Episode 22 Homes Under the Hammer

Hello. If you want to buy property at an auction,

you have to do it at the right price,

-but that's not always easy to do.

-No.

How do you know if the market is rising or falling?

Well, one only way to find out what the demand is like

is to pop down to your local property auction.

Well, auctions are really exciting

and you can be easily tempted to buy.

But how to guarantee success? Well, do your homework first.

So let's find out which properties created a buzz on today's show.

There's lots to see in this Hartlepool property,

but keep your eyes peeled.

Look at that! I almost missed that.

You'll need more than a wet weekend to sort out this Chatham house.

Now this wallpaper, look, is actually so wet.

And in Blurton, Stoke-on-Trent,

there's a one bedroom flat that's rather compact.

But looking around, not in a bad state,

and a couple of quite nice features.

All of these properties went to auction,

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

-when they went under the hammer.

-Sold.

Today I'm in Hartlepool, in the north-east of England.

Formerly heavy on industry, such as steelmaking and boatbuilding.

The place fell into decline.

But, nowadays, the docks have been rejuvenated,

to create this incredible marina, with shops, restaurants,

it was also the host of the 2010 Tall Ships Race.

# Sail away, sail away, sail away... #

But lovely as this area is now, it is property that floats my boat.

Well, not far from the port

and walking distance from the town centre and railway station

is the property I'm here to see.

Two-bedroom mid-terrace, at a guide price of £25,000 plus,

let's take a look.

Looking at it at the front isn't all that encouraging.

It's got double glazing in the windows

that haven't been boarded up,

and a somewhat dated pebbledash finish.

But the most positive view is across the road,

where new houses have been built.

So perhaps this is an area that's going places.

# Cos we're going places

# Never thought we could... #

You pretty much know what to expect

in these kind of terraced properties.

Let's see if that's the case here.

Oh. Oh, no, maybe not.

Look at that coving. And the detailing.

Very grand, indeed. Gosh, fantastic.

But through from the entrance there into your rear living room area.

Not a bad sized space. The kitchen going off it, there.

Then through to your front living room.

Obviously it's been knocked through to create a really nice space.

The window is boarded up at the moment,

but take that off, replace it with glass

and lots of light coming in here.

Open fire, which is always good.

I would like to see some kind of a fire surround on that.

Look at that!

I almost missed that. What a fantastic ceiling rose!

It's the sort of thing you'd expect in a country house.

Not a little terrace in Hartlepool. Wow. Right then, change of plan.

A big fire surround, enough space for the invite for the local gentry

to their Christmas ball, absolutely superb.

But, joking aside, really nice original feature.

Through to the rear up of the property, not so original,

but in not bad nick. Your kitchen,

this is an extension to the property added on at a later stage.

It's not huge,

the layout is probably making the best use of space.

The units don't look too old,

but you probably want to think about replacing those,

and obviously do the window at the same time.

But, all in all, a little house with not delusions of grandeur,

but aspirations to it.

It's never going to be a country house

situated in the heart of Hartlepool, but period features are definitely

a bonus and something that tenants and particularly housebuyers like.

You may have noticed that there are no radiators or boiler here,

but they've just been removed for safekeeping, so, another bonus.

What does the rest of this property have to offer?

So upstairs and that's a bathroom, that's a nice surprise.

A really good size,

although I do not know what on earth is going on with this step.

As you can see, that is not good, at all

and it is a very bad trip hazard.

Maybe take out whatever this is to get that right,

because it really is not right at all.

But a good sized space, lots of light coming in again.

Being in the new extension.

Up a few more stairs, you've got your two bedrooms.

You know what, I can't resist it,

I have got to find out what this is like.

Oh, look at that.

Original and beautiful.

Are there any more hidden gems?

Well, no, not that I can see.

The two bedrooms are a good size,

and there are no complaints about the bathroom.

But there is quite a large amount of work to tackle

to get this place to step up to the mark, both inside and out.

Come out of the rear of the property

and you find yourself in this little courtyard.

Really nice and useful to have a bit of outside space.

It needs tidying up, but apart from that,

nothing particularly to worry about.

Here you can also see that the whole of the rear of the property

is, in fact, a fairly recently built extension.

You can see the difference in the bricks.

But I'm more concerned about a couple of things.

First of all, this. It's a wooden beam over the window.

That should actually be made of concrete or metal.

As you can see, if you look above it, there is a bit of a crack,

probably because this has started to rot and sink.

That's not good, because before long, the window will crack,

and eventually that'll fall down.

Another thing which could be causing all sorts of problems is this,

a classic case of a stitch in time saves nine, here.

What has happened is the downpipe has come off here,

and water, for whatever length of time, has been pouring down

from not only the roof but from these pipes,

from the sinks upstairs.

Down this wall, that's going to be damp and horrible.

It's probably going to have got into the kitchen

and it could even be affecting the foundations.

So that needs to be sorted out,

and so do the potential problems down there.

That's another thing to investigate.

And, generally, this back area is a little disappointing.

There is access at the rear, but the extension

has taken what little yard area there was,

making it less attractive as a resale option.

So, for me, it has got rental potential written all over it.

