0:00:02 > 0:00:06- Hello!- They say that every house tells a story, and over the years,
0:00:06 > 0:00:09Lucy and I have certainly found that to be true.
0:00:09 > 0:00:12That's right. There are tales to tell and secrets to uncover,
0:00:12 > 0:00:15when you buy your home under the hammer.
0:00:40 > 0:00:45Well, properties at auction are bought on a "buyer beware" basis.
0:00:45 > 0:00:49Yes, it's up to you to check out everything before you place your bid.
0:00:49 > 0:00:52Or you could be in for some nasty surprises.
0:00:52 > 0:00:56Let's see if our buyers got lucky with their purchases.
0:00:57 > 0:01:00This plot of land in South Wales meant an early finish to my day.
0:01:03 > 0:01:06Right, that's the end of the feature!
0:01:06 > 0:01:08In Gainsborough, Lincolnshire,
0:01:08 > 0:01:11someone has been extremely inventive with space.
0:01:11 > 0:01:17This area is a real bonus, an addition I like.
0:01:17 > 0:01:20And in Plymouth, it's time to face up to potential problems.
0:01:20 > 0:01:23So there's an issue with negotiating
0:01:23 > 0:01:25and talking to whoever owns it to sort it out.
0:01:25 > 0:01:27Either way, it's got to be done.
0:01:29 > 0:01:34All these properties were sold at auction. We'll find out who bought them and how much they paid for them
0:01:34 > 0:01:35when they went under the hammer.
0:01:35 > 0:01:37Sold!
0:01:47 > 0:01:51This is Penarth on the north shore of the Severn estuary.
0:01:51 > 0:01:53It was once a busy working docks,
0:01:53 > 0:01:56but Penarth is now a popular Welsh seaside town
0:01:56 > 0:02:00with its own marina and some rather grand Victorian residences.
0:02:00 > 0:02:05The auction property I'm here to see is just one mile from the town centre.
0:02:05 > 0:02:08Well, this isn't quite Penarth. This is Cogan.
0:02:08 > 0:02:11But hopefully it will benefit from the proximity.
0:02:11 > 0:02:15What am I here to see? Some Victorian pile, maybe a seaside cottage?
0:02:15 > 0:02:18Not quite. It is actually...
0:02:18 > 0:02:19this bit of land.
0:02:19 > 0:02:22Let me take you on a guided tour.
0:02:22 > 0:02:25Well, it goes over there, it has that wall,
0:02:25 > 0:02:28it has this other wall and then the railings.
0:02:28 > 0:02:3012 metres square in total.
0:02:32 > 0:02:35Right, that's the end of the feature!
0:02:35 > 0:02:38WIND HOWLS
0:02:42 > 0:02:46Actually, only kidding. There is a little bit more to say.
0:02:46 > 0:02:48Let's analyse it as a building plot.
0:02:48 > 0:02:50First of all, it's flat, which is good news.
0:02:50 > 0:02:52There is electricity very close by.
0:02:52 > 0:02:55That telegraph post has an electric cable on the top of it.
0:02:55 > 0:03:01So that is good news. It's got a lowered kerb just outside there so vehicle access is good.
0:03:01 > 0:03:05Don't know about sewerage, don't know about water, don't know about gas.
0:03:05 > 0:03:07But hopefully, they are in the vicinity.
0:03:07 > 0:03:11But the best thing - it has got planning permission
0:03:11 > 0:03:14for the construction of either a house or two flats.
0:03:14 > 0:03:17It is only outline planning permission at this stage,
0:03:17 > 0:03:21but at least they have agreed in principle that something can be built here.
0:03:21 > 0:03:24# High Street heaven
0:03:24 > 0:03:27# High Street sweet heaven
0:03:27 > 0:03:31# High Street heaven... #
0:03:31 > 0:03:33With an auction guide price of 35,000,
0:03:33 > 0:03:36I'd say there could be money to be made here.
0:03:36 > 0:03:39Outline planning permission means there are still a few hoops
0:03:39 > 0:03:41to jump through, and nothing is a foregone conclusion
0:03:41 > 0:03:43when it comes to planning.
0:03:43 > 0:03:46We invited a local estate agent along to hear
0:03:46 > 0:03:48his views on the best use of this plot.
0:03:51 > 0:03:56The plot is quite small, but it is unusual,
0:03:56 > 0:03:59because in this village, most of these houses are mid-terraced
0:03:59 > 0:04:02and this is a stand-alone detached plot, which is quite unique.
0:04:02 > 0:04:06So it does present quite a good opportunity for a developer.
0:04:06 > 0:04:10I believe that you would be able to build two two-bedroom flats,
0:04:10 > 0:04:12or a three-bed detached house.
0:04:12 > 0:04:16It does depend on the circumstances of the developer.
0:04:16 > 0:04:22If it were a developer looking to buy and sell on, I would recommend that the house is built
0:04:22 > 0:04:26because of being a detached house in this area.
0:04:26 > 0:04:28However, were it a long-term investor,
0:04:28 > 0:04:32I would recommend that the two flats were built for income purposes.
0:04:38 > 0:04:41So, if we look at this as a long-term investment,
0:04:41 > 0:04:44what sort of rental income could you achieve?
0:04:44 > 0:04:47This is a very desirable area to rent
0:04:47 > 0:04:51both for apartments and for family houses.
0:04:51 > 0:04:55A three-bedroom detached property would achieve a rental income
0:04:55 > 0:04:59of between £700 and £750 a month.
0:04:59 > 0:05:04A two-bedroom apartment would achieve a rental income of between £500 and £550 a month.
0:05:04 > 0:05:07What about potential sell-on values?
