0:27:040:27:07

this is the original door which went through to the second bedroom.

0:27:070:27:10

That was the one that had the big alpine fresco on the wall.

0:27:100:27:14

So now it's a shower room with a WC.

0:27:140:27:17

Then what we did, we opened up here and put in a bathroom

0:27:170:27:21

so we've got a bath/shower over.

0:27:210:27:24

So now you have the two shower facilities that you need.

0:27:240:27:27

Then we opened up this area here.

0:27:270:27:30

So we took this wall back

0:27:300:27:32

and created a corridor through into this bedroom.

0:27:320:27:35

So that's one bedroom upstairs and then the large front bedroom

0:27:360:27:41

has been split into two further bedrooms.

0:27:410:27:45

The original bathroom takes the bedroom count

0:27:450:27:48

to four upstairs, plus two downstairs, making a total of six.

0:27:480:27:52

We're very pleased with the way it's all turned out.

0:27:520:27:55

The outside presented just as many challenges.

0:27:550:27:59

So how have Ronnie and Catherine divided up the work here?

0:28:010:28:05

Ronnie spent more time here than me

0:28:050:28:08

when it was in the middle of the project.

0:28:080:28:11

I started off doing a lot of the wallpaper-stripping.

0:28:110:28:15

That was my contribution at the beginning of the project.

0:28:150:28:19

And then, towards the end of the project,

0:28:190:28:21

I organised all of the furniture and the decor.

0:28:210:28:26

And what about the basement? Were they able to create a communal room?

0:28:260:28:31

There sure were and the new window lets in lots of daylight.

0:28:330:28:36

So the first thing we had to do was to tank it.

0:28:380:28:42

Then we put a stub wall, with a cavity behind that and insulated the stub wall.

0:28:420:28:46

Had to build a new set of stairs so I built those in situ.

0:28:460:28:50

The biggest challenge, of course, though, was actually raising the ceiling.

0:28:500:28:54

One choice was to dig down, which didn't appeal at all.

0:28:540:28:56

So we just had to raise the ceiling up and that's worked brilliantly well.

0:28:560:29:00

Really nice space. I really like it. It's my favourite room in the whole house.

0:29:000:29:03

You can see the extra height Ronnie gained in the cellar

0:29:030:29:07

in the hall, where the floor has been raised.

0:29:070:29:10

Apart from building the staircase,

0:29:100:29:12

Ronnie's done a lot of the other work himself, too.

0:29:120:29:15

But he employed a certified gas-fitter and electrician

0:29:150:29:19

and took on an apprentice, called Louie.

0:29:190:29:22

They set a budget of around £25,000.

0:29:220:29:24

Did they manage to stick to that?

0:29:240:29:27

Er, we've come in at around about 24,000, which was really quite remarkable,

0:29:270:29:31

you know, because I was expecting to have to spend more.

0:29:310:29:35

And I have to say that's largely due to my apprentice

0:29:350:29:37

doing the skirting boards and the architraves and hanging the doors.

0:29:370:29:40

He's made a big difference to the project.

0:29:400:29:43

It's been a successful, fast turnaround project for the couple.

0:29:430:29:46

They've let all six rooms in time for the start of the new university term.

0:29:460:29:53

Moneywise, including their £24,000 budget,

0:29:530:29:56

they've spent a total of around 171,000 here.

0:29:560:29:59

But how have their improvements impacted on its value?

0:30:020:30:05

Let's see what two local estate agents think.

0:30:080:30:10

I think they've reconfigured the space very well

0:30:120:30:16

and there's no tiny rooms.

0:30:160:30:18

They're all a very good size and the lounge works very well.

0:30:180:30:21

They've made very good use of the floor plan.

0:30:210:30:24

This was always a good-sized house

0:30:240:30:26

and they've been able to adapt the layout to provide good accommodation,

0:30:260:30:30

ideal for the purpose that it's intended.

0:30:300:30:32

How much rental income could each room achieve,

0:30:320:30:36

if let out to students?

0:30:360:30:38

Student rents here in Canterbury

0:30:380:30:41

are between £330 and £350 per person, per month.

0:30:410:30:47

If I was to rent the property out to students,

0:30:470:30:50

it would be £350 per student, per room, per month.

0:30:500:30:53

That's an income of around £2,000 a month and a yield of 13-14%,

0:30:530:30:58

if they let the six rooms out all year round.

0:30:580:31:03

What do they think of that?

0:31:030:31:04

Well, I think we've achieved a bit better than that and I think

0:31:040:31:07

-they're slightly sort of undervalued, actually, from our experience.