But what does a local estate agent make of this small house

with big aspirations?

It is typical for this area.

A terraced property, obviously this one is in poor condition,

and needs quite a lot of work doing to it.

It needs decorating, fully.

The double glazing seems to be OK,

but obviously some repairs need doing to that.

Yes, there is a fair amount of work

and it's in an area that, at present,

does not have a very high ceiling value.

So would it be worth investing the time and money on a house

which was guided at just £25,000 plus.

Once it's completely renovated,

I would suggest somewhere around the £45,000.

And rental?

Unfurnished, I would suggest

somewhere between £375-£400 per calendar month.

As I expected, it is not going to make a fortune on the resale market.

But as a rental property, it should work for you, all day long.

So who's going to take this small house with touches of grandeur

back to how it was in its glory days?

Let's go to the auction and find out.

Lot number 48 is a two bed mid-terrace property,

most windows do have the UPC frames.

The radiators and boilers are available but have been removed.

Who's going to start at 25?

I need 25 to go. 24?

I don't have 24?

One bidder, right at the back, at £24,000.

Thank you. 25?

25,000 bid. 26? 26's bid.

27? 27 bid. 28? Nope. £27,000.

I'll take 500.

£27,500 bid. 500 from you?

28?

28 bid. And a half?

The gentleman standing, your last chance,

I'm going to sell, right-hand side at £28,000.

Selling it once at 28.

Selling it for the second time, at £28,000.

Sold on the right-hand side at £28,000.

So for £28,000, just £3,000 over the guide price,

the new owner of the two bedroomed terraced property in Hartlepool

is local man, Colin.

He's an electrician by trade,

so I was intrigued to know what he plans to do with the place.

-Colin, good to meet you.

-Hi there, Andrew.

-Congratulations.

Tell me why you wanted to buy this place.

I was looking for an investment opportunity.

I've been looking on the market for some time.

I've actually tried to get into a couple of properties, to buy,

but I have always been outbid.

So when this one came up, it was my lucky day.

So you've bought it as an investment?

-Hopefully, yes. An investment.

-To do what with?

-To do up and sell or to keep?

-Hopefully I'm going to keep it and try to get on the rental market.

What experience have you got? Have you done anything like this before?

I have, albeit I am an electrician by trade.

I have done properties up with companies,

so I thought I would have a go myself. See how I can do it.

-Is this the first one?

-This is my first one.

Colin felt it was time to grasp the nettle and go for it himself.

He saw property development as a way to fill time

when his electrical business is less busy.

He also hopes it will provide some kind of pension provision.

So, the house itself, then, do you like it as it is?

Are you going to make any improvements? What is the plan?

I have had a quick look around,

and at the moment it is a two-bedroom property.

One of the front bedrooms is quite a big bedroom.

I think it has got the potential, if I put another wall in,

-to make it a three bedroom.

-Oh, right.

A lot of it just once decor. The kitchen is in quite a good state

It just wants tidying up a bit.

Basically, I'm going to put new flooring everywhere.

New bathroom, try and make that something to look at.

It has got some amazingly grand features for a little house.

Not least this incredible ceiling rose.

Yes, I'm going to leave that and try and make that into sort of feature

by painting it.

-Do you suppose it had a chandelier at some point?

-Possibly.

-It will do, I will probably put a chandelier into it.

-You will?

-Yes.

I love the idea of this little place having a chandelier.

Why shouldn't it? You know. Maybe a big fireplace, as well.

There is going to be a new fireplace surround going in.

Hopefully modernise it a little bit.

-Budget?

-I'm looking to spend approximately £3000-£5000.

I think £3000-£5000 as a budget is pretty tight.

Particularly if he goes with his plan to turn it

into a three-bedroom house.

He plans to finish the work in just two or three months.

So who's going to be doing the work?

Most of it will be mainly myself,

-but I have also got my nephew who is an apprentice plumber.

-Great.

Hopefully he is going to teach me and I am going to teach him a few tricks.

-We can both learn along the way.

-Has he been doing it for long?

He is just a young lad, a 17-year-old now,

so he is in the second year of his apprenticeship.

Hopefully, he will be able to learn a lot, as well as myself.

-A good bit of practical experience for him.

-It would be.

Great. Well, listen. Congratulations. Good luck with it.

-I look forward to seeing how you get on.

-Cheers, then. Thanks, now.

Well, I think Colin has got himself a good little property here,

but I am concerned about that budget.

£3000-£5000.

The thing is, when you start doing up houses,

there are always things you'll discover needing to be done.

You can find out if he manages to stick to it, later in the show.

Consistently ranked one of the most expensive cities in the world,

London's house prices are unaffordable for many.

So people are looking elsewhere when it comes to buying property.

Ever considered Chatham in Kent?

The average house price here is £160,000.

It takes over half an hour to travel into central London.

Worth considering, I'd say.

An annual rail ticket is over £3,000,

so you have to take that into account, but when you consider

you can buy a freehold two-bed house for the price

of a flat in London, Chatham starts to look very attractive indeed.

A short walk from the train station,

and I'm here to see a two-bedroom terraced property.

The guide? Just £65,000-£70,000.