0:05:08 > 0:05:11If the apartments were built to a very high standard,
0:05:11 > 0:05:18you would achieve a price of between £95,000 and £110,000 for the apartments.
0:05:18 > 0:05:22If a three-bedroom house, detached property was built here,
0:05:22 > 0:05:27I would suggest in the region of probably £165,000, £170,000.
0:05:28 > 0:05:33So it would appear that building two flats could be the most lucrative option.
0:05:33 > 0:05:37That makes that £35,000 guide price sound all the more attractive.
0:05:40 > 0:05:44So will it be flats or a house that is eventually built on this little plot of land?
0:05:44 > 0:05:49Well, I guess that is down to the owner who bought it when it went to auction.
0:05:49 > 0:05:52Good spot there, level site, ladies and gentlemen,
0:05:52 > 0:05:55amidst retail and residential properties.
0:05:55 > 0:05:59Approximately a mile to the east of Penarth town centre.
0:05:59 > 0:06:04We have a proxy bid on this particular lot, ladies and gentlemen.
0:06:04 > 0:06:08So I'm going to start with the proxy bid on my reserve,
0:06:08 > 0:06:12selling all the time then, at £38,000.
0:06:12 > 0:06:15I have a bid of 38,000, I'm selling all the time at 38,000.
0:06:15 > 0:06:20I will take a half if you like. At £38,000. A half?
0:06:20 > 0:06:25Thank you. 39 from my proxy.
0:06:25 > 0:06:2839,500 can I for you, sir? 39,500.
0:06:28 > 0:06:32My proxy bid is in at 40,000. Half if you like, sir.
0:06:32 > 0:06:37At £40,000, my proxy bidder, I'm selling all the time. Half?
0:06:37 > 0:06:3940,500.
0:06:39 > 0:06:43My proxy bidder is finished and out. I'm selling, and it is your bid, sir.
0:06:43 > 0:06:46At £40,500.
0:06:46 > 0:06:51At £40,500, have you all done? There is the bid.
0:06:51 > 0:06:53Shout if I'm missing you.
0:06:53 > 0:06:56Have you all done, then? At £40,500.
0:06:56 > 0:06:59Yours, sir. Thank you very much. Your number, please?
0:07:04 > 0:07:08That successful bid of 40,500 was made by 26-year-old plumber Matt,
0:07:08 > 0:07:12who was at the auction with his builder dad, Phil.
0:07:12 > 0:07:15He has five other investment properties.
0:07:15 > 0:07:17I met up with the father and son duo at Matt's home
0:07:17 > 0:07:21ten minutes' drive away from their purchase.
0:07:21 > 0:07:23- Good to meet you both.- And you.
0:07:23 > 0:07:26Congratulations! You've got yourselves a plot of land.
0:07:26 > 0:07:27Explain to me why we met here.
0:07:27 > 0:07:30We built this house a few years ago - me and my dad.
0:07:30 > 0:07:34We're deciding to... With the new plot of land we've just bought now,
0:07:34 > 0:07:37keep it in a similar setup to this kind of thing.
0:07:37 > 0:07:43- So, you actually built this from... - From nothing, yeah.- Wow!
0:07:43 > 0:07:46You've done a fantastic job of making it look very similar
0:07:46 > 0:07:47to the neighbouring properties.
0:07:47 > 0:07:52We tried to keep it to the same standard as was here before,
0:07:52 > 0:07:56so, obviously, we pebble-dashed it the same as next door.
0:07:56 > 0:08:00The same type of roof and just took it from there.
0:08:00 > 0:08:02You did a fabulous job! Obviously, father and son.
0:08:02 > 0:08:06Tell me about the relationship - the working relationship.
0:08:06 > 0:08:08I was a builder. I've been a builder for 30 years.
0:08:08 > 0:08:10And I could never get a plumber,
0:08:10 > 0:08:14so I made my son go into the plumbing game.
0:08:14 > 0:08:19Straight from school, I did an apprenticeship and that was it. Yeah.
0:08:19 > 0:08:23- You couldn't get one, so you bred your own.- I did - two.
0:08:23 > 0:08:27- You've got another son?- I have, yeah.- And he's a plumber as well?- He's a plumber.
0:08:27 > 0:08:30Is the property development side of things a sideline
0:08:30 > 0:08:32or is it something you're moving more and more into?
0:08:32 > 0:08:34I've been in it for quite a while.
0:08:34 > 0:08:38It's new to obviously Matthew.
0:08:38 > 0:08:41Now he's standing on his own feet without me.
0:08:41 > 0:08:44# Walking in your footsteps... #
0:08:44 > 0:08:47Matt has followed in his father's footsteps
0:08:47 > 0:08:49into the property business.
0:08:49 > 0:08:52He has a portfolio of five investment properties under his belt
0:08:52 > 0:08:57already, so it's clearly not been too bad a path to follow.
0:08:57 > 0:08:59So, let's talk about the plot you bought then.
0:08:59 > 0:09:02Why that particular plot?
0:09:02 > 0:09:06It's an area I know. I went to school, I've got friends down there.
0:09:06 > 0:09:09It's an area I do know. I seen the plot of land come up,
0:09:09 > 0:09:12I noticed it and thought I'd have a go and see if I could get it.
0:09:12 > 0:09:13I got it at the right price.
0:09:13 > 0:09:16So, tell me what you're helping to build?
0:09:16 > 0:09:18It's got outline planning for a house or flat.
0:09:18 > 0:09:21We're looking to build a two-bedroom flat on it.
0:09:21 > 0:09:24Obviously, we're just waiting now for drawings to be done.
0:09:24 > 0:09:27If it's feasible to build two two-bedrooms, that's what we'll do.
