0:00:02 > 0:00:04- Welcome to the programme. - We're told to save for the future.
0:00:04 > 0:00:07And that's even more true these days when people are looking
0:00:07 > 0:00:10to supplement their pensions and invest their savings.
0:00:10 > 0:00:13Well, property is an attractive option
0:00:13 > 0:00:16and you'll find plenty of those in the auction rooms.
0:00:41 > 0:00:44If, like us, you're hoping that property will be
0:00:44 > 0:00:47a fruitful investment, you need to buy wisely.
0:00:47 > 0:00:49And that means doing your research
0:00:49 > 0:00:51and knowing exactly what you're taking on.
0:00:51 > 0:00:55- So, what inspired the buyers on today's show?- Let's take a look.
0:00:57 > 0:01:01In Mousehole, Cornwall this cottage needs some work.
0:01:01 > 0:01:04But what you're working with is somewhere
0:01:04 > 0:01:06that's a great place for the money.
0:01:06 > 0:01:10This terraced house in London may be in a sorry state
0:01:10 > 0:01:11but don't be put off.
0:01:11 > 0:01:16It wouldn't take an awful lot to bring this place up to standard.
0:01:16 > 0:01:20And is there no end to the accommodation
0:01:20 > 0:01:22in this place in Howdon, near Newcastle?
0:01:22 > 0:01:24It's a terraced house, for goodness sake
0:01:24 > 0:01:26and it just keeps going on and on.
0:01:27 > 0:01:29All these properties went to auction.
0:01:29 > 0:01:3120,000 bid.
0:01:31 > 0:01:32We'll find out who bought them
0:01:32 > 0:01:35and what they paid, when they went under the hammer.
0:01:35 > 0:01:36It's sold.
0:01:39 > 0:01:43Apparently Dylan Thomas once described Mousehole
0:01:43 > 0:01:46on the south coast of Cornwall as,
0:01:46 > 0:01:48"The loveliest village in Britain."
0:01:48 > 0:01:50I'm not going to argue with him.
0:01:50 > 0:01:52Fishing used to be the main industry,
0:01:52 > 0:01:56but now it's tourism with thousands of holidaymakers
0:01:56 > 0:02:00flocking here to this picture postcard perfect place.
0:02:00 > 0:02:02MUSIC: "Postcard" by Eddi Reader
0:02:02 > 0:02:04# You sent a pretty postcard
0:02:04 > 0:02:08# From a far and lonely sea. #
0:02:12 > 0:02:13It really is a perfect seaside village.
0:02:13 > 0:02:15And probably hasn't changed much
0:02:15 > 0:02:19over the past 100 or so years.
0:02:19 > 0:02:21It's a beautiful, fresh spring afternoon now,
0:02:21 > 0:02:25but I imagine that during the summer it's teeming with visitors.
0:02:25 > 0:02:26So, let's find out
0:02:26 > 0:02:31if the place I'm here to see lives up to its gorgeous surroundings.
0:02:31 > 0:02:35Well, location is the key to any investment.
0:02:35 > 0:02:38So, just 30 seconds' walk from the harbour
0:02:38 > 0:02:43and the property I'm here to see has got to be worth a look.
0:02:43 > 0:02:46And this is it. It's a two-bedroomed cottage.
0:02:46 > 0:02:48As you can see, stone built.
0:02:48 > 0:02:52Had a guide price of 135,000 quid and I am very excited.
0:02:57 > 0:03:01So, what have we got? Basically it is a two up, two down.
0:03:01 > 0:03:05On this side you've got your living-room area.
0:03:05 > 0:03:08Nice to have the open fire. That would be lovely in the winter,
0:03:08 > 0:03:11because actually this place is quite popular throughout the year.
0:03:11 > 0:03:12Lots of character.
0:03:12 > 0:03:16These thick walls means you've got these lovely window seats
0:03:16 > 0:03:20and get all this stripped back, it'll be glorious.
0:03:20 > 0:03:25Do something with the ceiling to give it a bit more character.
0:03:25 > 0:03:27I'm getting the feeling there's stuff hidden away here
0:03:27 > 0:03:29that you could unearth.
0:03:29 > 0:03:32You've got storage radiators at the moment which isn't ideal.
0:03:32 > 0:03:34So possibly look to put central heating in.
0:03:34 > 0:03:37And to be fair you haven't got a lot of depth,
0:03:37 > 0:03:39in the whole property.
0:03:39 > 0:03:41Over this side is your kitchen.
0:03:41 > 0:03:45And again, I think you could create such character here
0:03:45 > 0:03:48if you put in a lovely rustic country,
0:03:48 > 0:03:50or maybe seaside-feel kitchen.
0:03:50 > 0:03:52Enough space for some good units here
0:03:52 > 0:03:56and then maybe a table where you could just chill out.
0:03:56 > 0:03:58All in all - work to be done,
0:03:58 > 0:04:02but what you're working with is somewhere
0:04:02 > 0:04:03that's a great place for the money.
0:04:03 > 0:04:08It's an old fisherman's cottage, so there isn't loads of room.
0:04:08 > 0:04:09But the layout is simple and works well.
0:04:09 > 0:04:14There's no garden but what does upstairs have to offer?
0:04:14 > 0:04:19So, upstairs and I think pretty good news really.
0:04:19 > 0:04:22You've got a good-sized double bedroom on that side.
0:04:22 > 0:04:25Bit of a landing.
0:04:25 > 0:04:29A small, but at least it's in the right place, bathroom and loo.
0:04:29 > 0:04:33And then through to your second double bedroom.
0:04:33 > 0:04:37So, either if you're thinking about living here or renting it
0:04:37 > 0:04:40out for a family, it's got everything you need.
0:04:40 > 0:04:42And again, it needs a bit of tarting up,
0:04:42 > 0:04:46but not that much in the whole scheme of things.
0:04:46 > 0:04:47It would be lovely to think
0:04:47 > 0:04:50that this will become someone's seaside home,
0:04:50 > 0:04:54but something tells me this will be destined to be a holiday let.
0:04:54 > 0:04:57For an investor it could be a smart move.
0:04:57 > 0:05:01The potential in such a picturesque village could be huge.
0:05:01 > 0:05:03So, let's talk about holiday lets.
0:05:03 > 0:05:07Well, you haven't got sea views or any outdoor space.
0:05:07 > 0:05:09However, you are centrally located,
0:05:09 > 0:05:13so I reckon you could still get around £700 a week.
0:05:13 > 0:05:16Obviously that's in the peak season. Less at other times of the year.
0:05:16 > 0:05:20But it's not just about the money. It's about void periods.
0:05:20 > 0:05:22You want to make sure that you've got people in the property
0:05:22 > 0:05:25as much as possible. I've been checking on the internet
0:05:25 > 0:05:28and some of the accommodation around here is literally
0:05:28 > 0:05:30booked up months, if not years in advance.
0:05:30 > 0:05:33And...it's full most of the time.
0:05:33 > 0:05:35Wow, that's got to be good news.
0:05:35 > 0:05:39Turns out, Mousehole, yes, is pretty, but it's also small.
0:05:39 > 0:05:42So accommodation is at a premium.
0:05:42 > 0:05:47This fisherman's cottage could end up netting you some good returns.
0:05:47 > 0:05:51# I'm getting better
0:05:51 > 0:05:53# All the time. #
0:05:55 > 0:05:58I think this little property in this beautiful setting
0:05:58 > 0:06:00has bags of potential.
0:06:00 > 0:06:03But what does a local property expert reckon?
0:06:03 > 0:06:05We asked one along to give us his opinion.
0:06:08 > 0:06:10It's very popular as a holiday destination.
0:06:10 > 0:06:13You have a good pub in the village.
0:06:13 > 0:06:14Several really good restaurants,
0:06:14 > 0:06:18plenty of character with all the cobbled streets.
0:06:18 > 0:06:19History and heritage.
0:06:19 > 0:06:22This property is one that's in need of some updating,
0:06:22 > 0:06:25especially within the kitchen.
0:06:25 > 0:06:27But it has bags of character.
0:06:27 > 0:06:31I feel it's a property that will have appeal
0:06:31 > 0:06:34to people looking for a pied a terre, holiday escape
0:06:34 > 0:06:37and also there is the possibility
0:06:37 > 0:06:41of a retirement home for a couple
0:06:41 > 0:06:45or maybe even for the short-term assured-tenancy letting market.
0:06:45 > 0:06:48The estate agent reckons this could be worth
0:06:48 > 0:06:52in the region of £225,000 once refurbished.
0:06:52 > 0:06:55But where does its best value lie?
0:06:55 > 0:06:58The best way to make money on this particular property
0:06:58 > 0:07:01would certainly be to holiday let.
0:07:01 > 0:07:04In the high season I feel one could expect
0:07:04 > 0:07:07a rental income in the region of £700 per week.
0:07:09 > 0:07:11Well, it's an oft-used phrase
0:07:11 > 0:07:16but it's certainly very valid in this instance.
0:07:16 > 0:07:19Chances like this don't come up very often.
0:07:19 > 0:07:22It's a delightful cottage in a lovely location
0:07:22 > 0:07:24in this picturesque setting.
0:07:24 > 0:07:26I'm sure there was a lot of demand for this
0:07:26 > 0:07:28when it went under the hammer.
0:07:29 > 0:07:32Lot 16 in Mousehole.
0:07:32 > 0:07:35I have a telephone bidder, ladies and gentlemen, for this lot.
0:07:35 > 0:07:38So, where should we start - £135,000.