It looks quite nice from the outside,

with this traditional old brick work, like an old cottage.

Let's see what it's like on the inside, though.

Well, sadly, it's not bursting with so much character on the inside.

No beautiful fireplace, artex ceiling.

It's quite small, but you'd expect that from a cottage.

A few little old details from the past. That's quite nice.

Second reception room.

Oh, dear.

Damp everywhere. Look at this.

Wallpaper just peeling off the walls.

An exposed bit of brickwork here,

but not of the type I would usually like to see.

Look at the state of that. Now this wallpaper is, actually, SO wet.

You can see the waterline along here. Not looking good.

Certainly get that looked at.

I'm just wondering where all this damp is coming from.

Let's hope the kitchen is a bit more promising.

No such luck. It's just as bad. Black mould and rotten wood work.

And as for the cooker, well, you'll need to get scrubbing.

# Grease is the word

# It's got groove It's got meaning... #

I'd like to get outside to the garden to check the roof,

but there's no key available for access.

I just hope whoever bought this was able to take a look.

So far, not so great in this house that was guided at £65-£70,000.

And upstairs it's more of the same.

In the front bedroom, the walls are so damp that the wallpaper

is removing itself.

And it looks like the skirting has made a bid for freedom, too.

Maybe they have made a pact to run away together.

MUSIC: "Je T'aime, Moi Non Plus" by Serge Gainsbourg

Couldn't blame them for wanting to escape the damp,

but there's no running away for me.

And here's bedroom number two.

Not a bad size, but when you take into account the amount of work they've got to do on this place,

I mean, it literally needs an overhaul.

You've got peeling wallpaper up here, as well,

and I'm still looking for that bathroom.

Found it!

Well, it's in a right old state.

On first glance, you would even think there could have been a fire

because it looks like fire damage, but it's not.

It's definitely signs of damp.

It really smells in here.

It's not even poor ventilation because you can see,

there's a fan, the window's open.

It doesn't feel too wet in here

and I'm looking for water coming through but I can't see any.

I would get out on to that roof as soon as possible

to check this place out.

My other concern is how is bedroom one, the other room,

going to access this bathroom?

Time to get the thinking cap on.

Because access to the only bathroom in the house

through a bedroom is far from ideal.

Well, I've thought of a solution.

What you've got to do is turn the stairs around.

If you put the stairs along this back wall here,

that means bedroom one will be able to go into the room,

walk along this little corridor here into the bathroom

and bedroom number two will also be able to access the bathroom.

So it makes both rooms independent,

both can use the bathroom, and that, I think, is the way forward.

We invited a local estate agent to come and look at the property

and get her advice about possible layout changes for the house.

What would she suggest?

The new owner has two options and it really depends

how much they want to spend.

You have the option of turning the staircase,

making a through lounge and altering the layout upstairs.

Or a cheaper option would be to sort of put a corridor in between

the two bedrooms so both have access to the bathroom.

And what about the damp in the kitchen and bathroom?

The kitchen needs some work. It needs a new kitchen, really.

The bathroom, the whole lot needs looking at

and perhaps the roof overhauling.

So after refurbishment works are completed,

how much rental income could the house generate?

We would be able to let this out at around £575 per calendar month,

maybe pushing it to £595 per calendar month.

And the resale value?

I think if you did the minimum to it,

then you are going to be looking round about the £100,000 mark.

There are damp issues that need addressing here,

the roof may need repairing or replacing

and the only upstairs bathroom isn't really working for me.

So some serious reconfiguring is required.

Let's see who fancied this challenge as we head to auction.

Lot 31. Stunning looking little property, there.

No big problems, I would think.

Just the two walls to worry about, front and back. Freehold.

Start me where you will. £65,000?

Not much for a house, freehold house with vacant possession. 65.

I'm on the way. And seven, now.

Do I see? 67, I am looking for.

Are we all done, 67? Second row back.

68, 69 and 70. And two. Any of you, three?

72, can I say? At 70 to the lady.

72, 74. 74, 76.

76, 76, and eight.

77, then?

Go on, you've kept with it all this time. 77. 77.

78. 78. 79? No, definitely not.

At 79 in a fresh place. At 80 now, sir.

80, may I say, on the right hand side.

At 80 bid, I have. And 82.

82, may I say? 81, if you like.

81, may I hear? 81 and two.

82.

82, 82 and three? No.

At £82,000 bid I have got. 83, I'm looking for.

Are we all done at £82,000 then I will sell?

All done for the first time, a second time,

third and final time at £82,000 on my right hand side.

82. And the number, please?

That successful bid of £82,000

was made by Becky on behalf of her mum, Francis.

Francis, here on the left, works full-time as a nurse in a care home.

Her daughter Becky is on hand to help with this property.

It's the third one Francis and her husband have bought at auction.

They have two other buy-to-lets in Wales.

I met Francis and Becky back at the house.

Girls, congratulations. Well done.

Tell me about the auction, Francis.

It was petrifying because there were so many people there.

I've been to actions before where, you know,

sometimes there's only a handful of people and you think,

"Great, you've got a chance here."