0:09:27 > 0:09:31Talk me through the numbers, then. You got it for 40,500.
0:09:31 > 0:09:35- That's right.- How much do you think it will cost to build what you need?
0:09:35 > 0:09:39I've budgeted for round about 50,000 to build two flats.
0:09:39 > 0:09:4125 grand a flat?
0:09:41 > 0:09:44That's quite a tight budget, then.
0:09:44 > 0:09:46We built this one for 40,000.
0:09:46 > 0:09:49We're looking keep within this budget here.
0:09:49 > 0:09:52What kind of costs do you think they will have at the end of the day -
0:09:52 > 0:09:55the resale value - if that's what you're planning to do?
0:09:55 > 0:09:58We were told the flat would sell for about £100,000, £110,000 each.
0:09:58 > 0:10:03Fantastic! 220, you've got about 100-ish in it.
0:10:03 > 0:10:07- So, right! Result! - Not too bad, yeah.
0:10:07 > 0:10:09- You'll sell and not rent? - I haven't thought about that.
0:10:09 > 0:10:13The rental would cover and I'd still have money left over
0:10:13 > 0:10:18so I'm still 50/50 on whether I'm going to sell or rent at the moment.
0:10:18 > 0:10:22Presumably the draw of having 110,000 quid in the bank is quite...
0:10:22 > 0:10:25My dad has mentioned something like that to me as well.
0:10:26 > 0:10:29In the end, the temptation to sell might be too great.
0:10:29 > 0:10:32But how easy that may or may not be
0:10:32 > 0:10:37will depend on the market at the time they finish the project.
0:10:37 > 0:10:40So, what kind of timescales have you got for this whole thing?
0:10:40 > 0:10:43We're looking at starting in about a month-and-a-half's time.
0:10:43 > 0:10:46We're looking at a timescale of round about seven to nine months.
0:10:46 > 0:10:50- To finish the building, yeah.- Right.
0:10:50 > 0:10:52Is that doing a lot of work yourself?
0:10:52 > 0:10:56- Yeah.- I'll be the donkey.- Will you?
0:10:56 > 0:11:00So, you'll be involved in the whole thing, will you?
0:11:00 > 0:11:02You'll be overseeing the project, won't you?
0:11:02 > 0:11:04Is he going to pay you?
0:11:04 > 0:11:06- Well...- This is great!
0:11:07 > 0:11:11He'll have something at the end of it, I think!
0:11:11 > 0:11:15Matt, between you and me, when your dad's not listening, will you pay him?
0:11:15 > 0:11:18- I'll look after him. - That's fantastic!
0:11:18 > 0:11:21- Having your dad on hand... - Definitely.
0:11:21 > 0:11:23He done well on this project as well, so, yeah.
0:11:23 > 0:11:27- I can trust him, so...- He didn't pay me on this one.- He didn't pay you?
0:11:27 > 0:11:31- I guess it's a great thing to be able to do to help him, isn't it? In all honesty.- I'm OK.
0:11:31 > 0:11:37I don't really depend on the building, so, it's not too bad.
0:11:37 > 0:11:39Listen, congratulations! Good luck.
0:11:39 > 0:11:42I look forward to seeing how you both get on.
0:11:46 > 0:11:49Well, Matthew and Phil have clearly got the experience
0:11:49 > 0:11:50to make a success of this project.
0:11:50 > 0:11:54Remember, the site only currently has outline planning permission
0:11:54 > 0:11:58and to get full planning permission, they may have to jump through hoops.
0:11:58 > 0:12:03When we return, will it be a wasteland or will there be two flats there?
0:12:03 > 0:12:06You can find out later in the show.
0:12:10 > 0:12:12This is Gainsborough -
0:12:12 > 0:12:15a small market town on the River Trent in Lincolnshire.
0:12:15 > 0:12:19In recent years, the riverside has undergone a £20 million programme
0:12:19 > 0:12:24to build new flood defences and a riverside walk.
0:12:25 > 0:12:31In addition, a £39 million shopping centre was built in 2007.
0:12:31 > 0:12:34As I always say, it's wise to buy in an area,
0:12:34 > 0:12:36which is undergoing regeneration,
0:12:36 > 0:12:41and it's not just in the town centre where things are being improved.
0:12:41 > 0:12:43The property we're here to see is literally a bus ride away
0:12:43 > 0:12:45from the town centre.
0:12:45 > 0:12:48It's a mid-terraced Victorian that we're here to see
0:12:48 > 0:12:50and it's on this quiet little road.
0:12:50 > 0:12:53What I've noticed is, there's a lot of building work going on,
0:12:53 > 0:12:56which means houses are being upgraded.
0:12:56 > 0:12:58Always a good sign in my book.
0:12:58 > 0:13:03This property had a guide price of 26,000 to £29,000.
0:13:03 > 0:13:08Yes, you heard me right. £26,000 to £29,000.
0:13:08 > 0:13:13Who said property wasn't affordable these days? I'm going in.
0:13:13 > 0:13:16# This time I'm going in
0:13:16 > 0:13:19# With my eyes open... #
0:13:19 > 0:13:22The exterior of this three-storey house
0:13:22 > 0:13:24could do with a bit of smartening up
0:13:24 > 0:13:26but it appears structurally sound.
0:13:26 > 0:13:30If my eyes don't deceive me, it looks as if there's double glazing.
0:13:30 > 0:13:33Always a bonus when it comes to an auction property.
0:13:33 > 0:13:36Well, these little terraced houses trick you.
0:13:36 > 0:13:39When you step inside, they're enormous.
0:13:39 > 0:13:42This is a great room. You've got a big bay window there,
0:13:42 > 0:13:44letting in lots of light.
0:13:44 > 0:13:47You could put a nice period fireplace there.