-Mm.

0:31:070:31:11

They spent £147,000 at auction

0:31:130:31:15

and the budget's come in at around 24,000, making 171,000 in total.

0:31:150:31:21

So what's the property now worth,

0:31:210:31:24

as a six-bedroom, student, buy-to-let investment?

0:31:240:31:28

The market value here would be greatest as an investment to the

0:31:300:31:33

buy-to-let student landlords, where the value would be towards £250,000.

0:31:330:31:37

I'd market this property today as a student let for 265,000 to 270,000.

0:31:370:31:44

That valuation range of 250 to 270,000 would generate

0:31:440:31:49

a gross profit, before the usual selling expenses, of between 79 and £99,000.

0:31:490:31:54

What do they think of that?

0:31:540:31:57

I was sort of thinking in excess of 200, but 250-plus is very good.

0:31:570:32:02

Would they perhaps consider selling and taking an instant profit?

0:32:050:32:09

Well, I think we might think about it!

0:32:090:32:12

Yes. I don't know, it is tempting.

0:32:120:32:14

Makes all the labour worthwhile.

0:32:140:32:16

These last four months have been worth it.

0:32:160:32:19

Well, it would certainly come in handy, since they're currently planning a renovation

0:32:190:32:23

and extension of their own family home, including a swimming pool.

0:32:230:32:27

So how many pools could you buy with that?

0:32:290:32:31

-Just the one will be fine.

-Yes.

0:32:330:32:36

Today, I'm in Hexthorpe, in Doncaster.

0:32:400:32:43

There are plenty of local amenities and rows and rows

0:32:430:32:46

of affordable Victorian houses that look perfect for rental.

0:32:460:32:51

Well, the property market may have its ups and downs but

0:32:530:32:57

there's one thing that never changes and that's the importance of yield.

0:32:570:33:02

That is the amount of money you have to spend on a place

0:33:020:33:05

and what you might get back, in terms of rent.

0:33:050:33:07

And, in that case, this place is absolutely brilliant!

0:33:070:33:10

It may not look that inspiring from the outside

0:33:100:33:12

but the guide price was 20,000 quid.

0:33:120:33:15

I don't really care what it's like inside.

0:33:150:33:18

# Oh, honey, I don't care

0:33:180:33:20

# Oh, honey, I don't care... #

0:33:220:33:25

When the guide price is that low,

0:33:250:33:28

there's potential for a good yield to be harvested as a buy-to-let.

0:33:280:33:31

I'd be interested whatever the state of this place.

0:33:310:33:36

That said, what is on offer? Well, a very pink hallway, that's for sure.

0:33:360:33:40

But, oh, look! We've even got some lovely original features, that's nice to have.

0:33:400:33:44

When you set your sights low, you can be pleasantly surprised.

0:33:440:33:46

And, you know what, this place is not at all bad.

0:33:460:33:48

I've been in a lot worse that have cost a lot more money.

0:33:480:33:51

Big through sort of living room/dining room area.

0:33:510:33:55

Obviously, we're going to have to sort out something to do with the central heating,

0:33:550:33:59

but a couple of fireplaces in here make it really nice.

0:33:590:34:01

It feels pretty spacious.

0:34:010:34:03

Heading back towards the rear of the property, it gets a bit strange.

0:34:030:34:07

A little anteroom there. That could be the place where you have your washing machine or whatever.

0:34:070:34:11

And the kitchen, as you can see, is in a right old state.

0:34:110:34:14

And, sadly, it doesn't get much better upstairs,

0:34:140:34:17

because there isn't actually a bathroom.

0:34:170:34:19

Well, there's a bathROOM, as in, the room the bath would go in.

0:34:190:34:22

It doesn't actually have a bath in it at the moment.

0:34:220:34:24

But do I care? No, I don't!

0:34:240:34:26

You spend, what, 2,000 quid on a kitchen, £1,000 on the bathroom,

0:34:260:34:29

sort out the electrics, sort out the central heating.

0:34:290:34:33

You'd still have this whole place sorted out for 30,000 quid. Pfft!

0:34:330:34:37

Brilliant!

0:34:370:34:38

Of course, that's if you bought it bang on that £20,000 guide price.

0:34:390:34:44

But it would be a lot of house for not a lot of money.

0:34:440:34:48

So, up the pink staircase to the pink landing and into the, er,

0:34:480:34:53

green bathroom, minus the bath.

0:34:530:34:55

The toilet looks bereft.