But with so many people there, I thought,

"Oh, gosh. We haven't got a chance of getting a property here."

But it seems they stood just as good a chance as anyone else.

In fact, Francis was interested in bidding on four different properties

but she made a bit of a boo-boo with this one.

When it came to viewing it before the auction,

she only got as far as the front door.

My husband and I came round.

We looked through the letterbox and actually,

the black in the kitchen, we thought it was a hole!

So in actual fact, that is good.

It was quite a nice surprise that it wasn't a hole.

So you didn't even look at this property before you bid for it?

-No.

-You just looked through the letterbox,

thought it was a black hole and you are quite relieved to see it's actually a kitchen.

# I'll never know what you find

# When you open up your letter box tomorrow... #

It may not be a black hole but the black is damp,

which could create a black hole in Francis' budget.

What did you think when you first viewed this poverty?

It's a little bit disappointing with all the black in the kitchen

but I don't know if that just looks worse than it is.

But I don't know, it's not as bad as they one you had in Wales.

The first one we had was really, really very, very damp.

So the damp didn't deter Francis.

She released equity from her two Welsh properties

to finance the purchase of this house.

And as if the damp issue wasn't enough, after the auction,

Francis discovered the house is in a potential flood risk area

so she had to take out insurance against flooding, her first expense.

Potential flooding could affect the resale value in future

but to start with, Francis is planning to rent this house out.

So what's the grand plan, here?

What do you intend to do with this house?

What I would like to do,

which is different to what my eldest daughter and my husband want to do,

they just want us to come in, paint it up, do a kitchen

and a bathroom and just rent it, but I would like to move the stairs

down to outside the kitchen,

to go up that way, so that it's one room.

That's what my idea is,

because otherwise, you've just got two tiny rooms.

And then it would be quite nice to put a smaller bathroom upstairs

and create a third bedroom somehow.

May not be able to do it but it would be nice.

I think that would be fantastic, if you can do that.

If your budget will allow it.

What sort of budget have you got for this property?

Well, I thought 8,000.

If, you know, if we can get it done in six months,

we might be able to get 8,000.

We might have to go to 10,000, I don't know.

If Francis goes ahead to remove a wall,

change the stairwell and create a corridor and extra bedroom,

she may find that budget just a little tight.

And she still needs to get to the bottom of that damp.

Have you had a chance to get outside and look up on the roof

and see where that damp is coming from?

No, because there's no key to the back door.

The front of the roof looks good

so I can't believe that the back is going to be that bad.

Well, fingers crossed.

At least the house does have central heating and double glazing.

And Francis has her family on hand to help.

Becky, how are you going to be involved in this?

I'm going to have a sledgehammer

and basically take the stairs down and whatever walls need to go.

-Together, we're good at demolishing things.

-We are quite good.

-Girls, good luck with this.

-Thank you.

-Thank you.

Well, I'm glad to say this investment property

is closer to home for Francis and she's got Becky

and the rest of the family to help her turn this place around.

I've got a few worries, however.

Will that roof blow the budget

and will the flood risk wash away any hope of a resale?

You can find out how the girls get on later in the programme.

Coming up, just how big is the flat in this Blurton block?

It might be a bit bigger if the corridors out there weren't so huge.

Back in Chatham, Becky's sledgehammer has come in handy.

She came down to help get the chimney breast down

and that was, you know, a big job.

But first, we return to Hartlepool

where Colin's had to tread carefully.

When we removed flooring, realised that some of it was rotten.

Earlier, we were in the north-east and seaport of Hartlepool,

were this two-bedroom mid-terrace house went on for auction.

It was bought for £28,000

by local man, Colin. He's an electrician and saw renovating this place

as a perfect time-filling project for when he was less busy on the electrical front.

I was looking more for an investment opportunity.

I've been looking on the market for some time.

I've actually tried to get into a couple of properties to buy,

but I've always been outbid.

-Right.

-So when this one came up, it was my lucky day.

I reckoned he had a good one here

because the house did have some lovely character features.

All it needed was cosmetic work

that Colin thought would only set him back £3,000 to £5,000.

We returned five months later to see if electrician Colin

had put the spark back into the place.

The boarded-up windows have gone,

and the lintel and stonework have been given a fresh new coat of paint.

Has Colin freshened up the inside?

I'd say so!

The two reception rooms have been redecorated with new flooring added.

Even with two new double doors separating the living

and dining areas, the room still feels spacious and light.

Colin has also added a fireplace which finishes off

the living room perfectly.

So, will that serviceable kitchen come up to standard?

We managed to hang on to the kitchen units,

which only needed a really good clean.

I've had to retile, all the electrics put in, cabinet lighting,

new ceiling lighting and a nice ceramic floor in,

which I'm really pleased about.

As they say, if it ain't broke, don't fix it.

But has anything been fixed upstairs?

With one eye on the rental market, Colin has gone ahead

and turned that large front bedroom into two new bedrooms.

One double and a single.

The rear bedroom has had a similar makeover

in the same neutral decor, all clean and fresh.

Let's hope it's the same for the bathroom.

So what we've done here, in the bathroom,

we've had a total refurb.