0:13:47 > 0:13:49You could really build the character in this room.
0:13:49 > 0:13:52So far, I really like it.
0:13:52 > 0:13:56You know, I still can't get over this space available
0:13:56 > 0:13:59in this property. Second reception room, fantastic!
0:13:59 > 0:14:03Good size, you've got the kitchen here at the back of the property.
0:14:03 > 0:14:06Little door leading out to the garden.
0:14:06 > 0:14:10You'd need to rearrange these units. They're not working for me at the moment.
0:14:10 > 0:14:14You've got this wood cladding along the ceiling. Strip lighting!
0:14:14 > 0:14:19Uh-uh! That has got to go. There's so much you can do to improve this.
0:14:19 > 0:14:23Once all this has come away, and you have central heating installed,
0:14:23 > 0:14:26you will have a fairly decent kitchen.
0:14:26 > 0:14:28Now, this is a bit strange. This is the loo.
0:14:28 > 0:14:30It's at the back of the property.
0:14:30 > 0:14:33It's tiny. It's freezing.
0:14:33 > 0:14:35It's just not working.
0:14:35 > 0:14:37The reason it's not working is
0:14:37 > 0:14:40because this originally would have been the outside wall
0:14:40 > 0:14:44and the loo is just single skin brick.
0:14:44 > 0:14:45That is why it's so cold.
0:14:45 > 0:14:48So, whoever takes this on needs to sort that out.
0:14:48 > 0:14:50You might even be able to have a bit of a bigger WC
0:14:50 > 0:14:54at the end of the property, or even a bathroom. That could work.
0:14:54 > 0:14:57But that all depends on what's happening upstairs,
0:14:57 > 0:14:59so I'm going to check it out.
0:14:59 > 0:15:01Just before I venture upstairs,
0:15:01 > 0:15:05a quick peek out the back reveals a small yard,
0:15:05 > 0:15:07entirely concreted over.
0:15:07 > 0:15:10OK, it's not the prettiest of outdoor spaces and could do
0:15:10 > 0:15:13with some tidying up to make it more attractive, but at least
0:15:13 > 0:15:19there's room to extend the bathroom a little, if that proves necessary.
0:15:23 > 0:15:27So upstairs we've got two bedrooms on this level.
0:15:27 > 0:15:30You could easily call this a double, but what is in here?
0:15:30 > 0:15:34A little cupboard? No! # Da-dah! #
0:15:34 > 0:15:36A pink bathroom!
0:15:36 > 0:15:38In all the years I've worked on this programme,
0:15:38 > 0:15:42I've never, ever seen these little cupboards used for this.
0:15:42 > 0:15:46You can see they've taken a little bit of the next-door cupboard
0:15:46 > 0:15:48to join this space up.
0:15:48 > 0:15:53Sadly, this little bathroom doesn't have a loo and that is probably
0:15:53 > 0:15:56because it'll be hard to get a soil pipe running through
0:15:56 > 0:15:58the centre of this house.
0:15:58 > 0:16:01I would definitely keep that there,
0:16:01 > 0:16:04even have a modern shower room installed, because
0:16:04 > 0:16:09although I now think you definitely need a family bathroom downstairs,
0:16:09 > 0:16:14this area is a real bonus - an addition I like and would keep.
0:16:19 > 0:16:23I'm not normally a fan of downstairs bathrooms,
0:16:23 > 0:16:25but I think adding one here is a necessity,
0:16:25 > 0:16:30especially since you can only access this one through a bedroom - not great for privacy.
0:16:30 > 0:16:34But a bathroom in a cupboard is not the only surprise in store.
0:16:34 > 0:16:38This not-so-little terrace has yet another floor!
0:16:38 > 0:16:40So up here on the top floor,
0:16:40 > 0:16:45it appears that there is a third bedroom, which is brilliant.
0:16:45 > 0:16:49But the auction catalogue described it as just an attic room,
0:16:49 > 0:16:51which set alarm bells ringing.
0:16:51 > 0:16:54Now, it may well be that this conversion was done
0:16:54 > 0:16:57without building regulation approval.
0:16:57 > 0:17:00These days, you don't often need planning permission for a loft conversion,
0:17:00 > 0:17:03but you still need to comply to building regulations.
0:17:03 > 0:17:08These cover things like access to the stairs, fire regulations,
0:17:08 > 0:17:12adequate head height, additional floor joists -
0:17:12 > 0:17:16even these spindles here will probably be a problem.
0:17:16 > 0:17:20It could be that before you can call this officially a bedroom,
0:17:20 > 0:17:23you may have to do some work here to make it compliant.
0:17:25 > 0:17:29We invited a local estate agent along to get his views on what work
0:17:29 > 0:17:32needs to be done to bring this mid-terrace house -
0:17:32 > 0:17:35with a guide price of 26 to 29,000 - up to scratch.
0:17:35 > 0:17:39I would recommend the extension or alteration of the ground floor area
0:17:39 > 0:17:41to the rear aspect
0:17:41 > 0:17:43to include a shower room or bathroom,
0:17:43 > 0:17:46as the main bathroom is situated off the bedroom on the first floor.
0:17:46 > 0:17:49Once refurbished as a three-bedroom house,
0:17:49 > 0:17:53and the attic converted properly, what could the rental value be?
0:17:53 > 0:17:56I believe the property would rent very well once refurbished
0:17:56 > 0:17:59and renovated, and as a three-bedroom house,
0:17:59 > 0:18:04I expect it would achieve around £400-£450 per calendar month.
0:18:06 > 0:18:08And what could it sell for?
0:18:08 > 0:18:10As a three-bedroom property,
0:18:10 > 0:18:14I would expect in the region of £55-£60,000 on the open market.