0:07:38 > 0:07:40I don't want to start too far from there.
0:07:40 > 0:07:44130,000. 140.
0:07:44 > 0:07:46145?
0:07:46 > 0:07:50145 I have then.
0:07:51 > 0:07:55150 on the phone. 155 now? 155. 160?
0:07:55 > 0:07:57160 on the phone. 165 now?
0:07:57 > 0:07:59Back against you at the back on the right.
0:07:59 > 0:08:04If there's nobody else coming in. Two and a half. 162 and a half.
0:08:04 > 0:08:08165 now, please, on the phone. 165.
0:08:10 > 0:08:12166 now in the room.
0:08:12 > 0:08:16At £166,000 then it's with you, sir.
0:08:16 > 0:08:19Yes, £166,000 for the first time.
0:08:20 > 0:08:23Those immortal words, "Get on with it, auctioneer."
0:08:23 > 0:08:24For the second time.
0:08:25 > 0:08:29Third and final time
0:08:29 > 0:08:31at £166,000.
0:08:31 > 0:08:35In the room. I am selling it.
0:08:35 > 0:08:37It's sold to you - 166.
0:08:37 > 0:08:38Thank you very much.
0:08:38 > 0:08:43It was Martin who made that successful bid of £166,000.
0:08:44 > 0:08:46# Take a look at that deep blue sea
0:08:46 > 0:08:48# Don't you think it looks great? #
0:08:49 > 0:08:52Martin's a head teacher and is married to Yvonne.
0:08:52 > 0:08:55They live in Croydon and own a holiday home in Cornwall.
0:08:55 > 0:08:58# Gotta go
0:08:58 > 0:09:00# Get away... #
0:09:00 > 0:09:03Now, they've snapped up this one as well.
0:09:03 > 0:09:06I met Martin back at the property to find out more.
0:09:08 > 0:09:12# I know a little place not far from town
0:09:12 > 0:09:13# Gotta go
0:09:13 > 0:09:15# A kinda pretty place
0:09:15 > 0:09:17# Three up, two down. #
0:09:17 > 0:09:21- Martin, congratulations.- Thank you very much.- Lovely to meet you.
0:09:21 > 0:09:23Tell me why you wanted to buy this place?
0:09:23 > 0:09:28I was just searching on the internet for property in Cornwall
0:09:28 > 0:09:30and in particular just happened to punch in Mousehole
0:09:30 > 0:09:32and this popped up as just coming up for auction.
0:09:32 > 0:09:36So, what is the affinity with Cornwall?
0:09:36 > 0:09:40My partner is a Cornish girl and I've always loved Cornwall
0:09:40 > 0:09:44and eventually we would like to move down to this part of the world.
0:09:44 > 0:09:46So, is this the first property you've got around here?
0:09:46 > 0:09:50- No, I have another property down on the Lizard in fact.- Holiday home?
0:09:50 > 0:09:52It's a holiday home bought ten years ago
0:09:52 > 0:09:53in worse condition than this actually.
0:09:53 > 0:09:55So, I've done that up and it's now let out.
0:09:55 > 0:09:57And is the plan to do something similar with this?
0:09:57 > 0:09:59Similar with this, yes.
0:09:59 > 0:10:01To do it up and then probably decide which one to keep
0:10:01 > 0:10:03because probably won't be able to keep both.
0:10:03 > 0:10:05And what do you think about the general condition?
0:10:05 > 0:10:08Actually, I've got to say I'm very pleased with the condition.
0:10:08 > 0:10:10It's not showing any damp,
0:10:10 > 0:10:12even though it's been empty for about nine months.
0:10:12 > 0:10:16I walked in here the day before the auction to have a look at it
0:10:16 > 0:10:21and just thought, "Actually nothing major structural needs doing to it."
0:10:21 > 0:10:23It's a "refreshment" is the estate agent's term.
0:10:25 > 0:10:29So apart from decoration and a new kitchen and sorting out the bathroom,
0:10:29 > 0:10:32there does not appear to be anything majorly structurally wrong with it.
0:10:32 > 0:10:34So, tell me what you're going to do to sort it out.
0:10:34 > 0:10:38One of the features I'd like to keep is in the windows,
0:10:38 > 0:10:40because they have got this secondary glazing in them
0:10:40 > 0:10:43which I think is the first thing I would like to rip out.
0:10:43 > 0:10:45Behind them, especially the downstairs windows,
0:10:45 > 0:10:47there are some shutters.
0:10:47 > 0:10:49It would be really nice just to open those again
0:10:49 > 0:10:50and see if they do actually work.
0:10:50 > 0:10:54Apart from that, fairly minimalist and put wood flooring throughout
0:10:54 > 0:10:57on the downstairs and I've been looking at the bathroom
0:10:57 > 0:11:01and probably will take out the bath and will replace that
0:11:01 > 0:11:04with a shower to create more room in there, because it is quite small.
0:11:04 > 0:11:07So that actually somebody could get in there and do their make-up,
0:11:07 > 0:11:09which you couldn't do at the moment.
0:11:09 > 0:11:12# Lipstick, powder and paint
0:11:12 > 0:11:14# Lipstick, powder and paint. #
0:11:14 > 0:11:17And a touch of lipstick isn't the only makeover
0:11:17 > 0:11:19that's going to be applied here then.
0:11:19 > 0:11:22Good news and even better news for Martin
0:11:22 > 0:11:24is that there is no major structural work to be done.
0:11:24 > 0:11:26He's given himself a £15,000 budget
0:11:26 > 0:11:29which should be more than enough for the job
0:11:29 > 0:11:32and he's saving money on labour too.
0:11:33 > 0:11:36I have done lots of DIY over the years in various houses
0:11:36 > 0:11:38so I can do most things,
0:11:38 > 0:11:40apart from things you're not supposed to do like electrics and such.
0:11:40 > 0:11:44And plastering, I can't plaster. But plumbing and everything else, yes.
0:11:44 > 0:11:46- But you'll be doing that kind of stuff in here?- I will, yes.
0:11:46 > 0:11:48I really enjoy that.
0:11:48 > 0:11:51Martin is waiting until he retires
0:11:51 > 0:11:53before he and Yvonne move permanently to the area,
0:11:53 > 0:11:56but will use this property a few weeks of the year
0:11:56 > 0:11:57as their holiday home.
0:11:57 > 0:11:59Rest of the time they'll let it.
0:12:00 > 0:12:05What kind of price per week if you were to rent it out you would get?
0:12:05 > 0:12:07I've been looking around.
0:12:07 > 0:12:10I think during the summer holiday, the school summer holidays,
0:12:10 > 0:12:13we're probably looking about £650-700 a week.
0:12:13 > 0:12:16- That's a reasonable return. - Yes.- Congratulations.
0:12:16 > 0:12:18There are lots of people who are watching are very jealous
0:12:18 > 0:12:19that you got this place.
0:12:19 > 0:12:22Thank you very much indeed. You must come back and see us.
0:12:22 > 0:12:23- Good luck with it.- Thank you.
0:12:23 > 0:12:27Well, you'll agree, Martin's got himself a great property
0:12:27 > 0:12:29here in a beautiful location.
0:12:29 > 0:12:33And somewhere to use in the run up to his retirement
0:12:33 > 0:12:37and make some money from holiday rentals at the same time.
0:12:37 > 0:12:40Can't go wrong. Let's see how he gets on, later in the show.
0:12:46 > 0:12:48I'm in Edmonton, North London.
0:12:48 > 0:12:51Once home to famous factories and famous faces,
0:12:51 > 0:12:53such as Bruce Forsyth and David Jason.
0:12:55 > 0:12:57It's not always had the best of reputations,
0:12:57 > 0:13:01but there are ongoing efforts to improve the shopping centre area.
0:13:01 > 0:13:05Investment-wise, house prices are still comparatively low here
0:13:05 > 0:13:07and it's a popular rental area.
0:13:07 > 0:13:13So, I can't wait to check out the potential of this lot.
0:13:13 > 0:13:16# London, can you wait? #
0:13:16 > 0:13:18Even though it's just 20 minutes by train
0:13:18 > 0:13:21to the heart of the city at Liverpool Street,
0:13:21 > 0:13:26property around here certainly isn't priced to tax a banker's wallet.
0:13:26 > 0:13:30Whole houses around here sell for less than a studio flat
0:13:30 > 0:13:32just a few miles into London.
0:13:32 > 0:13:35And it's a whole house I'm here to see.
0:13:35 > 0:13:39It's got two bedrooms and it had a guide price of £150,000.
0:13:42 > 0:13:44From the outside, it looks a tad dated.
0:13:44 > 0:13:47With its fake flowers and flimsy porch.
0:13:47 > 0:13:48But it's really not too bad
0:13:48 > 0:13:52and the road is certainly pleasant and quiet.
0:13:53 > 0:13:56Very...yellow.
0:13:56 > 0:14:00But it's clean as a whistle in here.
0:14:00 > 0:14:04Wow, what a lovely surprise. It almost smells of air freshener.
0:14:04 > 0:14:07I mean it really is in good condition - OK, a little bit dated.
0:14:07 > 0:14:10You can see this was probably done a long while ago.
0:14:10 > 0:14:13They've knocked through to open the space up.
0:14:13 > 0:14:16Now, come round here because the jury is out on this one.
0:14:16 > 0:14:18Would you want to get rid of this?
0:14:18 > 0:14:21You could open this space up and go into the hallway.
0:14:21 > 0:14:22Take this bit of wall out.