We've had a new bathroom suite fitted, new flooring,

and new tiling to two of the walls

and I'm really pleased with this room.

Well, there's a lot to be pleased about with the whole refurb

but it is not just about what has been added,

it's also great to see those attractive features

hauled back to life.

Colin did most of the work himself with help from the family

on the decorating side

and friends with some plastering and joinery work.

It's been a pain-free experience except for one small problem.

Downstairs in the rear dining room, when we actually started

to remove the flooring, we realise some of it had rotten

so we had to reinstate some of the floor joists

just to level the floor out.

But apart from that, no, it was easy going.

And though the rear yard still isn't anything to get excited about,

Colin has given the walls a lick of paint and fixed the dodgy drainpipe.

But he soon found that his time for the job was draining away, too.

It started off quite easy but then work picked up

so I had to fit it in and work weekends and evenings

just to push the project along.

Colin quickly found that his schedule had expanded

from three months to four-and-a-half, and the budget,

that £3,000 to £5,000 spend

was pushed to 6,000 due to the rotten joists in the dining room.

Add that six grand spend to his £28,000 purchase price,

and his total outlay so far is £34,000.

So, how does he intend to recoup the money?

Is the plan to rent it out as a long-term investment?

I've had interest where people want to rent the property,

but it depends if a buyer comes along and I get offered the right price.

And possibly, I would sell.

And that's a cue for two local estate agents

to come and see Colin's work and give us their thoughts

on this £34,000 investment.

I think he's done a good job. It's nice and bright.

What he's done has been presumably not too expensive

but it has made a difference to the property.

I think he's made some fairly significant improvements.

I quite like the flow of the house.

A couple of things I do like,

it is good to have an upstairs bathroom

off the half-landing and he has converted one of the big bedrooms

at the front into two bedrooms now, which always helps.

Has splitting that large bedroom affected the property's value?

Having divided the front bedroom into two hasn't greatly advanced

either the sale or rental value, it just makes it more appealing.

So how do the figures look? First as a rental.

I would estimate that this property would achieve

a rent of round about £450 per calendar month.

I would suggest a rental value of £450 per calendar month.

450 sounds good, if I can get that.

I think it is probably a little bit excessive

but if I could get that, I'd be quite pleased.

If those rental figures could be achieved,

Colin would be looking at a possible annual rental yield

of just under 16%.

Bearing in mind his total outlay of 34,000,

would selling it be more attractive?

I would recommend the vendor puts this on the market at £49,950,

with a view to achieving round about the £45,000 mark.

I would suggest it went on the market at £45,000.

Yeah, 45,000 is probably the top end I'd probably be looking for.

I'd also be quite pleased if I got 45,000.

That could give Colin a pre-tax profit of £11,000.

So, either way, there looks to be some money to be made here.

But for now, Colin aims to rent this house out,

until the resale market picks up.

He has a tenant lined up,

and will be charging £425 a month,

a fantastic yield of nearly 15%.

So, in all, it's not a bad start

on the renovation and money-making side of his first effort.

I'm really pleased. Quite happy with the way it's gone.

I've enjoyed working on the property.

If I can make some profit on it, it's a win/win situation.

I'm in Blurton, which literally means,

"village on a hill".

Once a small, rural community,

it's now more a suburb of nearby Stoke-on-Trent.

But still nestled in the beautiful Staffordshire countryside.

Distant views,

country walks, and hedgerows.

The property's actually located somewhere slightly less rural.

It's actually on the side of this fairly main road,

so traffic noise could be an issue.

In this block of flats, there's 30-odd one-bedroom flats,

and that's what was up for auction.

Had a guide price of 30,000 quid.

Oh, actually being by the side of the road maybe does have

one or two advantages.

Good transport links. Let's take a look inside.

The countryside on your doorstep, and yet only ten minutes' drive

to both the M6 and the centre of Stoke.

You certainly can't knock this location.

Even better news is there's off-street car parking

round the back,

where the main security door leading into the block is located.

So, up to the second floor.

A really important thing

when you're looking at buying a flat, particularly,

is to look at the communal areas.

Are they in reasonable condition.

You could end up paying to have them renovated if they're not.

In this case, they are.

I have to say, an absolutely massive staircase

and landing area, there.

But this is it.

So, how big is this one-bedroom flat?

It might be a bit bigger if the corridors out there weren't so huge.

Basically, it's all along here.

Bedroom, there. You have your kitchen here.

Then, working down this way,

bathroom needs a bit of tender loving care,

as does most of the flat, actually.

But it's not a bad size.

And then through to your living room.

It's very, well... compact.

But, looking around, not in a bad state.

And a couple of quite nice features.

Look at this fireplace. Marvellous.

This one-bedroom flat is in really good condition.

You can move in here as it is.

But if you spent just a little money,

the place could become a cracking home.

It's not the biggest one-bedroom flat I've seen,

but the layout is right, and there's certainly potential here.

A new kitchen and bathroom would really make a difference.

Replacing the single-glazing would help cut down the noise.

And, although all the windows look out across the road,

beyond that it's open countryside,

making quite a pleasant view.