0:18:16 > 0:18:20Well, there is work to do here, that's for sure.
0:18:20 > 0:18:23It just needs a complete renovation.
0:18:23 > 0:18:26My priorities would be to sort out that downstairs bathroom
0:18:26 > 0:18:30and make sure the attic room is building regs compliant.
0:18:30 > 0:18:34Do all that and you could end up with a really nice three-bedroom house.
0:18:34 > 0:18:36So, who was prepared to take on this task?
0:18:36 > 0:18:39Let's find out when we head to auction.
0:18:39 > 0:18:42And we have lot number 11, two bedrooms upstairs
0:18:42 > 0:18:46and a bathroom with a third bedroom in the attic.
0:18:46 > 0:18:50Guided at 26 to 29,000.
0:18:50 > 0:18:53Who's in, then? 26 to 29. Start me at 25,000.
0:18:53 > 0:18:5625, is it? 20 then.
0:18:56 > 0:19:0018,000. 18, 19, 20,000. At £20,000, I'm bid.
0:19:00 > 0:19:05At 20,000, 21, 22,
0:19:05 > 0:19:0823 for you? 23, 24.
0:19:08 > 0:19:12At £24,000, I'm bid. 24,000, and 500?
0:19:12 > 0:19:16At 24,500, 25,000 now.
0:19:16 > 0:19:21Have you done then at 24,000...? 25. 500 again.
0:19:21 > 0:19:2526 for you, sir? 26. And 500?
0:19:25 > 0:19:28The bid's on the third row.
0:19:28 > 0:19:30£26,000 is it? 500 anywhere?
0:19:30 > 0:19:35It's in the market, going to be sold at £26,000 for the first time,
0:19:35 > 0:19:38for the second. Don't let me miss you. For the third and last time
0:19:38 > 0:19:42at £26,000, any more bids?
0:19:42 > 0:19:44Well done, sir - you've had a go at one or two.
0:19:49 > 0:19:54The successful bid of 26,000 was made by local builder Chris.
0:19:54 > 0:19:56He's a born-and-bred Gainsborough man,
0:19:56 > 0:19:58so should have local knowledge on his side.
0:19:58 > 0:20:01He purchased the house along with his friend David
0:20:01 > 0:20:03as their first business venture together.
0:20:03 > 0:20:06I met up with them to find out more.
0:20:07 > 0:20:10- Guys, it's lovely to meet you, congratulations.- Thank you.
0:20:10 > 0:20:13Tell me what it was like on auction day for you, Chris.
0:20:13 > 0:20:16It felt exciting. I haven't been to an auction
0:20:16 > 0:20:20for many, many years and Dave was on holiday, actually.
0:20:20 > 0:20:23I had his cheque-book, so... We was all right!
0:20:23 > 0:20:27I actually bidded on four or five, knowing I wasn't going to get
0:20:27 > 0:20:32four or five, of course, but we got a couple, so we was well pleased.
0:20:32 > 0:20:34Dave was pleased with the price as well.
0:20:43 > 0:20:46Dave works in the electronics industry in Gainsborough
0:20:46 > 0:20:48and Chris has been a builder all his life.
0:20:48 > 0:20:52They originally met because they share an accountant.
0:20:52 > 0:20:55This is their first official business venture together.
0:20:55 > 0:20:58They bought two homes at the same auction, but the other property
0:20:58 > 0:21:02is tenanted and only needs minimal work - unlike this one.
0:21:02 > 0:21:05So when you found out this was the one that Chris had
0:21:05 > 0:21:07put your money on, how did you feel?
0:21:07 > 0:21:11I was very pleased that we'd at least secured one,
0:21:11 > 0:21:14because hopefully this is going to be part of an ongoing project.
0:21:14 > 0:21:17I still hadn't seen it until today.
0:21:17 > 0:21:22- In fact, I still haven't completely looked around it yet.- Really?
0:21:22 > 0:21:24- Absolutely.- Have you been upstairs? - Yeah, briefly.
0:21:24 > 0:21:28- Have you seen little bathroom in the cupboard?- I have, yes.
0:21:28 > 0:21:31So what do you think about that? What are your plans?
0:21:31 > 0:21:33I suspect we'll be putting the bathroom back
0:21:33 > 0:21:37at the rear of the property, next to the kitchen.
0:21:37 > 0:21:41But what about just having a really nice shower room?
0:21:41 > 0:21:43A good, walk-in shower?
0:21:43 > 0:21:46OK, no WC, no loo, but you've still got facilities to wash your hair,
0:21:46 > 0:21:52- clean your teeth, still having a wet room or something? - We spoke about that this morning.
0:21:52 > 0:21:57'We'll probably just cap the pipes off and leave it so that
0:21:57 > 0:22:01'while we're renting it out, it'll probably just be a walk-in wardrobe,
0:22:01 > 0:22:04'but when we do go to sell it,
0:22:04 > 0:22:08'we could reinstate it as a shower room or something.'
0:22:08 > 0:22:10So how far are you going to take this?
0:22:10 > 0:22:13Well, it's going to want damp course,
0:22:13 > 0:22:16it hasn't got a central heating system, which we'll have to do,
0:22:16 > 0:22:21the electrics need upgrading, a fair amount of plasterworks, of course,
0:22:21 > 0:22:26a new kitchen, new bathroom, externals want squaring up a bit...
0:22:26 > 0:22:33- Redecorate.- So will you physically be involved in this property?- I will.
0:22:33 > 0:22:37My sons run a business, a building company,
0:22:37 > 0:22:40so I shall use them for the trade elements of the work,
0:22:40 > 0:22:43but the girlfriend and I will be jumping into the labouring
0:22:43 > 0:22:47and the decorating and the like, just to keep the cost down a bit.