0:34:550:34:57

Wouldn't it be great if I could find the bath

0:34:570:34:59

and restore it to its rightful place?

0:34:590:35:02

Well, yippee, because I've found it!

0:35:020:35:05

The toilet will be happy and the new owner will be, too.

0:35:050:35:08

You could easily reinstate this once you've repaired the hole in the floor...

0:35:080:35:12

but would you, really?

0:35:120:35:14

Both bedrooms are good sizes, although the ceilings do look as if they've had some water damage.

0:35:140:35:19

A slipped roof tile may have caused this, so rectifying that would be my first job.

0:35:190:35:24

Well, at the rear of the property under the explosion of buddleia,

0:35:240:35:28

there is actually a pretty decent-sized garden

0:35:280:35:31

and a weekend's work out here, I think, will make a massive amount of difference.

0:35:310:35:34

And, another bonus, there's a garage.

0:35:340:35:36

# I just haven't met you yet... #

0:35:360:35:39

No, there really IS a garage down there.

0:35:390:35:42

Look hard enough and you can just make it out.

0:35:420:35:45

The new owner also benefits from side access to the back garden.

0:35:470:35:51

Apparently all the houses along here have keys for this shared gate

0:35:510:35:55

and pathway that leads to the back of the terrace.

0:35:550:35:58

It will certainly make clearing the house and renovating it much easier.

0:35:580:36:02

Dragging materials through a property is far from ideal,

0:36:020:36:05

so having this side entrance will make those problems disappear.

0:36:050:36:10

So, what will a local estate agent make of this place,

0:36:100:36:14

with its guide price of only £20,000?

0:36:140:36:17

We asked one along to find out.

0:36:170:36:20

It needs a bit of work inside.

0:36:200:36:22

It needs a new kitchen, bathroom, boiler, windows.

0:36:220:36:26

So it's a proper refurbishment job.

0:36:260:36:28

Lots of potential in this area.

0:36:280:36:30

It's a very good rental market area and first-time buyers.

0:36:300:36:33

Let's talk figures.

0:36:330:36:36

I would be able to rent this out for £325 per calendar month,

0:36:360:36:40

to £375 per calendar month.

0:36:400:36:44

When renovated, I would look to market this property at £64,950.

0:36:440:36:50

Well, yes, there is a hole in the bathroom floor.

0:36:510:36:55

Yes, it needs a complete new kitchen.

0:36:550:36:57

Yes, the whole house is desperately in need of some tender loving care.

0:36:570:37:01

But, you know what, for that guide price of just 20,000 quid,

0:37:010:37:03

you can't go wrong, really, can you?

0:37:030:37:05

Let's see who bought it at the auction.

0:37:050:37:07

Lot number 18. This has caused some interest, for obvious reasons.

0:37:070:37:11

As you can see, two bedrooms, bathroom.

0:37:110:37:13

Needs some modernisation. Who's going to start me?

0:37:130:37:16

And what's that, sir? 316,000?

0:37:160:37:20

Jolly good! Where do you want to start?

0:37:200:37:22

20,000, that's fair enough. At £20,000, I'm bid.

0:37:220:37:26

21, 22, 23,

0:37:260:37:28

24, 25, 26,

0:37:280:37:31

27, 28, 29,

0:37:310:37:33

30,000?

0:37:330:37:35

30,000. 31?

0:37:350:37:36

32, 33,

0:37:360:37:39

34,000.

0:37:390:37:41

35,000, just round the corner. 36,000?

0:37:410:37:45

37,500?

0:37:450:37:47

Is it 38?

0:37:470:37:50

500, sir?

0:37:500:37:52

500? 38,500?

0:37:520:37:54

39. 500?

0:37:540:37:57

40,000. 500?

0:37:570:38:00

41,000? Bear with us.

0:38:000:38:02

41,500?

0:38:020:38:05

42,000. 500?

0:38:050:38:07

43 now. 500?

0:38:070:38:10

43,500. Is it 44 now? I'm losing my way.

0:38:100:38:13

At 43,500 for the first time...

0:38:130:38:16

Second...

0:38:160:38:17

Third and last time, any more bids?

0:38:170:38:19

TAPS GAVEL

0:38:190:38:21

Well done. Thank you very much.

0:38:210:38:23

Pleased as punch with their successful bid of £43,500,

0:38:230:38:27

over double the auction guide price,

0:38:270:38:30

are husband and wife, Joanne and John.

0:38:300:38:32

Joanne's a full-time mum and John's a self-employed electrician

0:38:340:38:37

which will come in handy in this property.