0:14:22 > 0:14:25Do you think you could fit a three-piece suite in here?
0:14:25 > 0:14:28I'm not necessarily sure you would need to do that.
0:14:28 > 0:14:29But of course the option is there.
0:14:29 > 0:14:32You've got another really good-size room here.
0:14:32 > 0:14:34You could call this your dining room.
0:14:34 > 0:14:38A little bit dated. You've got polystyrene tiles to think about.
0:14:38 > 0:14:42But, it wouldn't take an awful lot to bring this place up to standard.
0:14:44 > 0:14:48So potentially not much to alter at the front of this house
0:14:48 > 0:14:50that went to auction guided at 150,000,
0:14:50 > 0:14:53but at the back I've got a puzzle for you.
0:14:55 > 0:14:58So, are you paying attention?
0:14:58 > 0:15:01Here's a little test. Where am I?
0:15:01 > 0:15:04Yes, that's a shower. Am I in the bathroom?
0:15:05 > 0:15:07No, in the kitchen, of course.
0:15:09 > 0:15:11Only on Homes Under The Hammer.
0:15:11 > 0:15:14# How bizarre
0:15:14 > 0:15:16# How bizarre
0:15:16 > 0:15:18# How bizarre. #
0:15:18 > 0:15:21Well, I thought I'd seen it all, but a shower in the kitchen?
0:15:21 > 0:15:23That is pretty bizarre.
0:15:23 > 0:15:26Not to mention awkward if you get up late and fancy a shower
0:15:26 > 0:15:30when your other half is right next to you cooking bacon and eggs.
0:15:31 > 0:15:35Space-wise, there's a little lean-to area at the side of the kitchen.
0:15:37 > 0:15:41Which is incorporated with what once would have been the outside loo.
0:15:41 > 0:15:46But in terms of a bathroom. this sad but functional WC
0:15:46 > 0:15:49and the shower in the kitchen is your lot, I'm afraid.
0:15:49 > 0:15:51That definitely needs to be sorted out.
0:15:51 > 0:15:54But this place does have some major plus points.
0:15:56 > 0:15:58Inside, yes, it's clean and tidy
0:15:58 > 0:16:02but it's out here that's been really loved.
0:16:02 > 0:16:04MUSIC: "The Universal" by Blur
0:16:04 > 0:16:06This really is a gorgeous garden.
0:16:06 > 0:16:09You can see how much care and attention
0:16:09 > 0:16:11have gone into cultivating it.
0:16:11 > 0:16:13It will certainly be a big selling point.
0:16:13 > 0:16:18Which could be vital if I can't find a new location for the bathroom.
0:16:19 > 0:16:21Now, I'm just hoping in this solid little house
0:16:21 > 0:16:24there is enough room to house a bathroom up here.
0:16:24 > 0:16:26Otherwise, it's just not really going to work for me.
0:16:26 > 0:16:28Bedroom number one - not a bad size.
0:16:28 > 0:16:31Good-size double here. I'm just wondering
0:16:31 > 0:16:35if there's a little bit more space or depth in that cupboard.
0:16:35 > 0:16:38No, not really. That's quite shallow.
0:16:38 > 0:16:39Oh, no. It's obvious.
0:16:39 > 0:16:43There's no room to locate the bathroom upstairs.
0:16:43 > 0:16:46You don't hear me say this very often on Homes Under The Hammer,
0:16:46 > 0:16:50but I think you're going to have to build a bathroom downstairs.
0:16:50 > 0:16:53Now, you've got a couple of options. You could extend.
0:16:53 > 0:16:56You could even think about putting the bathroom into the lean-to.
0:16:56 > 0:16:59Perhaps making that into a permanent structure.
0:16:59 > 0:17:01But whoever buys this at auction
0:17:01 > 0:17:05has got to factor in the extra cash they need to spend here.
0:17:05 > 0:17:09You could try to squeeze a bathroom in between the two bedrooms,
0:17:09 > 0:17:12but I think you'd end up with a pretty small second bedroom,
0:17:12 > 0:17:16far from ideal and there's no plumbing here.
0:17:16 > 0:17:19So I think that would also impact heavily on your budget.
0:17:21 > 0:17:24We asked a local estate agent
0:17:24 > 0:17:27to come and look over the property, guided at 150,000.
0:17:27 > 0:17:31First impression of the property is that it needs some work.
0:17:31 > 0:17:34In my opinion, the bathroom needs to be upstairs between the two bedrooms.
0:17:34 > 0:17:37Have the main bedroom at the front of the house
0:17:37 > 0:17:39and the second bedroom towards the back of the house.
0:17:39 > 0:17:42OK, but that's a big job that could cost big bucks.
0:17:42 > 0:17:44So, would it be worth it?
0:17:44 > 0:17:48How much rental income could the property generate?
0:17:48 > 0:17:51In my opinion, this property would rent for £1,000 per calendar month.
0:17:51 > 0:17:53And it would rent very quickly.
0:17:53 > 0:17:56So once the house has had a refurbishment
0:17:56 > 0:18:01and got a bathroom installed, how much could it potentially be worth
0:18:01 > 0:18:03if it was then put back up for sale?
0:18:03 > 0:18:06Once the work has been done to the property, in my opinion,
0:18:06 > 0:18:09the property's going to sell for between £195-200,000
0:18:09 > 0:18:11with the bathroom being downstairs.
0:18:11 > 0:18:14And with it being upstairs, something in the region of £205-210,000.
0:18:16 > 0:18:20So, squeezing the bathroom in upstairs may be more lucrative.
0:18:20 > 0:18:24Well, upstairs or downstairs, even with the cost of the bathroom,
0:18:24 > 0:18:26there could be money to be made here.
0:18:26 > 0:18:30If bought close to that £150,000 guide price.
0:18:33 > 0:18:38To find a whole house for this guide price in London is a rarity.
0:18:38 > 0:18:40OK, so it isn't the most desirable postcode,
0:18:40 > 0:18:44but if you were after a straightforward freehold investment
0:18:44 > 0:18:48that would rent extremely well, I think you could definitely do worse.
0:18:48 > 0:18:50Let's see who agreed at the auction.
0:18:52 > 0:18:56This is lot 53 - good potential. Lot 53.
0:18:56 > 0:19:00House, Edmonton. Must be cheap.
0:19:00 > 0:19:02Not going to go below 150.
0:19:02 > 0:19:04150 in the aisle.
0:19:04 > 0:19:07151? 151 on my right.
0:19:07 > 0:19:11151. 152.
0:19:11 > 0:19:14153. 154.
0:19:14 > 0:19:18155. 156.
0:19:18 > 0:19:21- 157.- With interest in this lot high,
0:19:21 > 0:19:26we rejoin the auction at £175,000.
0:19:26 > 0:19:29175. 176.
0:19:29 > 0:19:31177. 178.
0:19:31 > 0:19:33179. 180.
0:19:33 > 0:19:36181. 182.
0:19:36 > 0:19:40183. 184.
0:19:40 > 0:19:43185. 186.
0:19:43 > 0:19:45187.
0:19:46 > 0:19:48If not, 186.
0:19:48 > 0:19:49First time, second time.
0:19:49 > 0:19:53Third and last time if you're all done?
0:19:53 > 0:19:55Sold - 186. Well done, sir.
0:19:55 > 0:19:57He was in there from the start
0:19:57 > 0:20:02and it was Ray who paid £186,000 for the property -
0:20:02 > 0:20:0436 grand over the guide price.
0:20:04 > 0:20:07He and his wife, Diana, live in Buckinghamshire
0:20:07 > 0:20:09and bought the house as a joint investment
0:20:09 > 0:20:11with their builder friend, Victor.
0:20:11 > 0:20:13He will do most of the work in return
0:20:13 > 0:20:17for a 50/50 split of any profits.
0:20:17 > 0:20:19Diana runs a fancy dress shop
0:20:19 > 0:20:22and Ray used to work in communications for the police,
0:20:22 > 0:20:25but now runs a fireworks business.
0:20:25 > 0:20:28# Baby you're a firework
0:20:28 > 0:20:32# Come on let your colours burst. #
0:20:32 > 0:20:34- Ray and Diana, lovely to meet you. - And you.
0:20:34 > 0:20:37Why did you want to buy this property at auction?
0:20:38 > 0:20:41We were looking for a property to buy
0:20:41 > 0:20:44and to turn over and make good.
0:20:44 > 0:20:47This one said it, "Needed decoration and refurbishment"
0:20:47 > 0:20:49and it came within budget and so we bought it.
0:20:49 > 0:20:51So Diana, what did you think on the viewing?
0:20:51 > 0:20:54As you viewed this property, what were you thinking?
0:20:54 > 0:20:56I thought, "That looks a very nice little house."
0:20:56 > 0:20:58I wished I could get in to see it,
0:20:58 > 0:21:01but we didn't...weren't here on the right moment.
0:21:01 > 0:21:05But it looked very nice. I noticed it had a new roof.
0:21:05 > 0:21:06So I thought, "Let's go for it."
0:21:06 > 0:21:10So you bought this on how it looked from the outside?
0:21:10 > 0:21:13- Yes.- You didn't come inside? - I didn't come inside.
0:21:13 > 0:21:15But been to the area, speaking to neighbours,
0:21:15 > 0:21:17checking with agents about other houses in the area.
0:21:17 > 0:21:19So you did take a bit of a risk, a huge risk in fact.
0:21:19 > 0:21:22- Yes.- Especially as we looked at the brochure
0:21:22 > 0:21:23and it didn't mention a bathroom.