0:22:47 > 0:22:49And how hands-on will you be with this project?
0:22:49 > 0:22:51Well, I'm not from the building trade at all,
0:22:51 > 0:22:55but I'm quite handy with a paint roller, so that's me.
0:22:56 > 0:22:58So what sort of budget have you got to spend?
0:22:58 > 0:23:04I think between 15 and 17. Around about that mark should sort it out.
0:23:04 > 0:23:07So how long do you think this is going to take, this project,
0:23:07 > 0:23:12- to get in, get out and get it rented?- Six weeks.- Six weeks?!- Yeah.
0:23:12 > 0:23:14- You're very confident.- Yeah.
0:23:14 > 0:23:18- How much rent do you think you'll get?- 450.
0:23:22 > 0:23:25Well, these two seem to have done the sums
0:23:25 > 0:23:28and have set themselves a reasonable budget.
0:23:28 > 0:23:30But that's a tight timescale -
0:23:30 > 0:23:32just six weeks to refurb the whole house
0:23:32 > 0:23:35AND create a downstairs bathroom?
0:23:35 > 0:23:38Is this something that you're quite excited about?
0:23:38 > 0:23:43Oh, yes, I've always enjoyed property and refurbing
0:23:43 > 0:23:46and that sort of thing - I get a buzz out of it.
0:23:46 > 0:23:50- I'm looking forward to it.- Guys, it's almost too good to be true.
0:23:50 > 0:23:54I'm very excited to see the outcome. Good luck with this project
0:23:54 > 0:23:58- and I hope it goes really well for you both.- Thanks very much. - Dave, Chris, thank you.
0:24:00 > 0:24:02Well, the boys seem to have bought well.
0:24:02 > 0:24:07They're not worried about anything - the predicted yield is great...
0:24:07 > 0:24:09Well, it's all roses.
0:24:09 > 0:24:12But property developing rarely goes to plan,
0:24:12 > 0:24:16so will it be smooth going or a rough ride?
0:24:16 > 0:24:20Join us later and you can find out how Chris and Dave get on.
0:24:21 > 0:24:27Coming up, things look positive at this one-bedroom flat in Plymouth.
0:24:27 > 0:24:29So, all in all, a really good start.
0:24:31 > 0:24:34In Gainsborough, we find out
0:24:34 > 0:24:37how Chris and Dave managed with their very tight timescale.
0:24:37 > 0:24:41- We've been fairly busy and it's been challenging!- Yes!
0:24:42 > 0:24:46But first, in South Wales, we find out if it's all been happy families.
0:24:46 > 0:24:51Father and son, you know what it's like - fireworks, sometimes!
0:25:00 > 0:25:04Time now to return to the Penarth suburb of Cogan, South Wales,
0:25:04 > 0:25:10where plumber Matt bought this plot of land at auction for £40,500.
0:25:10 > 0:25:13It had outlined planning permission for either a detached house
0:25:13 > 0:25:16or two two-bedroom flats.
0:25:16 > 0:25:19The latter was the preferred option for Matt and his builder dad, Phil.
0:25:19 > 0:25:23It seemed as though Matt may have had more than a gentle nudge
0:25:23 > 0:25:25in the direction of his profession.
0:25:27 > 0:25:30I was a builder. I've been a builder for 30 years
0:25:30 > 0:25:32and I could never get a plumber,
0:25:32 > 0:25:36so I made my son go into the plumbing game.
0:25:36 > 0:25:39Straight from school, I done an apprenticeship, didn't I?
0:25:39 > 0:25:41That was it, then!
0:25:41 > 0:25:45- You couldn't get one, so you bred your own!- I did - two!- Two?
0:25:45 > 0:25:49- You've got another son?- I have, yes. - And he's a plumber as well? - He's a plumber as well.
0:25:49 > 0:25:52So, as Phil's a builder and Matthew's a self-employed plumber
0:25:52 > 0:25:55and heating engineer, between them,
0:25:55 > 0:25:58they're very well equipped to take on a project like this.
0:25:58 > 0:26:03We returned just over two years later to see how they got on.
0:26:06 > 0:26:10Well, there's been a slight change of plan.
0:26:10 > 0:26:12Instead of two flats, as was the original idea,
0:26:12 > 0:26:15Matt has built two semi-detached houses.
0:26:15 > 0:26:18They're a mirror image of each other,
0:26:18 > 0:26:22making the most of the 12-metre-square site.
0:26:22 > 0:26:26Inside the property, Matt has continued to be creative with the limited space.
0:26:26 > 0:26:30What we've got here is an open-plan living room,
0:26:30 > 0:26:35goes onto the kitchen area. We designed it so it's all open.
0:26:35 > 0:26:38We've got wood floor coming through from the living room
0:26:38 > 0:26:40through to the kitchen.
0:26:40 > 0:26:44With the kitchen area, we've got black gloss units
0:26:44 > 0:26:46with a gas combi boiler.
0:26:46 > 0:26:49The situation and layout works very well -
0:26:49 > 0:26:52I'm happy with the end product.
0:26:52 > 0:26:54Along with the open-plan living space,
0:26:54 > 0:26:58there's also a downstairs loo hidden under the stairs.
0:26:58 > 0:27:03Upstairs, Matt has maximised the original 12-metre-square
0:27:03 > 0:27:04plot of land.
0:27:04 > 0:27:07The situation upstairs is we've got two double bedrooms,
0:27:07 > 0:27:12nice-sized bedrooms, also we've got a bathroom
0:27:12 > 0:27:14consisting of a shower, bath,
0:27:14 > 0:27:16basin and toilet.