0:38:370:38:40

I met them back there to find out their plans.

0:38:400:38:44

-John, Joanne, good to meet you both. Congratulations.

-Thank you.

0:38:440:38:48

So, how about the auction, because you were very excited, weren't you?

0:38:480:38:51

-Yeah. It was brilliant, wasn't it?

-Yeah, it were really good, yeah.

0:38:510:38:54

I didn't expect it to be like that.

0:38:540:38:57

We didn't think, really, that we'd get it, did we?

0:38:570:38:59

No, we knew that there was going to be a lot of people bidding because of, obviously, the price.

0:38:590:39:03

-When we got it, it were a nice surprise.

-Yeah.

0:39:030:39:05

Paid more than what we thought we was going to do, though.

0:39:050:39:08

-We said about 38, didn't we?

-Yeah.

0:39:080:39:11

But Jo kept nudging me!

0:39:110:39:12

We just... I kept nudging him!

0:39:120:39:15

So tell me why you wanted to buy this place.

0:39:150:39:18

Erm, for an investment, really. We bought it to rent, basically.

0:39:180:39:23

-Is this anything like you've done before?

-No.

-No, never.

0:39:230:39:26

-First time, isn't it?

-Yeah.

0:39:260:39:28

So why this house particularly?

0:39:280:39:30

-Erm...

-It was going really cheap!

0:39:300:39:32

Well, you know, that's a good reason!

0:39:320:39:34

-Pretty much, wasn't it?

-Yeah.

0:39:340:39:35

Before you bought it, did you come to see it, hopefully?

0:39:350:39:39

-I didn't.

-Ooh! OK.

0:39:390:39:41

-But you did.

-Yeah, I came round with the estate agent.

0:39:410:39:43

They had an open day. There were a few others having a look round.

0:39:430:39:47

-Bit of a poke about?

-Yeah, that's it.

-And what about the legal pack?

0:39:470:39:50

CLEARS THROAT

0:39:500:39:51

Legal pack?

0:39:510:39:52

Clearing of throat usually means "Hm?"

0:39:520:39:55

Erm, well, we didn't do anything legal until we actually bought it.

0:39:550:40:00

-Got a bit of a telling-off from the solicitor.

-Yeah.

0:40:000:40:02

-Good!

-JOANNE LAUGHS

0:40:020:40:05

-Yeah, we didn't do any searches or surveys or anything, did we?

-No.

0:40:050:40:08

I mean, I came round and had a good look.

0:40:080:40:10

-Had a bit of a stamp around floors.

-Right.

0:40:100:40:12

Had a look outside front road.

0:40:120:40:14

-Structurally, it looks all right, don't it?

-Yeah.

0:40:140:40:16

Right. But that's not quite legal stuff, is it?

0:40:160:40:18

It could have had all sorts of covenants and all sorts of issues.

0:40:180:40:21

I mean, you wouldn't know that from stomping about, would you?

0:40:210:40:24

No, you wouldn't, and that's why solicitor sort of had a go at us.

0:40:240:40:27

-It is, yeah.

-Did he? You got told off by your solicitor?

0:40:270:40:30

-We did, yeah, so we'll know next time, won't we?

-Yeah.

0:40:300:40:32

# My whole world is falling down... #

0:40:320:40:35

I hope the couple have learned their lesson.

0:40:350:40:38

Things could have been a whole lot worse than a ticking-off from a solicitor.

0:40:380:40:42

But it sounds like their plans for the rest of the house are right on track.

0:40:420:40:46

So tell me what you're going to do to sort it out.

0:40:480:40:51

-New flooring downstairs.

-Yeah, laminate, probably.

0:40:510:40:54

-Carpets upstairs.

-New kitchen, new bathroom.

0:40:540:40:58

-Wiring, rewiring.

-Yeah, that's your forte.

0:40:580:41:00

-Plumbing.

-Yeah.

0:41:000:41:02

Pretty much everything.

0:41:020:41:04

Bit of tiling. Maybe try and fit a kitchen.

0:41:040:41:07

-Then see if we can reach those ceilings upstairs. They are about ten-foot high!

-I know!

0:41:070:41:10

Never mind those ceilings, John.

0:41:120:41:14

That HOLEY bathroom's praying for salvation!

0:41:140:41:19

John's trade as an electrician will be a huge bonus,

0:41:190:41:22

but what about Joanne?

0:41:220:41:24

I'll be the decorator's lad!

0:41:240:41:27

-The handyman.

-I'll be the handyman.

0:41:270:41:29

-Apprentice.