0:21:23 > 0:21:25- Right, so. - I thought it must be a typo.
0:21:26 > 0:21:28But it wasn't.
0:21:28 > 0:21:30I really should give these two a rocket.
0:21:30 > 0:21:35# Fireworks shooting off in her head
0:21:35 > 0:21:36# In her head. #
0:21:36 > 0:21:39The lesson here is never assume anything.
0:21:39 > 0:21:41If they had viewed the property prior to the auction,
0:21:41 > 0:21:44they would have seen just what they were buying.
0:21:46 > 0:21:49It means the budget of 15,000 they'd originally set
0:21:49 > 0:21:54is likely to increase to around 20 as they try to find somewhere
0:21:54 > 0:21:55to locate the bathroom.
0:21:57 > 0:22:01We need to do something with the bathroom situation.
0:22:01 > 0:22:04But we've come up with a couple of ideas, looking at it.
0:22:05 > 0:22:10One is what I call, "The utility room," which is the lean-to.
0:22:10 > 0:22:13Turn that into a bathroom.
0:22:13 > 0:22:17And then Ray's idea is to take down the wall
0:22:17 > 0:22:18that goes round the toilet.
0:22:18 > 0:22:20Take the toilet and put it somewhere else
0:22:20 > 0:22:23and then make the kitchen squarer.
0:22:23 > 0:22:25That would be the cheaper option.
0:22:25 > 0:22:27The more expensive option would be to build an extension.
0:22:27 > 0:22:30But I think that is probably cost-prohibitive.
0:22:31 > 0:22:34So, has it changed things now? Now that you've actually come inside?
0:22:34 > 0:22:37And do you think if you'd have had a chance to view this property,
0:22:37 > 0:22:39you might not have bid for it on the day?
0:22:39 > 0:22:44No, I think it's still got lots of plusses. I think this is a nice house.
0:22:44 > 0:22:48But my only worry with that is, it's still incredibly dated.
0:22:48 > 0:22:52- So, you've got to start from scratch with this property.- Yes.
0:22:52 > 0:22:55We expected to do a complete decoration job anyway,
0:22:55 > 0:22:57so it's not going to be a great deal more.
0:22:57 > 0:23:01A little bit of structural work which is something new to me.
0:23:01 > 0:23:05But I'm sure that the chap I do it with - he is a builder
0:23:05 > 0:23:08and so I'm sure he can build me a wall
0:23:08 > 0:23:10and we can knock down a wall and put in some windows.
0:23:12 > 0:23:14The couple have some experience of renovating
0:23:14 > 0:23:16and then either selling or letting the properties.
0:23:16 > 0:23:19And they have a small portfolio.
0:23:19 > 0:23:21Their builder friend and business partner, Victor,
0:23:21 > 0:23:24will do most of the labour.
0:23:25 > 0:23:27Diana will need to work around her fancy dress business,
0:23:27 > 0:23:30but perhaps Ray will be able to help out.
0:23:32 > 0:23:34What about you Ray?
0:23:34 > 0:23:38I run a firework company and so sometimes busy at weekends
0:23:38 > 0:23:42but there's not so many firework displays in the week.
0:23:42 > 0:23:44- Are you going to have time to do what you need to do here?- Yes.
0:23:46 > 0:23:49My original estimate was three months.
0:23:49 > 0:23:52If we go for an extension it may be slightly longer.
0:23:52 > 0:23:54Guys, good luck.
0:23:54 > 0:23:57This is going to be an exciting if not trying time for both of you.
0:23:57 > 0:24:00- But I'm sure you are going to do a fantastic job.- Thank you.
0:24:00 > 0:24:04Diana, lovely to meet you. Ray, thank you very much.
0:24:06 > 0:24:08From fireworks and fancy dress to property,
0:24:08 > 0:24:12this pair certainly like to keep things interesting.
0:24:12 > 0:24:15But on a serious note, will they stick to their budget
0:24:15 > 0:24:17and where is that bathroom going to go?
0:24:17 > 0:24:22Find out if Diana and Ray's development project goes with a bang
0:24:22 > 0:24:26or turns out to be a party pooper later on in the programme.
0:24:27 > 0:24:28Coming up.
0:24:28 > 0:24:30With so many rooms,
0:24:30 > 0:24:33compromises may be needed in this flat near Newcastle.
0:24:33 > 0:24:36I think this could end up being a bit of a corridor room.
0:24:37 > 0:24:43In East London, rocket man Ray's learnt some sure-fire lessons.
0:24:43 > 0:24:46I have learnt with this one not to be quite so far away.
0:24:48 > 0:24:52But first we return to Cornwall, where Martin has the end in sight.
0:24:53 > 0:24:56Few small things left to do but about 90/95% done.
0:25:00 > 0:25:02So, back to Cornwall
0:25:02 > 0:25:06and the beautiful fishing village of Mousehole,
0:25:06 > 0:25:10where earlier we met Martin, a head teacher from Croydon, South London.
0:25:10 > 0:25:16He'd bought this little two-bed cottage for £166,000.
0:25:16 > 0:25:19His wife, Yvonne, was born in this part of the country
0:25:19 > 0:25:22and they both plan to return here later in life.
0:25:22 > 0:25:24They've bought this as a holiday let,
0:25:24 > 0:25:26but already have an important foothold
0:25:26 > 0:25:28in the property market here.
0:25:28 > 0:25:30So, is this the first property you've got around here?
0:25:30 > 0:25:33No, I have got another property down on the Lizard in fact.
0:25:33 > 0:25:34So I've done that up and it's now let out.
0:25:34 > 0:25:37And is the plan to do something similar with this?
0:25:37 > 0:25:38Similar with this, yes -
0:25:38 > 0:25:40to do it up and then probably decide which one to keep.
0:25:40 > 0:25:42Because probably won't be able to keep both.
0:25:45 > 0:25:48But before this place is ready for those first holiday-makers,
0:25:48 > 0:25:51Martin had a budget of £15,000 to freshen the place up
0:25:51 > 0:25:54and add a new kitchen and bathroom.
0:25:55 > 0:25:57So, we've returned one year later
0:25:57 > 0:26:01to see if he's managed to give the holiday-makers what they want.
0:26:04 > 0:26:08Well, talk about kerb appeal - this cottage has now got it in spades.
0:26:08 > 0:26:12With a newly painted front door and some horticultural set dressing.
0:26:15 > 0:26:18And the appeal continues inside with the lounge
0:26:18 > 0:26:22now a far more comfortable place that's also easier on the eye.
0:26:25 > 0:26:27The overhauled kitchen looks good too,
0:26:27 > 0:26:29with soft warm tones and new units.
0:26:29 > 0:26:33But as Martin explains, getting the lighting right
0:26:33 > 0:26:36is just as important as picking the right look.
0:26:36 > 0:26:40Well, in the kitchen we've had to take out absolutely everything.
0:26:40 > 0:26:42The first thing I did was the lighting
0:26:42 > 0:26:45because it was just a horrible fluorescent tube
0:26:45 > 0:26:47with a huge old-fashioned globe.
0:26:47 > 0:26:50So it was a complete rewire of the lighting in here.
0:26:50 > 0:26:53And then obviously an entire new kitchen.
0:26:53 > 0:26:57An entire new wooden floor and it is as you see it is now.
0:26:58 > 0:27:02Martin's done a good job upstairs, as well as down.
0:27:05 > 0:27:08A new shower unit has been installed and the bedrooms
0:27:08 > 0:27:10have been redecorated, carpeted and furnished.
0:27:16 > 0:27:19And apart from the electrics and some re-plastering,
0:27:19 > 0:27:21it's all been down to Martin's own fair hands.
0:27:23 > 0:27:26In this room, apart from the complete redecoration,
0:27:26 > 0:27:29and the insertion of new storage heating throughout the house,
0:27:29 > 0:27:31a new wooden floor has gone in.
0:27:31 > 0:27:33And when I took out the Yorkstone fireplace,
0:27:33 > 0:27:36I uncovered this old, Victorian, black-fire surround,
0:27:36 > 0:27:38which I then put a wooden surround around it
0:27:38 > 0:27:42and was able to recycle the slate hearth that was incorporated into it.
0:27:42 > 0:27:45I'm very pleased with this room. Especially when the suite arrived.
0:27:45 > 0:27:47It seemed to pull it all together.
0:27:47 > 0:27:51It's now a nice, cosy, little room and we enjoy sitting in here.
0:27:51 > 0:27:55# Everything's rosy, oh yeah
0:27:55 > 0:27:58# Comfy and cosy. #
0:27:58 > 0:28:01Well, don't get too comfortable, Martin.
0:28:01 > 0:28:03Although it seems ready for the summer season,
0:28:03 > 0:28:05there are still some loose ends.
0:28:05 > 0:28:07A few small things left to do.
0:28:07 > 0:28:10I haven't done the skirting in the room we're in for a moment.
0:28:10 > 0:28:12And the banisters haven't yet been painted
0:28:12 > 0:28:13and a few other little things.
0:28:13 > 0:28:16But about 90-95% done.
0:28:18 > 0:28:20Martin's role as a head teacher
0:28:20 > 0:28:24meant he wasn't able to start work on the renovation
0:28:24 > 0:28:26until five months after we first saw him.
0:28:26 > 0:28:30In total, it's taken him four months to get it into this condition.
0:28:30 > 0:28:34So, how did his £15,000 budget cope over that period?
0:28:35 > 0:28:37When this is finished,
0:28:37 > 0:28:40I think it'll probably work out about 10-11,000, so well within budget.