0:27:16 > 0:27:21We're very happy with the size of the upstairs.
0:27:21 > 0:27:23Done a good job, I think.
0:27:23 > 0:27:29So, who is responsible for the clever use of such limited space?
0:27:29 > 0:27:35An architect designed the actual build. The internal, I designed.
0:27:35 > 0:27:38My girlfriend designed the actual kitchen and bathroom
0:27:38 > 0:27:43with the tiles, so I'll let her take the plaudits for that bit!
0:27:43 > 0:27:46Who oversaw the work on a day-to-day basis?
0:27:46 > 0:27:51I was here as much as I could, but I still have my own heating
0:27:51 > 0:27:56engineering company, so obviously that takes priority over this.
0:27:56 > 0:27:59That's where my dad came in quite handy, because he kept an eye
0:27:59 > 0:28:03on the actual staff, so took a bit of pressure off us.
0:28:04 > 0:28:09Good old dad. How was working together on a project such as this for family harmony?
0:28:12 > 0:28:17It can be difficult sometimes, but I overrule him sometimes
0:28:17 > 0:28:20and he overrules me sometimes. So...
0:28:20 > 0:28:22We just take it father and son, you know what it's like -
0:28:22 > 0:28:24fireworks, sometimes!
0:28:27 > 0:28:30Initially, Matt's plan was to build two flats,
0:28:30 > 0:28:33but after further research into the practicalities,
0:28:33 > 0:28:36he opted to build two identical two-bedroom semis.
0:28:36 > 0:28:39He had hoped to complete the project in seven to nine months,
0:28:39 > 0:28:41but a combination of problems with utilities
0:28:41 > 0:28:45and his other work commitments meant the work took almost two years.
0:28:45 > 0:28:49Has that delay had an impact on the budget?
0:28:52 > 0:28:56I spent 40,500 buying the actual land and to complete the two,
0:28:56 > 0:29:01it was 55,000 per house, so 110,000 to complete.
0:29:03 > 0:29:07Matt's overall spend, including the original purchase is 150,500 -
0:29:07 > 0:29:12£60,000 over his original budget.
0:29:12 > 0:29:15However, given that he's built two houses instead of two flats,
0:29:15 > 0:29:17this could work out well.
0:29:17 > 0:29:19To find out if that is the case,
0:29:19 > 0:29:22we invited along two local estate agents.
0:29:26 > 0:29:29Both properties have been finished to a high standard
0:29:29 > 0:29:32with neutral colours and a contemporary finish.
0:29:32 > 0:29:35That's exactly what people are looking for.
0:29:35 > 0:29:37It's been finished very well.
0:29:37 > 0:29:40I like the fact that it's open-plan downstairs.
0:29:40 > 0:29:44The kitchen units match really nicely into the rest of the downstairs.
0:29:44 > 0:29:48Upstairs, they've done very well with the shape that they've had to
0:29:48 > 0:29:53work with and the bathroom has been finished nicely as well.
0:29:53 > 0:29:55What could the properties potentially make,
0:29:55 > 0:29:57were they to be sold on?
0:29:57 > 0:30:00I believe the guideline on this one
0:30:00 > 0:30:04is between £125,000-£130,000.
0:30:04 > 0:30:08I would value each property at £130,000.
0:30:12 > 0:30:14If the properties were to sell at the top end of these prices,
0:30:14 > 0:30:17for £130,000, that could generate a pre-tax profit
0:30:17 > 0:30:24of around 109,500, minus the usual selling expenses.
0:30:25 > 0:30:29I think it's a little bit under what we were expecting.
0:30:29 > 0:30:33I think we were expecting 140, 145 maybe.
0:30:33 > 0:30:36But obviously it's a bad market at the moment,
0:30:36 > 0:30:41so this is the reason why we decided to rent, hoping that
0:30:41 > 0:30:45in the future, the market will pick up and we'll get a bit more for it.
0:30:45 > 0:30:49So what could the rental income be for the two properties?
0:30:49 > 0:30:53The rental market is very buoyant at the moment.
0:30:53 > 0:30:57I'd be happy to put them on the market to achieve £550
0:30:57 > 0:30:58per calendar month.
0:30:58 > 0:31:05They should rent for between £550-£575 per calendar month.
0:31:05 > 0:31:09We've agreed with the tenants 575, we know the market around here,
0:31:09 > 0:31:14so we knew it was going to be roughly round there, so we're happy.
0:31:14 > 0:31:18If both properties were to be rented out at £575 per month,
0:31:18 > 0:31:23that's a joint income of £1,150, so a yield of around 9%.
0:31:26 > 0:31:30What are their thoughts, now that the project is finally complete?
0:31:30 > 0:31:32I'm really happy with the end result.
0:31:32 > 0:31:36Considering where we were a couple of years ago, at the auction,
0:31:36 > 0:31:41what it was to what it is now is very satisfying, yes.
0:31:41 > 0:31:42It is very nice.
0:31:53 > 0:31:58I'm in Plymouth, Devon, known as the Waterfront City and situated
0:31:58 > 0:32:02near the Tamar Valley - an area of outstanding natural beauty.
0:32:02 > 0:32:05Put simply, Plymouth is lovely.
0:32:05 > 0:32:06Well, I am very excited
0:32:06 > 0:32:12because there is a flat up for sale on this street for £115,000.
0:32:12 > 0:32:15On the same street is the property that was up for auction.
0:32:15 > 0:32:21IT had a guide price of just £35-£45,000. It's also a flat.
0:32:21 > 0:32:23Let's find out what it's like.
0:32:26 > 0:32:29From outside, things look OK.
0:32:29 > 0:32:31There are signs of wear and tear,
0:32:31 > 0:32:35but nothing a skilled carpenter can't fix.