-Yeah.

0:41:290:41:31

-And what's the budget for the work?

-Probably about four to five.

0:41:310:41:34

Somewhere around that, hopefully. Try and come in under that.

0:41:340:41:38

Wow! That's quite a tight.

0:41:380:41:40

Do you think? Well, you're the sparky, aren't ya?

0:41:400:41:43

Well, that don't mean I'm good with money!

0:41:430:41:46

I was going to say, that'll save us a few, won't it, the rewiring?

0:41:460:41:49

Well, hopefully that'll save us about 1,500, 2,000.

0:41:490:41:52

Got a few friends in t'trade, plumbers, things like that,

0:41:520:41:55

so if we bribe them a bit, a few cups of tea...

0:41:550:41:58

I'd stock up on the teabags, as I can see weeks of tea-drinking for the tradesmen.

0:41:580:42:03

John and Joanne expect it will take three to four months to renovate this property.

0:42:060:42:10

I think it will take them at least that.

0:42:100:42:13

-Well, congratulations and good luck with it.

-Thank you.

0:42:140:42:18

-I look forward to seeing how you get on.

-Thank you.

0:42:180:42:21

Well, I know John's an electrician

0:42:210:42:24

but £4-£5,000 budget to sort this place out seems a little tight to me.

0:42:240:42:29

Still, he's got a very willing helper in Joanne.

0:42:290:42:32

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

0:42:320:42:36

Well, it's a while since we saw those properties.

0:42:380:42:41

Have our buyers been racing ahead with the work?

0:42:410:42:44

Or has it all come to a complete halt? Let us go back and find out.

0:42:440:42:48

Back now to Alvaston in Derby, where earlier in the programme,

0:42:500:42:54

this semi, tucked away in the corner,

0:42:540:42:57

was bought for £54,500 by Aziz,

0:42:570:42:59

a property developer based in Birmingham.

0:42:590:43:02

The house had two bedrooms and the potential to create a third.

0:43:030:43:09

Now, you've got a really big bathroom,

0:43:100:43:13

a very small shower room and, currently, only two bedrooms.

0:43:130:43:16

Now, in the auction catalogue, it said "two or three bedrooms".

0:43:160:43:19

How are you going to turn that around?

0:43:190:43:21

Well, we're going to take the bathroom, where it is at the moment, into the small room,

0:43:210:43:26

where the shower cubicle is, and the current bathroom will become a third bedroom.

0:43:260:43:31

Aziz had a team of builders standing by

0:43:310:43:33

and planned to have the work done in just four weeks.

0:43:330:43:37

Well, it was seven weeks later when we met up again with him.

0:43:420:43:45

At the front, the overgrown weed-filled entrance has now been cleared.

0:43:500:43:54

New gravel has gone down and the house looks much more inviting.

0:43:540:43:59

Round the back, the big, overgrown garden has been cleared.

0:43:590:44:02

And a new patio door has been installed.

0:44:100:44:13

Inside, the hall's been decorated.

0:44:130:44:16

The red carpet has gone from the first living room,

0:44:180:44:21

which has been neutrally decorated, but it has kept the wooden ceiling.

0:44:210:44:25

The fireplace remains in the second living room,

0:44:250:44:28

but it's gained a new patio door and been re-carpeted.

0:44:280:44:32

And the kitchen's been totally refitted.

0:44:370:44:41

Aziz is on hand to give us the tour.

0:44:410:44:43

Hi. This is the kitchen. Taken the old kitchen out, completely.

0:44:450:44:49

Put a new kitchen in.

0:44:490:44:51

Tiled the floors, smoke-alarmed it,

0:44:510:44:54

rewired the whole power circuit in this area.

0:44:540:44:58

Any family would love this kitchen, because it gives them

0:44:580:45:02

a good working surface and a lot of space for a dining area.

0:45:020:45:06

Perhaps the kitchen's not neutral enough to appeal to everyone,

0:45:060:45:10

but the property is now ready to rent out.

0:45:100:45:13

Upstairs, the two bedrooms have also been given a makeover.

0:45:130:45:17

And the former bathroom has been converted into bedroom three.

0:45:240:45:29

This is where the old bathroom was.

0:45:310:45:34

It was a challenge to take a bathroom out of there,

0:45:340:45:37

bring it into what was old shower area,

0:45:370:45:40

but we managed it.

0:45:400:45:42

It's a lovely bathroom.

0:45:420:45:43

Fully tiled floor, fully tiled walls and a bonus -

0:45:430:45:48

there is a towel rail, as well.