We invited a local estate agent

to come and have a look at the flat

that was guided at £30,000,

and tell us more about the potential,

and how it might fit into the local property market.

The layout of the property is nicely compact,

and it's quite cosy - it's quite nice.

After a refurbishment -

maybe changing the bathroom and the kitchen -

how much could the flat be worth?

Once renovated, I believe that this property

will be worth £45,000.

And for a buy-to-let investor,

what rental income could it generate?

I believe this property would rent for £275 per calendar month.

I don't know what you think.

I think this one's a bit of a cracking property.

Realistic guide price. Good rental potential.

The flat doesn't need much doing to it. A great one to go for.

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

Lot 41. A second floor one-bedroom flat.

There's a communal parking area and garden.

So, lot 41.

What's this?

30 to start me?

25, then? Start me at 25, then, somebody.

25 bid, thank you.

At £25,000.

30 going to say? Bid's at £25,000.

Got you. £26,000.

At 27? 27.

28.

29. 30?

30.

31?

No? At £30,000. Thank you.

31.

32.

33, sir? 32.5.

33.

33.5.

34? No?

34, anywhere else?

34 with you, sir. First bid.

Another 500 anywhere else?

At £34,000, then, for the first time.

At 34,000,

for the second time.

Third and final time at £34,000. Are we all done?

You've all won. Well done.

That final, successful bid of 34,000

was made by Paul, who was at the auction

with his wife, Lynn.

Paul owns a kitchen and bathroom-fitting company.

he's also a part-time property developer,

and for this flat, he travelled some distance.

MUSIC: "A Long Way Home" by Dwight Yoakam.

I met up with him back at his new purchase,

to find out just what it was that appealed to him.

Paul, great to meet you!

-Congratulations.

-Hi, Martin.

Tell me why you wanted to buy the flat.

Primarily, I do buy properties at auction.

-This is my fifth property...

-Oh, great!

..no, sixth, actually. Sixth properties at auction

-You've had so many, you lose count.

-Yeah, that's it.

Primarily, we buy up north,

to get a better return.

-But don't live here?

-No.

-Where do you live?

-Maidenhead, in Berkshire.

-Good grief. So, quite a long trek away.

-Yes.

Is it that yield factor which has brought you up north?

It is, because - as you well know - the cost of properties in the south,

the return you get is nowhere near what you can get

-further north.

-Right. Give me an exact example?

Well, for what you're purchasing a property up here, I'd have to buy

four properties up here

for the price of a property in Maidenhead.

-So it's four times as much?

-Yeah.

-And you certainly wouldn't get four times as mush rent.

-Exactly.

Does it make managing properties a little more trick?

I'm quite lucky that I've got my own kitchen and bathroom business.

Oh, great.

But obviously, I don't come up here to do all of that.

I've got a couple of colleagues.

I've got an excellent carpenter and plumber.

And electricians, and the rest of the trades I've made contact with,

since I've been doing this.

In terms of managing the properties -

as well as restoring and renovating them -

do you have an agent locally? Is that how it works?

I use an agent for finding the tenants,

and after that look at looking after it ourselves.

My carpenter/plumber does all the maintenance work, as well.

I still do some of the work myself.

I'll come and strip the walls,

and stick a coat of paint on the walls and ceilings, etcetera.

But the main fitting of kitchens and bathrooms,

I leave to my colleague.

For long distance developer Paul,

flats are his main target.

He prefers them to houses, as he can usually obtain a better return

on the capital he's invested.

And there's often less work to do.

So, despite this flat being in pretty good condition,

will he and his colleague be giving it a spruce up?

So, what's the plan? What are you going to do?

Kitchen and bathroom both need doing.

This is the only ceiling that's got Artex on it.

So we'll skim that, strip the walls.

Undecided about the fireplace.

It's a bit unusual to have in a flat,

but it's a feature.

It's not my cup of tea,

but I think I may end up leaving it.

And then decorate throughout, so it's ready for renting.

Being in the trade, how much do you pay

for a bathroom and a kitchen?

-Some very good prices.

-Come on!

Spill the beans!

You know, Martin,

it's down to the context that you've got,

and whose arm you can twist.

So, if you twist somebody's arm particularly strongly,

how much will the bathroom and kitchen be?

This time of year, you could get some excellent deals.

I don't expect to pay more than £1,000

for the kitchen, including the appliances.

The bathroom?

Probably half that.

So, that's about £1,500 on a new kitchen and bathroom,

out of Paul's total budget of 5,000 to 6,000.

He plans to replace the windows from that budget, as well.

He set a timescale of six weeks

to get the place ready for rental.

I'm not going to be able to spend as much time up here,

so my colleague is going to be getting on with it,

and I'm going to pop up -

probably over some weekends-

to do some of the painting.

-Right. And then it's get a tenant in?

-That's it.

And build the portfolio - is that the plan?

Yes.

I'd like to get into double figures as soon as possible,

so back at the next auction.

Sticking to this area?

Yes, cos it gives a good return.

Ideally, I'd love to do it further south,

but the return just isn't there.

Good luck with that. Congratulations.

-Thank you, Martin.

-We'll see how you get on.

-Cheers.