0:28:40 > 0:28:42I'm very pleased, actually.
0:28:42 > 0:28:44Well, that is good going.
0:28:44 > 0:28:48Add that to his £166,000 purchase price
0:28:48 > 0:28:52and Martin's total outlay is around £177,000.
0:28:54 > 0:28:55So with all the work put in,
0:28:55 > 0:28:59and the plan to move from Croydon to Cornwall in the future,
0:28:59 > 0:29:03could he ever see it as a retirement pad for themselves?
0:29:03 > 0:29:05No, this isn't the kind of property I'd like to live in.
0:29:05 > 0:29:08It's not really big enough and there is no outside.
0:29:08 > 0:29:11So no, I don't think this is suitable to live in.
0:29:11 > 0:29:13But we do want to move to this area, yes.
0:29:14 > 0:29:18With the house nearly ready for the holiday lettings market,
0:29:18 > 0:29:21it was time to ask two local estate agents if they thought
0:29:21 > 0:29:24Martin's new property would appeal to holiday makers.
0:29:26 > 0:29:30Well, the whole property's been lightened, brightened.
0:29:30 > 0:29:35There's a nice mix of contemporary and a lot of preserved character.
0:29:35 > 0:29:37Well, I like the way they've done it.
0:29:37 > 0:29:40They've used light colours which gives it an air of space
0:29:40 > 0:29:42and they've kept things to a minimum.
0:29:42 > 0:29:45It's a character cottage, but it's got that modern feel as well,
0:29:45 > 0:29:47so it's going to appeal to a lot of people, I think.
0:29:47 > 0:29:49I really like the wood flooring
0:29:49 > 0:29:53and the kitchen is just about the right sort of kitchen
0:29:53 > 0:29:56for the holiday market.
0:29:56 > 0:29:58I think he's done a spot-on job.
0:29:58 > 0:30:00It will attract the holiday market without a doubt
0:30:00 > 0:30:03and I think people will spend some happy times here.
0:30:03 > 0:30:05But will Martin be happy with the returns?
0:30:05 > 0:30:08With the main holiday months being July and August,
0:30:08 > 0:30:11what sort of rental income could he except for that eight-week period?
0:30:13 > 0:30:20For the holiday letting season,
0:30:16 > 0:30:20peak season, I would guesstimate, £850-£900 per week.
0:30:20 > 0:30:22I think peak season for a place like this,
0:30:22 > 0:30:25you've got to be looking around £800 a week for.
0:30:25 > 0:30:27That's much more than I expected,
0:30:27 > 0:30:30I'm very impressed with that, yes. That's excellent.
0:30:31 > 0:30:37Those figures could give Martin an income of £6,400-£7,200,
0:30:37 > 0:30:39for a fully booked, eight-week period.
0:30:40 > 0:30:43The estate agents reckon that during the low season,
0:30:43 > 0:30:45Martin could rent this out as a six-month tenancy
0:30:45 > 0:30:50for £700-£750 per calendar month.
0:30:50 > 0:30:53The returns make this an attractive business venture.
0:30:53 > 0:30:57So, bearing in mind Martin's total spend of around £177,000,
0:30:57 > 0:30:59what could a resale achieve?
0:31:00 > 0:31:06I would project a valuation in the region of £235,000-£240,000.
0:31:06 > 0:31:08Market value for something like this at the moment?
0:31:08 > 0:31:10In today's climate,
0:31:10 > 0:31:14I would imagine somewhere around the £235,000 to possibly £245,000.
0:31:14 > 0:31:17Well, that's brilliant. I'm really surprised and pleased at that.
0:31:17 > 0:31:20That's excellent, thank you, yes. That's good.
0:31:20 > 0:31:22Well, that's a potential pre-tax profit
0:31:22 > 0:31:25of between £58,000 and £68,000.
0:31:25 > 0:31:27So this property looks like giving Martin a good return,
0:31:27 > 0:31:31whether as a holiday let or as a resale.
0:31:37 > 0:31:41Mousehole looks like it will be Martin and his wife's regular holiday destination
0:31:41 > 0:31:45as they plan to sell off their other holiday let on the Lizard.
0:31:45 > 0:31:47So they can enjoy, not only Cornwall,
0:31:47 > 0:31:49but also their new cottage.
0:31:50 > 0:31:53It has been a really enjoyable experience.
0:31:53 > 0:31:56There have been some down days, but over all I've really enjoyed it
0:31:56 > 0:31:58and I'm really pleased with the outcome.
0:32:03 > 0:32:05I'm visiting Newcastle Upon Tyne.
0:32:05 > 0:32:08MUSIC: "Fog On The Tyne" by Lindisfarne
0:32:08 > 0:32:11Home of the Tyne bridge, and a well known brown ale,
0:32:11 > 0:32:14and with a reputation for a lively nightlife.
0:32:14 > 0:32:16# Fog on the Tyne is all mine, all mine
0:32:16 > 0:32:18# Fog on the Tyne is all mine. #
0:32:18 > 0:32:21I'm viewing a property just over a mile from the city centre.
0:32:21 > 0:32:24Well, this area of Newcastle is called Howdon,
0:32:24 > 0:32:26very popular with investors
0:32:26 > 0:32:31and the property I'm here to see might just suit perfectly.
0:32:31 > 0:32:35Guide price was £25,000.
0:32:35 > 0:32:40It's a three-bedroom, first-floor flat, but 25,000?
0:32:40 > 0:32:41What's it like?
0:32:45 > 0:32:47The flat looks in good condition from the front,
0:32:47 > 0:32:51it's already got UPVC double glazing,
0:32:51 > 0:32:55and there's a long lease of 125 years, so no issues there.
0:32:57 > 0:33:00It's hard to really figure out how you're going
0:33:00 > 0:33:03to squeeze three bedrooms into a property like this,
0:33:03 > 0:33:05because from the front it doesn't look that big.
0:33:05 > 0:33:08But let's see how it has been down.
0:33:08 > 0:33:10Decent-size landing area here.
0:33:10 > 0:33:14Two bedrooms at the front, a good-size double and a single.
0:33:14 > 0:33:16Through into this room here,
0:33:16 > 0:33:19which I suppose is the transition room for the property,
0:33:19 > 0:33:21from the front to the back.
0:33:21 > 0:33:23And as such, lots of doors.
0:33:23 > 0:33:25Another bedroom there.
0:33:25 > 0:33:27I think this could end up being a bit of a corridor room,
0:33:27 > 0:33:30I suppose intrinsically it is your living room area.
0:33:30 > 0:33:32Certainly there's nothing else.
0:33:32 > 0:33:35But it's down here into the kitchen.
0:33:35 > 0:33:39I can't believe this, it's a terraced house, for goodness sake,
0:33:39 > 0:33:41and it just keeps going on and on and on...
0:33:41 > 0:33:45This is the kitchen...needs a good clean up.
0:33:45 > 0:33:47Whether it needs replacing or not I don't know.
0:33:47 > 0:33:51A few hours of spit and polish on there might sort it out.
0:33:51 > 0:33:53A new cooker would certainly help.
0:33:53 > 0:33:55And then through to the bathroom at the back.
0:33:55 > 0:33:57Again it's just on that fringe
0:33:57 > 0:33:59of whether or not it needs to be replaced.
0:33:59 > 0:34:01Some stairs down there.
0:34:01 > 0:34:03So I mean, all in all,
0:34:03 > 0:34:05what a surprise!
0:34:05 > 0:34:07# Well, surprise, surprise
0:34:09 > 0:34:12# Yeah, surprise Surprise, surprise... #
0:34:12 > 0:34:16Well this flat that was guided at £25,000,
0:34:16 > 0:34:19may be a great size for the money, but it's not completely perfect.
0:34:21 > 0:34:24There are signs of water damage on some of the ceilings,
0:34:24 > 0:34:27and there are a few dangerous sockets
0:34:27 > 0:34:28which will need to be checked out.
0:34:28 > 0:34:32Down the stairs at the rear of the flat there's access to the back yard
0:34:32 > 0:34:34that's shared with the downstairs flat.
0:34:35 > 0:34:38And with access from this rear alley.
0:34:38 > 0:34:41So I reckon this property was a pretty good buy.
0:34:43 > 0:34:45# Surprise, surprise, surprise. #
0:34:45 > 0:34:46This place really does throw up
0:34:46 > 0:34:48a few basic principles of property investment.
0:34:48 > 0:34:53Let's say you bought this for the guide price of £25,000
0:34:53 > 0:34:58and you got say £300 a month rent from it, that's £3,600 a year.
0:34:58 > 0:35:01That's around about a 14.5% yield.
0:35:01 > 0:35:03That's fantastic in its own right.
0:35:03 > 0:35:05It doesn't extrapolate up though.
0:35:05 > 0:35:09If you were to buy a house for ten times as much - £250,000,
0:35:09 > 0:35:12you're not going to get ten times as much rent.
0:35:12 > 0:35:15So you'd be much better off buying ten of these,
0:35:15 > 0:35:21getting yourself £36,000 a year in rent, I mean that's good news.
0:35:21 > 0:35:23You can see why people do it.
0:35:23 > 0:35:25# The best things in life are free
0:35:25 > 0:35:28# You can give that to the birds and bees
0:35:28 > 0:35:30# But give me money
0:35:30 > 0:35:32# That's what I want
0:35:32 > 0:35:34# That's what I want. #
0:35:34 > 0:35:37Of course, properties often sell for more than their guide price,
0:35:37 > 0:35:40and I haven't included the cost of the renovation.