0:45:480:45:50

Gave me an extra bedroom and now I can rent it as a three-bedroom.

0:45:500:45:53

# Things have changed... #

0:45:530:46:01

So, three bedrooms and one bathroom - much more practical.

0:46:010:46:05

Aziz has project-managed the work, inside and out.

0:46:050:46:07

He's now a full-time property developer,

0:46:070:46:10

but he used to teach electrical engineering and,

0:46:100:46:12

when he started to probe around, he got a shock!

0:46:120:46:16

Er, unexpectedly, we had to rewire the house.

0:46:190:46:22

I wasn't very happy with the wiring, so I took it out and rewired it.

0:46:220:46:26

Extra work, so how did that affect his budget?

0:46:260:46:31

I wanted to ideally spend under 6,000, but it just went over 6,000 - 6,200.

0:46:310:46:37

How long has the work taken?

0:46:370:46:39

I was aiming for four weeks, but we did it in three weeks.

0:46:390:46:43

Fast work!

0:46:430:46:44

So have the plans changed or is he still looking to let?

0:46:440:46:48

I want to keep this property and I have rented it,

0:46:480:46:51

and there is a family moving in on Monday.

0:46:510:46:54

Aziz has spent around £61,000 on this place,

0:46:540:46:58

including the £54,500 purchase price.

0:46:580:47:01

Time to see what two local estate agents think of the house,

0:47:030:47:06

now it has three bedrooms

0:47:060:47:08

and a tiny garden.

0:47:080:47:11

The property now is a blank canvas really for somebody to move in

0:47:110:47:13

and put their own mark onto it.

0:47:130:47:16

I think the creation of the third bedroom

0:47:160:47:18

-has proved invaluable.

-The layout changes

0:47:180:47:21

work for the property.

0:47:210:47:23

Maximising the amount of bedrooms certainly works in their favour.

0:47:230:47:26

And reducing the bathrooms from two to one is perfect.

0:47:260:47:30

The level of finish certainly isn't the best that I've seen.

0:47:300:47:33

However, it's adequate for a property at this price range.

0:47:330:47:37

Aziz has already got tenants, but what sort of income

0:47:370:47:40

do the estate agents think he should be achieving?

0:47:400:47:44

I would look to offer this property to let somewhere between

0:47:440:47:48

£435 per calendar month and £450 per calendar month.

0:47:480:47:52

Rental value, I think the property will receive

0:47:520:47:54

approximately £450 per calendar month.

0:47:540:47:57

Oh, I've beaten that handsomely!

0:47:570:47:59

675, I've rented it.

0:47:590:48:01

No wonder Aziz is happy.

0:48:010:48:04

675 a month will give him a remarkable yield of just over 13%.

0:48:040:48:11

But will the estate agents' resale valuations make him smile?

0:48:110:48:14

Remember, he has spent around £61,000 on this property,

0:48:140:48:18

which he's turned around in a matter of weeks.

0:48:180:48:23

Resale value here, I believe, would be no more than £80,000.

0:48:230:48:27

I would look to put this to the market at £74,000,

0:48:270:48:30

with a view to achieving £70,000.

0:48:300:48:32

That valuation range, from 70 to 80,000, could produce

0:48:320:48:36

a healthy potential gross profit for Aziz of between nine and £19,000,

0:48:360:48:42

minus the usual selling expenses.

0:48:420:48:45

What does he think of that?

0:48:450:48:47

That's not bad. I'm happy with that.

0:48:470:48:50

Yeah. For three weeks' work. Beating the bank!

0:48:500:48:53

# Things have changed... #

0:48:530:48:56

So a quick turnaround. Tenants in place and a happy Aziz.

0:48:580:49:03

What's next?

0:49:030:49:05

I've got two more projects straight after this, so we're getting

0:49:050:49:11

ourselves involved with that and I'll be at the auction next time, as well.

0:49:110:49:15

So, probably see you guys!

0:49:150:49:17

Well, we'll keep an eye out for you!

0:49:170:49:20

We're back in Hexthorpe, near Doncaster, in South Yorkshire

0:49:240:49:28

to see how self-employed electrician John and his wife Joanne got on with that classic red-brick terrace.

0:49:280:49:34

The two-bedroomed house had a few problems.

0:49:340:49:38

The damp patches on the ceilings pointed to a probable hole in the roof,

0:49:380:49:42

whereas the bathroom floor was...

0:49:420:49:45

mostly just a hole.

0:49:450:49:47

First-time developers John and Joanne bought the house as a buy-to-let.