Paul certainly seems to know

what he's doing with his property investments,

travelling all the way from the south to the north

to get this flat, and I can understand why.

How will he get on sorting it out?

He's got the expertise, and he's got a man who can,

so what could go wrong? Well, you never know.

You can find out later in the show.

It's always very expensive to put things off until tomorrow,

but time is money, and delays can be very expensive.

Have our buyers been busy, or have they let the grass grow

under their feet?

Let's find out.

We return now to Chatham, in Kent,

where earlier in the programme, Frances - a full-time nurse -

and her husband, Ron,

bought this very damp mid-terrace house

for £82,000.

It was their third investment property.

And Frances' daughter Becky, who is a teacher,

was going to lend a hand with the refurbishment.

They planned to rent it out when the work was finished.

What's the grand plan here? What do you intend to do

with this house?

What I would like to do, which is very different to what

my eldest and my husband want to do...

They just want us to come in,

paint it up, do the kitchen and the bathroom,

and just rent it.

I'd like to move the stairs

down to outside the kitchen, to go up that way,

so that it's one room.

They'd set a budget of 8,000 to 10,000,

and a timescale of six months.

Well, there must have been a delay,

because it's now almost 18 months later...

..when we meet up with Frances once more.

The house now has a smart, black front door,

but the original windows have been retained.

At the back of the house, the damp has been cured in the kitchen.

It's now a light room, with new units and appliances,

and where the damp was at its worst,

a new boiler has been installed.

At the front of the house, the dividing wall between the two rooms

has been removed, creating a large, open-plan living area.

They've taken out the chimney breasts from both rooms.

And the staircase has been relocated,

from between the two former reception rooms, to the side

of the open-plan living area.

It certainly looks as if they've followed Frances' plans.

Well, the stairs used to be here -

just sort of this space, really.

That was quite a small lounge.

And a bigger back room, actually.

And now, we've just put them here.

We've changed the layout upstairs.

Just moving the stairs, I think, has made a huge difference.

It has indeed,

because the layout upstairs has really benefitted, too.

The front bedroom is now accessed from a new landing.

The back bedroom is a little smaller,

to accommodate the new landing.

But the benefit is you can now reach the bathroom,

without having to go through the second bedroom.

And the new white suite looks great!

The black mould and damp, I was so worried about here,

and throughout the house,

turned out to be a condensation problem.

And, although it was at its worst in the bathroom,

it looked like it had caused problems everywhere.

I think in the bathroom it looked worse,

because there was no insulation in the roof.

So, if you had a hot bath,

the heat of the steam hit the roof,

and you had all this condensation.

So we've insulated that roof,

and got a full ceiling in it.

We couldn't get out to the garden before,

but there's a lovely outside space.

The project has taken longer than expected.

Frances works full-time,

and she and her husband, Ron, have also moved house.

Although Ron did the plumbing, and they've both done the decorating,

it's had to be mainly in the evenings and weekends.

But what about daughter Becky?

Did she lend a hand, as planned?

Becky, obviously, was quite involved early on.

She came down quite a few times,

to help get the chimney breast down,

and that was a big job.

Then, basically, this year

she's helped with painting.

And how has the budget fared?

Did Frances stick to that 8,000 to 10,000?

The budget, up-to-date, has went to 22,000,

but we still think we have another couple of thousand,

for the flooring,

and some more painting on the outside.

Frances and Ron paid £82,000 for the house.

Their spend is likely to end up

around £24,000.

They overspend was because they followed

Frances' plans to move the stairs.

It takes their total outlay to around 106,000.

Time to hear what two local estate agents think of the finished result.

I love the way they've done the property with the staircase.

Most Victorian properties have the staircase going through the middle,

which uses up so much room.

They've taken away the chimney breasts,

and used it the best it can be used in a Victorian house.

I think moving the staircase has given a proper landing upstairs.

Also now, you have two good-sized bedrooms,

and a lovely-sized bathroom.

so it gives it that really nice, big feel about the house.

I like neutral colours, normally, in houses,

as it's my job to sell them.

But the kitchen, as it's open-plan,

with the dining room and the lounge,

it's nice to see a bit of colour through there.

What about the numbers?

Is the property now worth more than the 106,000 they've invested here?

If I was going to put this property on the market,

I'd be looking at marketing it around

£110,000 to £115,000 for the property

At the moment, I'd market it in today's market at 114,995 -

in order to achieve £110,000 upwards.

Those valuations could generate a potential gross profit

of between £4,000 and £9,000.

Minus the usual selling fees,

after 18 months.

That's better than we thought,

because we thought we might just break even.

Although we're still not going to sell. We want to wait, and rent it.

How much can the experts

see local tenants paying for this?

If I was going to rent this property out, I'd be looking at between

£575 per calendar month,

to somewhere around £595 per calendar month.

Rentings at the moment are quite easy.

You'd get £525 to £550, per calendar month.

That's a potential yield of between 6% and 7%.

Which makes renting the wise thing to do here.

Is Frances happy with that?

Obviously, the top amount is better!

SHE LAUGHS

It's more than we thought, actually,

so that's good.