0:35:40 > 0:35:42That wouldn't be much in this case,
0:35:42 > 0:35:46but even so I reckon this is a nugget of a buy to let.
0:35:46 > 0:35:49Time to get a second opinion about the potential profits here,
0:35:49 > 0:35:54and ask a local estate agent what he thinks of the place.
0:35:54 > 0:35:57It's a fairly standard layout for an upper flat in the area.
0:35:57 > 0:35:59It does need some renovation, I think.
0:35:59 > 0:36:03There's a combination boiler, it's fully double glazed,
0:36:03 > 0:36:05so I would have said a lot of the fundamental jobs
0:36:05 > 0:36:09have already been done, it just needs tidying up.
0:36:09 > 0:36:13But what is the flat worth in terms of rental return?
0:36:13 > 0:36:16I would expect that the landlord would be able to realise
0:36:16 > 0:36:19something in the region of £400 per calendar month for this property.
0:36:20 > 0:36:22Well, that's even better than I thought.
0:36:22 > 0:36:25So you could be quids in on the rental market.
0:36:25 > 0:36:28But what's the lie of the land on the resale market?
0:36:30 > 0:36:34Depending on the quality of the refurbishment,
0:36:34 > 0:36:36I think that the vendor could expect
0:36:36 > 0:36:39something in the region of £40,000 as a resale value.
0:36:40 > 0:36:44Well, this really is a truly spectacular flat for the money.
0:36:44 > 0:36:47And for anything like the guide price
0:36:47 > 0:36:49this really is a fantastic investment.
0:36:49 > 0:36:52Let's see who spotted it when it went under the hammer.
0:36:52 > 0:36:53Lot number seven.
0:36:53 > 0:36:57It's a three-bedroom, first-floor flat.
0:36:57 > 0:36:59Should provide a good rental opportunity.
0:36:59 > 0:37:02We've got it advertised in the price guide at £25,000.
0:37:02 > 0:37:05How about 23 to start?
0:37:05 > 0:37:0619?
0:37:06 > 0:37:1019,000? Left-hand side - 19,000 bid.
0:37:10 > 0:37:12Can I have 20,000 anywhere else?
0:37:12 > 0:37:1420,000 bid.
0:37:14 > 0:37:1621? 21?
0:37:17 > 0:37:1921 bid. 22?
0:37:19 > 0:37:2223? 23 bid.
0:37:22 > 0:37:2324.
0:37:23 > 0:37:2623 and a half, 24?
0:37:26 > 0:37:2924 bid. 24 and a half?
0:37:29 > 0:37:3225? 25 and a half?
0:37:32 > 0:37:35It's the gentleman sitting at 25,250.
0:37:36 > 0:37:3825,250. 25 and a half?
0:37:40 > 0:37:41You're going to lose for 250.
0:37:42 > 0:37:44£25,250, it's your last chance.
0:37:44 > 0:37:48I'm going to sell. At 25,250.
0:37:48 > 0:37:52Selling it once, I'm selling it for the second time at 25,250.
0:37:53 > 0:37:58Sold, gentleman on the left-hand side, at £25,250.
0:37:58 > 0:38:01That final bid of £25,250
0:38:01 > 0:38:03was made by Schweb,
0:38:03 > 0:38:06who's based in Gateshead.
0:38:06 > 0:38:09He's bought this Tyneside flat as an investment property
0:38:09 > 0:38:14to add to the extensive portfolio side of his family business.
0:38:14 > 0:38:17I met up with him to hear about the plans.
0:38:18 > 0:38:21- Schweb! Good to meet you. - Yes, very nice to see you.
0:38:21 > 0:38:22Congratulations,
0:38:22 > 0:38:26that's a great amount of money to pay for this, isn't it?
0:38:27 > 0:38:29Yeah, I was really pleased with it.
0:38:29 > 0:38:34I was expected to pay about £30,000 for a flat of this size in this area,
0:38:34 > 0:38:39but we achieved it at 25,250, which was very good.
0:38:39 > 0:38:42So, tell me about you, are you a property investor?
0:38:42 > 0:38:43Or is this for yourself, or what?
0:38:43 > 0:38:47I'm a property investor, I'm a chartered surveyor by profession.
0:38:47 > 0:38:52I came into the family business and I'm in business with my two brothers.
0:38:52 > 0:38:55We've got a wholesale business and a retail business,
0:38:55 > 0:38:58but I mainly look after the property.
0:38:58 > 0:39:01In the sense of the general management and the running of it.
0:39:01 > 0:39:02Getting the works done,
0:39:02 > 0:39:07getting the tenants in and whatever have you, but it's all overseen.
0:39:07 > 0:39:11My brothers are older than me and they always have that upper hand
0:39:11 > 0:39:14and obviously they've got to oversee everything that I'm doing.
0:39:16 > 0:39:18Schweb actually became a chartered surveyor
0:39:18 > 0:39:20on the advice of his brothers.
0:39:20 > 0:39:24When he was 16, his older brothers developed a property
0:39:24 > 0:39:28and suggested it would be a good business for him to get into,
0:39:28 > 0:39:30with the long-term view of developing together
0:39:30 > 0:39:31further done the line.
0:39:32 > 0:39:33And that's what happened.
0:39:33 > 0:39:35After 15 years of property purchasing,
0:39:35 > 0:39:38they've now got a sizeable portfolio.
0:39:39 > 0:39:42We used to invest quite a bit in commercial properties,
0:39:42 > 0:39:44and we've got a decent-sized portfolio,
0:39:44 > 0:39:49but we're not seeing the returns on the commercial side.
0:39:49 > 0:39:53And I feel it's an ideal market for residential at the moment,
0:39:53 > 0:39:57because property prices have come down a good 30-40%
0:39:57 > 0:40:01on second-hand stuff since 2007.
0:40:03 > 0:40:08And in the foreseeable future I don't see much increase in...
0:40:08 > 0:40:10the capital values increasing.
0:40:10 > 0:40:13But because you're now buying them at such a cheap rate,
0:40:13 > 0:40:15the income return's a lot better.
0:40:15 > 0:40:16And that's why we've changed tack.
0:40:16 > 0:40:19What was it about this particular place that you liked?
0:40:19 > 0:40:22- It was the price.- Right. - It was the price.- That was it?
0:40:22 > 0:40:24Very much so, yeah.
0:40:24 > 0:40:26That was really it.
0:40:26 > 0:40:27So, for Schweb and his brothers,
0:40:27 > 0:40:29buying property is all about the numbers
0:40:29 > 0:40:33and for the price they got this flat at,
0:40:33 > 0:40:36the numbers look pretty healthy.
0:40:36 > 0:40:39So tell me what you're going to do to sort it out.
0:40:39 > 0:40:42As soon as we've purchased it we've had roof repairs done,
0:40:42 > 0:40:44because there was literally gaping holes in the roof.
0:40:44 > 0:40:45So we've had the roof done.
0:40:45 > 0:40:50There'll be a bit of re-plastering where required.
0:40:50 > 0:40:53And then really it's cosmetic.
0:40:53 > 0:40:55Redecorating, new flooring.
0:40:57 > 0:41:00Schweb has already got ahead of the game
0:41:00 > 0:41:02by doing the essential repairs to the roof
0:41:02 > 0:41:05and also the chimney stack, as soon as he bought the property.
0:41:06 > 0:41:08The work cost around £400.
0:41:08 > 0:41:11What has he planned for the rest of the flat?
0:41:11 > 0:41:14I was in two minds whether I would change the kitchen and the bathroom,
0:41:14 > 0:41:18but having looked at it again, second time round,
0:41:18 > 0:41:21I think it's all right to leave as it is.
0:41:21 > 0:41:25Right, and it's not going to affect the rent price that much?
0:41:25 > 0:41:28Not enough for the capital value that you've got to spend on that.
0:41:28 > 0:41:32I don't think it'll make much difference on the rent.
0:41:32 > 0:41:36So what's the budget for sorting this out?
0:41:36 > 0:41:38I've bought it for 25,250,
0:41:38 > 0:41:43and I think I'm going to get all of the works done within 4,750.
0:41:43 > 0:41:45- Right.- That's just a ballpark.
0:41:45 > 0:41:49The total spend on this building will be circa £30,000.
0:41:49 > 0:41:53So great return on your investment. And what about timescales?
0:41:53 > 0:41:55Like I said, there's not an awful lot to do,
0:41:55 > 0:41:58so I would have thought about two to three weeks
0:41:58 > 0:42:00it should be in a let-able condition.
0:42:00 > 0:42:02- Then get somebody in? - Absolutely, as quick as possible.
0:42:02 > 0:42:04That's the name of the game.
0:42:04 > 0:42:06Well, congratulations. Good luck with it.
0:42:06 > 0:42:09- I really look forward to seeing how you get on.- Yeah, thanks.
0:42:11 > 0:42:15So, not an emotional purchase for Schweb, it's all about the money.
0:42:15 > 0:42:19And when it comes to that this place certainly stacks up.
0:42:19 > 0:42:21How will he get on sorting it out?
0:42:21 > 0:42:24You can find out later in the show.
0:42:27 > 0:42:31Doing up property always takes longer than you think.
0:42:31 > 0:42:34Yes, there are all sorts of reasons why delays happen.
0:42:34 > 0:42:37So have our buyers on today's show raced ahead,
0:42:37 > 0:42:39or have they got held up?
0:42:39 > 0:42:40Let's find out.