0:49:470:49:52

But they started off their property adventure by breaking

0:49:520:49:55

one of the golden Homes Under The Hammer rules.

0:49:550:49:59

And what about the legal pack?

0:49:590:50:01

CLEARS THROAT Legal pack?

0:50:010:50:03

Clearing of throat usually means "Hm?"

0:50:030:50:05

We didn't do anything legal until we actually bought it.

0:50:050:50:08

-Got a telling-off from the solicitor.

-Yeah.

-Good!

0:50:080:50:12

John and Joanne paid £43,500 for the house

0:50:120:50:17

and had a budget of just £4-£5,000 to fix all the holes,

0:50:170:50:21

as well as redecorating.

0:50:210:50:23

They planned to rope in some friends and do as much as they could themselves.

0:50:230:50:28

They hoped to turn the place around in three to four months.

0:50:280:50:31

Well, we've come back 11 months later to see if the couple

0:50:310:50:34

have managed to resurrect this classic terraced house.

0:50:340:50:38

The rear garden dumping ground- cum-jungle has been cleared

0:50:430:50:48

and there are new double-glazed windows at the back.

0:50:480:50:50

But this project is far from finished.

0:50:500:50:53

Something tells me there's a story to tell here.

0:50:530:50:56

Yeah, we started doing things, chopping out floor sockets

0:50:560:50:59

and things like that.

0:50:590:51:02

We cleared the back garden.

0:51:020:51:03

We had a few kitchen companies coming round, didn't we?

0:51:030:51:06

-Yeah, we got some prices for kitchens.

-Yeah, bathroom.

0:51:060:51:10

And then what happened was, we had a lot of snow in December.

0:51:100:51:13

We couldn't get here for several weeks.

0:51:130:51:15

Once the snow had melted, we noticed that it had damaged

0:51:150:51:18

a lot of the roof at the front and the back.

0:51:180:51:20

A lot of the slates had come away.

0:51:200:51:22

And the melted water had come through. Caused a bit of damage.

0:51:220:51:25

We had insurance on the property.

0:51:250:51:27

With it being a vacant property,

0:51:270:51:29

-it were a slightly more expensive insurance premium.

-Yeah.

0:51:290:51:31

So we started the ball rolling with the insurance company

0:51:310:51:34

to claim for repairs to the roof.

0:51:340:51:37

Well, they basically said that

0:51:370:51:38

if we'd have read the small print on the insurance policy, we should

0:51:380:51:42

have had an extensive survey done on the property before we bought it,

0:51:420:51:45

-which we didn't because, initially, the roof looked OK from outside.

-Yeah.

0:51:450:51:49

So the insurance company wouldn't pay out for the repairs to the roof

0:51:490:51:54

and I couldn't do anything in the house until the roof were fixed.

0:51:540:51:58

I couldn't afford to repair the roof, because we hadn't budgeted for it.

0:51:580:52:01

-So we, kind of, were left in limbo.

-That's when it kind of all started.

0:52:010:52:06

# My whole world is falling down... #

0:52:060:52:09

So, with a tiny budget and now no insurance cover,

0:52:090:52:14

and a roof to repair, plus a house that was still in tatters,

0:52:140:52:17

John and Joanne discovered a lifeline, from the local council!

0:52:170:52:21

What it basically is, is that there's 21,000 people

0:52:210:52:27

on the waiting list, so the council were looking for properties like this

0:52:270:52:30

and what they do is, they'll give you a grant for up to £12,000.

0:52:300:52:33

And they will get their workers in. They've actually been now. They've took photographs.

0:52:330:52:38

So the council are going to take the property over.

0:52:380:52:41

-They're going to renovate it and then they'll put tenants in and pay us rent.

-Yeah.

0:52:410:52:46

All in all, I think we've come out quite well,

0:52:460:52:49

considering it were a bit of a disaster to start with.

0:52:490:52:52

We seem to have not done too bad, have we?

0:52:520:52:55

No kidding. John and Joanne have had a narrow escape.

0:52:550:52:58

If the council had not desperately needed rental properties in this area,

0:52:580:53:03

the entire financial burden for repairing this house would have fallen on their shoulders.

0:53:030:53:08

Now the council will spend up to £12,000 renovating the house

0:53:080:53:12

and then rent it on to one of their tenants for five years.

0:53:120:53:15

The council will charge 10%, to cover their costs, and pass on the rest of the rent to the couple.

0:53:150:53:21

But if there was ever a cautionary tale, it's this one.