Getting this, their third investment property

ready to rent out

had dragged on a bit,

which for any buy-to-let investor is not ideal.

Is Frances pleased with the end result?

It's been hard work - and it's been a lot longer than the others,

but now you can see the end product,

and once we've done the garden and that, it'll be nice.

A nice house for someone.

Earlier in the programme, in Blurton, Stoke-on-Trent,

a second floor one-bedroom flat in this block

was bought for £34,000 by Paul.

It took his buy-to-let portfolio to seven.

He owns his own kitchen fitting business in Maidenhead,

but has concentrated his property portfolio

in the Stoke area, where he can get a better rental return.

Does it make managing the properties trickier?

I'm quite lucky that I have my own kitchen and bathroom business.

Oh, great.

But obviously, I don't come up here to do all of that.

I've got an excellent carpenter and plumber,

and electricians, and the rest of the trades I've made contact with

since I've been doing this.

Seven weeks had passed when we returned to Blurton,

and met up again with Paul to see the finished flat.

The hallway has retained the red door,

but the carpet and walls have been toned down.

The fireplace remains in the living room,

and this feature wall is certainly blooming!

New windows have been installed throughout the flat.

No surprises that the kitchen looks great,

with replacement units, sink and window.

Next door, in the bathroom,

there's further improvement.

We've done a huge amount of work in the bathroom.

We had an old, white cast-iron bath,

with two taps in the corner.

We've replaced that now with a stand-in shower.

But that wasn't the only thing.

On this wall,

the panelling that came along this wall,

stood out about four or five inches.

Behind that panelling, and in the kitchen,

were two massive water tanks.

In order to get the shower in,

we had to take all of that out.

So, as you can see,

it's made it a lot bigger.

I'm really pleased with the way it's turned out.

Much more roomy.

Got a tremendous shower in there.

And it's something that I'd enjoy coming in to.

Yes, the tiling and white appliances really look great.

Along the corridor, the bedroom has new carpets and a colour scheme.

But the bedside cabinets have been reused.

But what were the main issues in the living room?

The major thing in this room was the ceiling,

which was Artex-ed.

I got hold of a local plasterer

He came in and did the ceiling.

I kept the fireplace,

cos I thought, "Why rip it out? It looks good. Does the job".

But if you intend to keep an existing fire,

you must check that it meets electrical safety regulations.

Paul reused the oven in the kitchen.

He got it checked out and it was fine,

but he did install a new water heater to provide instant hot water.

Surely that sounds a bit of an expensive luxury?

The cost of the unit was £140.

To be quite honest,

the scrap value of the copper and brass we've taken out

probably paid for it.

MUSIC: "Brass in Pocket" by The Pretenders

Paul travelled up from Maidenhead to do the initial work on the flat,

but then had to concentrate on his kitchen business.

So the two local qualified tradesmen he uses did the rest.

And a third colleague travelled up from the south

to do the decorating.

With his trade contacts,

Paul sourced some good bargains.

But, once the labour cost had been added,

plus the replacement windows,

did he stick to his £5,000 - £6,000 budget?

We spent a little more than that,

because we've had extra work to do.

So, I've spent just a fraction over £7,000.

Still, not bad.

With his £34,000 purchase price, it takes the total to £41,000.

Time to hear the opinions of two local property experts.

My first impression is that he's done a very nice job

with quite limited space.

The bathroom looks really nice.

It was a good idea to put the shower in,

rather than compromise the space by trying to fit a bath in,

so he's done a good job.

What I particularly like about the kitchen

is the fact he's taken the time and trouble

to remove the water tanks

that were taking up a lot of valuable space.

The kitchen's great, again with that extra space.

It's really enabled him to put in extra storage,

so that will really appeal to people, I'm sure.

The property will appeal

to single renters, because of the security aspect.

Second floor, security doors.

As well as sharers, as well.

How much could the flat achieve if it was sold on -

more than the £41,000 Paul has spent on it?

If we were going to put the property up for sale,

we'd probably market it around the £45,000 mark,

to get as close as possible.

If we were marketing this property, we would look for an asking price

of £47,500.

That would produce £4,000 to £6,500 gross profit,

before the usual expenses.

Is that the sort of valuation Paul had expected?

I thought it would be round about 50-ish.

But it doesn't surprise me.

But Paul's always planned

to rent it out for his buy-to-let portfolio.

So, what income could he achieve?

For rental,

the property would achieve about £375 per calendar month.

I would suggest a rent per calendar month of £375.

That makes a yield of around 11%, based on those estimates.

375? Pretty good.

That's more than they normally get here.

But they're not to this standard.

So, yeah, I'm pleased with that.

So Paul's decision to build his portfolio around Stoke-on-Trent

looks to be paying dividends.

What advice would he give other prospective developers?

Take a good look at the property.

Keep what you can,

as long as it's worth keeping,

and make sure you do a good job.

Because at the end of the day,

I think you get a good tenant in return.

Join us next time for more riveting properties

being sold under the hammer.

Yes, no two stories are ever the same -

so, for more flats, maisonettes and houses,

we'll see you next time.

-Goodbye!

-Bye!

Subtitles by Red Bee Media Ltd