0:42:42 > 0:42:45Earlier in the programme, in Edmonton, north London,
0:42:45 > 0:42:47firework salesman Ray and his wife, Diana,
0:42:47 > 0:42:50who runs a fancy dress hire shop,
0:42:50 > 0:42:53bought this two bed mid-terraced house for 186,000.
0:42:53 > 0:42:56£36,000 over the guide price.
0:42:56 > 0:42:59MUSIC: "Come on and Dress Me" by Dr Seuss
0:42:59 > 0:43:02# Come and dress me, dress me in my finest array. #
0:43:02 > 0:43:05The couple live and work in Buckinghamshire.
0:43:05 > 0:43:09It was a joint investment project with their builder friend, Victor,
0:43:09 > 0:43:11who was going to do the majority of the work
0:43:11 > 0:43:13for a 50/50 split of any profits.
0:43:15 > 0:43:18But rocket man Ray got his fingers burnt
0:43:18 > 0:43:21as he hadn't seen inside before he bought it.
0:43:23 > 0:43:25- So you did take a bit of a risk, a huge rick in fact.- Yes.
0:43:25 > 0:43:27Especially as we looked at the brochure
0:43:27 > 0:43:29and it didn't mention a bathroom.
0:43:29 > 0:43:31I thought, "That must be a typo."
0:43:31 > 0:43:33But it wasn't.
0:43:33 > 0:43:36Well, seven and a half months have passed
0:43:36 > 0:43:40and it's Ray we meet up with back at the house.
0:43:40 > 0:43:44The first thing I want to know is, where did they put the bathroom?
0:43:44 > 0:43:46And the answer..?
0:43:46 > 0:43:49In the kitchen, at the back of the house.
0:43:49 > 0:43:54It's been tiled from floor to ceiling, with a fresh-white suite.
0:43:54 > 0:43:56And remember that shower in the kitchen?
0:43:56 > 0:43:59Well, now there's a washing machine in the bathroom,
0:43:59 > 0:44:03keeping some quirks alive and well in this property.
0:44:03 > 0:44:05But what about the kitchen?
0:44:07 > 0:44:10Well, that's been relocated to the former lean-to area,
0:44:10 > 0:44:12where the outside loo was.
0:44:14 > 0:44:18An interesting solution, but one that seems to work, as Ray explains.
0:44:20 > 0:44:23Well, at the back of the house, this used to be a window.
0:44:23 > 0:44:25We took the window out,
0:44:25 > 0:44:28knocked down the wall, re-levelled the floor and tiled in there.
0:44:28 > 0:44:31Knocked down the wall on the right-hand side,
0:44:31 > 0:44:34and moved it back a metre, so we could then have a bigger kitchen,
0:44:34 > 0:44:39and move the toilet into the next room, which is now the bathroom.
0:44:39 > 0:44:41Because there wasn't one at all,
0:44:41 > 0:44:44and so now we have the bathroom over here,
0:44:44 > 0:44:47and we tiled two walls, put the heated towel rail.
0:44:47 > 0:44:50We're very pleased with the bathroom.
0:44:50 > 0:44:53Of course there wasn't one at all, so anything is better than nothing.
0:44:53 > 0:44:55But I'm very pleased with what we've done and it looks very nice.
0:44:56 > 0:44:59The new doors in the kitchen
0:44:59 > 0:45:01have smartened up the appearance outside as well,
0:45:01 > 0:45:04where the garden has also been tidied up.
0:45:06 > 0:45:10Back inside - the large open plan living room
0:45:10 > 0:45:12has seen the magnolia roller.
0:45:12 > 0:45:14A feature wall has been added,
0:45:14 > 0:45:18and the walls have been contrasted with a coffee-coloured carpet.
0:45:19 > 0:45:21The house has new central heating,
0:45:21 > 0:45:24and Ray and Victor have replaced the gas fire.
0:45:24 > 0:45:28But Ray soon discovered the place needed a lot of attention
0:45:28 > 0:45:31before any paint could be applied.
0:45:32 > 0:45:36Once we stripped the property, we found that most of the walls
0:45:36 > 0:45:40and most of the ceilings needed re-plastering.
0:45:40 > 0:45:44My friend is a plasterer, and so he did all the plastering.
0:45:46 > 0:45:49Upstairs the colour scheme continues in the two bedrooms.
0:45:53 > 0:45:57The large fitted wardrobe in the master bedroom remains.
0:45:57 > 0:45:59The work's taken almost eight months.
0:45:59 > 0:46:02Ray's business partner, Victor, worked most days
0:46:02 > 0:46:05and his wife, Diana, helped out at the weekends.
0:46:05 > 0:46:08But Ray was taken ill, and ended up in hospital,
0:46:08 > 0:46:10and has only been back in the last month.
0:46:12 > 0:46:16Travelling from Buckinghamshire to Edmonton has been a problem.
0:46:16 > 0:46:20I've learnt, with this one, not to be quite so far away.
0:46:20 > 0:46:25It's just cost-prohibitive to make the journey back and forth.
0:46:25 > 0:46:27The solution Ray came up with
0:46:27 > 0:46:29for the lack of a bathroom certainly works.
0:46:29 > 0:46:33But the kitchen does feel a little like it's in a temporary structure.
0:46:35 > 0:46:37We did think of the idea of having an extension.
0:46:37 > 0:46:39But it wouldn't have been cost-effective.
0:46:41 > 0:46:44As so often, it comes down to money. How much has the work cost here?
0:46:46 > 0:46:50I said I had a budget of £20,000,
0:46:50 > 0:46:53and we've done it all for under eight.
0:46:53 > 0:46:55Well, that's good news.
0:46:55 > 0:46:58It's down to Ray and his building partner, Victor,
0:46:58 > 0:47:00doing the majority of the work.
0:47:00 > 0:47:04With the 186,000 that Ray paid at the auction,
0:47:04 > 0:47:09it takes his total expenditure to about 194,000.
0:47:09 > 0:47:14Time to see what two local estate agents think of the finished result.
0:47:14 > 0:47:16The standard of work is good.
0:47:16 > 0:47:19And it's been refurbished with colours which are very neutral.
0:47:19 > 0:47:22Which makes the rooms look bigger than they actually are.
0:47:22 > 0:47:24The location of the bathroom is good.
0:47:24 > 0:47:25Ideally it would be better upstairs,
0:47:25 > 0:47:27but it works well being next to the kitchen.
0:47:27 > 0:47:30There are some buyers who will say from the offset
0:47:30 > 0:47:32that they don't want a ground floor bathroom.
0:47:32 > 0:47:33So obviously this will rule them out
0:47:33 > 0:47:35of coming to have a look at this property.
0:47:35 > 0:47:39Ray intends to sell the house, hopefully making a profit,
0:47:39 > 0:47:40and move on to another project.
0:47:40 > 0:47:44But just out of interest, how much rental income could it generate?
0:47:44 > 0:47:46I would expect the property to achieve in rent,
0:47:46 > 0:47:49around £1,000 per calendar month.
0:47:49 > 0:47:51If I was to put the property up on the rental market,
0:47:51 > 0:47:53it would go for £1,100 per calendar month.
0:47:55 > 0:47:58Those rents would produce a yield of between six and seven per cent,
0:47:58 > 0:48:00what does Ray think of that?
0:48:00 > 0:48:03I'm not really looking into the rental market.
0:48:03 > 0:48:07If it works out I do go then 1,100 a month would help to pay the bills.
0:48:07 > 0:48:10What do the estate agents think the house is worth now?
0:48:10 > 0:48:14Any more than the £194,000 Ray has invested?
0:48:15 > 0:48:17I would expect the property to achieve a figure
0:48:17 > 0:48:22in the region of £195,000 in the current market.
0:48:22 > 0:48:23If I was to put the property up for sale,
0:48:23 > 0:48:25I would put it on the market for £210,000.
0:48:25 > 0:48:30Those valuations would generate a gross profit,
0:48:30 > 0:48:33before the usual selling expenses, of between one and 16,000.
0:48:33 > 0:48:35Quite a variation.
0:48:36 > 0:48:38Ooh, that is quite different, yes.
0:48:38 > 0:48:43I think that's slightly low, I'd like to get around 220,
0:48:43 > 0:48:46although that's really pushing it, but I've had another agent
0:48:46 > 0:48:49that I've spoken to and he thinks I could realise 215.
0:48:49 > 0:48:53Well, although letting it may seem like a stronger option,
0:48:53 > 0:48:55for this Edmonton property,
0:48:55 > 0:48:59215,000 would give Ray and Diana a profit to split with Victor.
0:48:59 > 0:49:02And considering they bought a house without a bathroom,
0:49:02 > 0:49:06it's perhaps a better situation than he feared.
0:49:06 > 0:49:09It's been a lot of hard work, more than I anticipated,
0:49:09 > 0:49:11but I'm very pleased with the result,
0:49:11 > 0:49:14and hopefully we will finish up making a profit.
0:49:14 > 0:49:16And the lesson learned here, Ray?
0:49:17 > 0:49:22Do your pre-checks and homework and definitely visit the property
0:49:22 > 0:49:25and don't do what I did.
0:49:25 > 0:49:28Which is just walk in and then find there's no bathroom.
0:49:32 > 0:49:36Newcastle, an iconic city - famous for its people, nightlife,
0:49:36 > 0:49:37and the river.
0:49:37 > 0:49:42# Fog on the Tyne Is all mine, all mine... #
0:49:42 > 0:49:44It's where, earlier in the programme,
0:49:44 > 0:49:47we saw how this three-bed, first-floor flat
0:49:47 > 0:49:51in the suburb of Howdon, was bought for £25,250 by Schweb.