0:53:210:53:24

-We try and keep cheerful about things.

-Yeah.

0:53:240:53:28

It's been quite, erm, at times, emotional.

0:53:280:53:31

It's been a bit distressing so, yeah, it's been a bit of a rollercoaster.

0:53:310:53:35

Hopefully, things will work out.

0:53:350:53:38

I hope so, too, Joanne.

0:53:380:53:40

And, with the house finally on the way to being mended,

0:53:400:53:43

the couple are now about to embark on a huge life change on the other side of the world,

0:53:430:53:47

which they've been considering for a few years.

0:53:470:53:50

We'll be leaving for Australia in about six weeks.

0:53:530:53:56

With a one-way ticket, hopefully, not to return.

0:53:560:53:59

And, hopefully, we don't have to come back and sort this place out.

0:53:590:54:02

-Yeah, it's exciting, but it's also a bit daunting.

-It is a bit daunting, yeah.

0:54:020:54:07

Well, it's a long way to go,

0:54:070:54:10

but John hopes he'll find more work opportunities

0:54:100:54:13

in the Australian building market for his electrical skills.

0:54:130:54:16

Talk about the highs and lows of property developing.

0:54:160:54:20

This has definitely been a rollercoaster ride for John and Joanne.

0:54:200:54:24

They bought the house for £43,500

0:54:240:54:27

and have spent £2,500 so far on the renovations,

0:54:270:54:31

bringing their total spend to £46,000.

0:54:310:54:34

Time to find out what two local property experts think of the house.

0:54:380:54:43

Positives about the property?

0:54:430:54:45

It's got potential to be a good family home,

0:54:450:54:48

once it's renovated, but there's a long way to go.

0:54:480:54:51

This property still needs a lot of work.

0:54:520:54:55

In this current market, it is only

0:54:550:54:57

aimed at investors.

0:54:570:54:59

So, if the house was refurbished,

0:55:010:55:03

what could it make on the resale market?

0:55:030:55:05

Remember, their total outlay here is £46,000

0:55:050:55:08

and the council are footing the bill, up to £12,000, for the renovations,

0:55:080:55:12

to bring it back into the housing stock.

0:55:120:55:15

On the market, a good two-bed mid-terrace is fetching

0:55:170:55:21

in the region of £60,000, to the maximum of £65,000.

0:55:210:55:26

I would anticipate this property achieving, fully renovated,

0:55:260:55:30

in the region of £60,000.

0:55:300:55:32

Those valuations would give John and Joanne a profit of between

0:55:320:55:37

14 and £19,000, before costs and expenses.

0:55:370:55:40

Although, of course, they are tied into a rental deal with

0:55:400:55:44

the council for the next five years.

0:55:440:55:47

I think that's what the going rate is around here, yeah.

0:55:470:55:50

Sounds about right for this area.

0:55:500:55:52

-Well, we're not selling it, are we?

-We're not going to sell it, no.

0:55:520:55:56

So what rent are they likely to get from the council?

0:55:560:55:59

They've sort of told us that, the kind of property in this area,

0:55:590:56:03

we should get about £400 a month.

0:56:030:56:05

Given the council get 10% of the rent, then the couple

0:56:050:56:09

would eventually get £360 a month, a yield of about 9%.

0:56:090:56:14

That's a light at the end of the tunnel that they really could do with right now.

0:56:140:56:20

So, as they embark on their new life in Australia,

0:56:200:56:24

what tips can they leave behind for us?

0:56:240:56:27

Things like older properties, where you've got old roofs, they may look fine,

0:56:270:56:31

it might be worth getting a survey done.

0:56:310:56:33

We didn't, you know, and it's caught up with us and bit us on t'bum.

0:56:330:56:37

-It has, yeah.

-But you never know until you try, do you?

0:56:370:56:40

-So at least we tried it.

-Yeah.

0:56:400:56:42

The world of property is never static or boring.

0:56:460:56:49

You need to know what you're doing and we hope we can help with that.

0:56:490:56:52

Yes, join us next time for more cautionary tales

0:56:520:56:55

and stories of success here on Homes Under The Hammer.

0:56:550:56:58

-See you then.

-Goodbye.

-Goodbye.

0:56:580:57:00

Subtitles by Red Bee Media Ltd

0:57:060:57:09

E-mail [email protected]

0:57:090:57:12

Martin Roberts and Lucy Alexander visit a large house in Canterbury, a spacious property in Derby, and an end of terrace in Doncaster. All of these properties have been sold at auction - find out who bought them and what they paid when they went under the hammer.