0:49:53 > 0:49:56He's a chartered surveyor, and the youngest of three brothers
0:49:56 > 0:50:00who have a family property developing business.
0:50:01 > 0:50:04The place needed some immediate attention.
0:50:05 > 0:50:07As soon as we purchased it we've had roof repairs done
0:50:07 > 0:50:10because there was literally gaping holes in the roof,
0:50:10 > 0:50:13so we've had the roof done, and there'll probably be a bit
0:50:13 > 0:50:18of re-plastering where required now, and then really it's cosmetic.
0:50:18 > 0:50:22So, how's the renovation gone?
0:50:22 > 0:50:26Just one month later we're back to meet Schweb and his son, Mahair,
0:50:26 > 0:50:30who's getting some early insight into the family developing business.
0:50:31 > 0:50:32Let's take a look inside.
0:50:34 > 0:50:37The property has indeed had a full cosmetic makeover.
0:50:39 > 0:50:42In the living room the walls are now hessian coloured,
0:50:42 > 0:50:45complementing the brown carpet that's been laid.
0:50:45 > 0:50:48It matches the one that was already in the small, front bedroom.
0:50:50 > 0:50:52Up in the large master bedroom at the front,
0:50:52 > 0:50:55Schweb has opted for a laminate wood floor.
0:50:55 > 0:50:59So we decided to laminate the floors in the bedroom,
0:50:59 > 0:51:03because we thought that it's easy to manage
0:51:03 > 0:51:06when it comes to cleaning them when tenants leave.
0:51:06 > 0:51:09Rather than having the whole place recarpeted or refloored.
0:51:09 > 0:51:14And the rest of the room we just had decorated,
0:51:14 > 0:51:16standard magnolia in the bedrooms to make it all look nice
0:51:16 > 0:51:18and fresh for the new coming tenant.
0:51:20 > 0:51:23The smaller third bedroom, off the living room,
0:51:23 > 0:51:25has laminate flooring as well.
0:51:28 > 0:51:31But what happened in the kitchen and bathroom?
0:51:32 > 0:51:35I was in two minds whether we should renew the kitchen and the bathroom,
0:51:35 > 0:51:39but it was borderline and we decided just to leave it as it was
0:51:39 > 0:51:42and we've just had both them rooms just decorated.
0:51:42 > 0:51:47Schweb and his brothers have years of buy-to-let experience,
0:51:47 > 0:51:51so know how important it is to maximise the return they achieve.
0:51:51 > 0:51:54So when a kitchen or bathroom doesn't need any work,
0:51:54 > 0:51:55they're happy.
0:51:55 > 0:51:58But the initial repairs to the roof highlighted some other problems,
0:51:58 > 0:52:01which had a big impact on the project.
0:52:02 > 0:52:05# There's a leak in this old building
0:52:05 > 0:52:07# It's leaking all the time
0:52:07 > 0:52:10# Every time it rains
0:52:10 > 0:52:13# It about made me change my mind. #
0:52:13 > 0:52:15The roof needed repairing before I could do any internal works,
0:52:15 > 0:52:17because there was leaks coming through.
0:52:17 > 0:52:22So we got that done, and then chimney stack needed repointing,
0:52:22 > 0:52:25and it was just letting in a whole load of water in the party wall.
0:52:25 > 0:52:28So I had that done by the roofers while they were up there.
0:52:28 > 0:52:31The leaking roof was fixed,
0:52:31 > 0:52:34but the damage it had caused to the party wall
0:52:34 > 0:52:37meant Schweb's tradesmen had to re-plaster.
0:52:37 > 0:52:40But that didn't go as smoothly as he'd hoped.
0:52:40 > 0:52:44So this was the wall that we had to have re-plastered
0:52:44 > 0:52:50because of the leak that we had through the chimney.
0:52:50 > 0:52:53Because we were wanting to get it done as quickly as possible,
0:52:53 > 0:52:56he ended up plastering it that little bit too early,
0:52:56 > 0:52:58didn't let it dry out properly,
0:52:58 > 0:53:01so we had to re-plaster little bits of it again.
0:53:01 > 0:53:02But it wasn't too much of a problem.
0:53:02 > 0:53:05Seeing how his dad handles problems like this
0:53:05 > 0:53:09is giving Schweb's son, and young apprentice, Mahair,
0:53:09 > 0:53:11valuable experience in the world of property.
0:53:11 > 0:53:15It's know-how Schweb hopes will come in handy
0:53:15 > 0:53:18if his son joins the family business in future.
0:53:18 > 0:53:21# You don't learn that in school
0:53:21 > 0:53:23# There ain't no doubt about it
0:53:23 > 0:53:25# You don't learn that in school. #
0:53:26 > 0:53:31At times, when Mahair is free, my son, I like to take him with me
0:53:31 > 0:53:35because this is a family business that my father started
0:53:35 > 0:53:40and I'm sure when he's older he'll be stepping into my shoes
0:53:40 > 0:53:44and taking over the business, so I like to teach him at an early stage.
0:53:44 > 0:53:48And lesson one is watch your budget.
0:53:48 > 0:53:52# What did you learn in school today... #
0:53:52 > 0:53:54How have the numbers stacked up here?
0:53:54 > 0:53:56I'd budgeted about £1,750,
0:53:56 > 0:54:00but it turned out that we actually came under budget,
0:54:00 > 0:54:02even though there was a couple of little extra things to do.
0:54:02 > 0:54:07The roof repairs along with the chimney stack, came to about £400.
0:54:07 > 0:54:11The recarpeting was about £350,
0:54:11 > 0:54:14and the laminate flooring was about £150.
0:54:14 > 0:54:18The rest, to make it up to about £1,200 total costs,
0:54:18 > 0:54:19was the decorating.
0:54:20 > 0:54:22That £1,200 spend,
0:54:22 > 0:54:26on top of the £25,250 purchase price,
0:54:26 > 0:54:31takes the total outlay to 26,450 quid.
0:54:31 > 0:54:33And there's more good news.
0:54:33 > 0:54:38We've actually managed to get it let out today,
0:54:38 > 0:54:40to a young gentleman,
0:54:40 > 0:54:43and he's looking to move in at the beginning of the month.
0:54:44 > 0:54:47We invited two local estate agents to come and look around
0:54:47 > 0:54:51to hear their thoughts on this three-bedroom flat.
0:54:51 > 0:54:54The property's been done up to a nice rentable standard.
0:54:54 > 0:54:58I feel he could have taken a little bit more attention to detail
0:54:58 > 0:55:01in the bathroom, but overall a good, rentable standard.
0:55:01 > 0:55:04The property has been refurbished to a reasonable standard throughout,
0:55:04 > 0:55:06with new carpets, fresh decorated,
0:55:06 > 0:55:08and a well presented kitchen and bathroom.
0:55:08 > 0:55:10Schweb has a tenant lined up,
0:55:10 > 0:55:13but how much could he expect to achieve if he decided to sell?
0:55:13 > 0:55:18More than the £26,450 invested here?
0:55:18 > 0:55:21If I was looking to bring this property on the market for sale,
0:55:21 > 0:55:23I would recommend an asking price of £50,000.
0:55:23 > 0:55:25If I was going to market this property for sale,
0:55:25 > 0:55:27I would recommend an initial asking price
0:55:27 > 0:55:29of offers in the region of £45,000.
0:55:30 > 0:55:33Those valuations would produce a gross profit,
0:55:33 > 0:55:34before tax and expenses,
0:55:34 > 0:55:37of between £18,550
0:55:37 > 0:55:40and £23,550 in just four weeks.
0:55:43 > 0:55:46I'm absolutely over the moon with that.
0:55:46 > 0:55:50It's a considerable mark-up from what we've purchased it at,
0:55:50 > 0:55:53and the money that we've spent on it.
0:55:53 > 0:55:54That's absolutely excellent.
0:55:54 > 0:55:57Schweb's got a tenant,
0:55:57 > 0:56:02but how much rental income would the estate agents suggest he charges?
0:56:02 > 0:56:04If I was going to rent this property,
0:56:04 > 0:56:07I would expect to achieve £375 per calendar month.
0:56:07 > 0:56:10If I was putting this property on the rental market,
0:56:10 > 0:56:11I would expect to achieve
0:56:11 > 0:56:13a figure in the region of £395 per calendar month.
0:56:15 > 0:56:20That range of rental incomes from £375 a month,
0:56:20 > 0:56:24which Schweb is actually charging, to £395 a month,
0:56:24 > 0:56:28would generate a tremendous yield between 17 and 18%.
0:56:29 > 0:56:32Again, I'm over the moon with that.
0:56:32 > 0:56:35Absolutely excellent return on what we've paid.
0:56:35 > 0:56:38I wouldn't get that in the bank these days, would we?
0:56:38 > 0:56:41Most importantly we've actually got the property let,
0:56:41 > 0:56:43which didn't take the agents long at all,
0:56:43 > 0:56:45so there won't be much of a void
0:56:45 > 0:56:48and I'll probably get a pat on my back from my brothers.
0:56:50 > 0:56:53Well that's it for now, we'll have more thrills and spills
0:56:53 > 0:56:56from the auction rooms for you next time.
0:56:56 > 0:56:58So make sure you keep watching Homes Under The Hammer.
0:56:58 > 0:57:00- We'll see you then.- Goodbye.- Bye.
0:57:03 > 0:57:06Subtitles by Red Bee Media Ltd