0:32:35 > 0:32:38The flat is on the ground floor and whilst the communal entrance
0:32:38 > 0:32:41is quite tight, it all appears to be in good order.
0:32:41 > 0:32:45So what does this particular one-bedroom flat have to offer,
0:32:45 > 0:32:48because they can vary quite enormously?
0:32:48 > 0:32:51Straight into a really nice-sized living room,
0:32:51 > 0:32:53so that's a great start.
0:32:53 > 0:32:55It's obviously in need of some updating,
0:32:55 > 0:32:58but it's fantastic to see that some of the original features
0:32:58 > 0:33:01are still here - look at these shuttered windows.
0:33:01 > 0:33:04Get a carpenter to take those off, have them dip-stripped
0:33:04 > 0:33:08and have them put back - it would be a major feature in this room.
0:33:08 > 0:33:10Absolutely beautiful.
0:33:10 > 0:33:14Fireplace is quite nice too, so all in all, a really good start.
0:33:18 > 0:33:22There's a good-sized double bedroom at the back of the flat and a bathroom.
0:33:22 > 0:33:25Although that perhaps requires a bit of updating, I think you would
0:33:25 > 0:33:31have a great little flat on your hands here with just some refurbishment.
0:33:31 > 0:33:36So through to the kitchen and it's a sort of long, galley-style kitchen.
0:33:36 > 0:33:40Not massive, but lots of light pouring in through the window, so we like that.
0:33:40 > 0:33:42You obviously need to spend some money sorting this out,
0:33:42 > 0:33:45but for the size of the flat, it's a good-sized space.
0:33:45 > 0:33:49The only big issue in here is what is causing that problem?
0:33:49 > 0:33:54It's obviously water coming in from above - I don't know what's above, but is probably not yours,
0:33:54 > 0:33:59so there's an issue with negotiating with whoever owns it to sort it out.
0:33:59 > 0:34:02Either way, it's got to be done.
0:34:11 > 0:34:14You can see from the facia boards that they're suffering
0:34:14 > 0:34:16from wear and tear.
0:34:16 > 0:34:18My guess is that a couple of hundred quid will sort this
0:34:18 > 0:34:22and at the same time, sort the watery issue in the kitchen.
0:34:22 > 0:34:25If that wasn't enough, this flat also benefits from
0:34:25 > 0:34:26some outside space.
0:34:28 > 0:34:33Well, something often missing from flats is outside space,
0:34:33 > 0:34:36but the good news is that this flat has a bit of a garden.
0:34:36 > 0:34:40The only slight thing I'm not sure about is which bit of garden the flat owns.
0:34:40 > 0:34:43That's why it's really important that before you buy,
0:34:43 > 0:34:48you get your solicitor - or you, if you've got some experience - to look at the legal packs.
0:34:48 > 0:34:51The plans will be on there and will say who owns which bit of ground.
0:34:51 > 0:34:53Either way, it's nice to have that space.
0:35:01 > 0:35:05Well, someone seems to have made themselves at home already,
0:35:05 > 0:35:08and doesn't really care who owns which bit of garden.
0:35:08 > 0:35:11But will a local estate agent think this ground-floor flat
0:35:11 > 0:35:16with an auction guide price of £35-£45,000 is purr-fect
0:35:16 > 0:35:17or cat-astrophic?
0:35:19 > 0:35:22For a one-bedroom property, I think it's got very good size.
0:35:22 > 0:35:25A nice size lounge, which could easily fit a dining table,
0:35:25 > 0:35:29a galley kitchen, but that's probably appropriate for the size of the property,
0:35:29 > 0:35:34and a good-sized double bedroom, so overall I think it's certainly what you'd expect.
0:35:34 > 0:35:37Let's talk figures, then.
0:35:37 > 0:35:41Rentals-wise for this property, we'd be looking at between £400 and £450 a month.
0:35:41 > 0:35:45That'd achieve a good yield on the property, probably about 8.5%,
0:35:45 > 0:35:48so we'd be looking at a good return for an investor for it.
0:35:48 > 0:35:52We'd place this one onto the market for around 60,000, £70,000,
0:35:52 > 0:35:55and look to achieve that relatively quickly.
0:35:55 > 0:35:58I think there are a lot of positives for this property -
0:35:58 > 0:36:01good location, and I think if you are looking to buy
0:36:01 > 0:36:03to either rent or sell on, you're going to do well.
0:36:03 > 0:36:07Let's see who fancied the opportunity when it went under the hammer.
0:36:07 > 0:36:12This is a one-bedroom, ground-floor flat in need of refurbishment.
0:36:12 > 0:36:17Guiding £35-£45,000. You can start me at 20.
0:36:17 > 0:36:20£20,000 at the back, 22.
0:36:20 > 0:36:2422, then, at 22. And 24.
0:36:24 > 0:36:2724,000. 26.
0:36:27 > 0:36:3128 at the back. 28,000.
0:36:31 > 0:36:35I'll take one if it helps. Looking for 29 now.
0:36:35 > 0:36:37£30,000.
0:36:37 > 0:36:4030. £30,000 with you now.
0:36:40 > 0:36:45At £30,000, I'll take 32 from you at the back now,
0:36:45 > 0:36:50the lady on the wall. 34, may I say? 34, and six? 36?
0:36:50 > 0:36:5535 then, 36? 36.
0:36:55 > 0:36:5837?
0:36:58 > 0:37:03Thinking about it. 36-and-a-half? 36-and-a-half. 37. 37.
0:37:03 > 0:37:08£37,000 then, with you at £37,000. That was the first time of calling.
0:37:08 > 0:37:12£37,000 seated, second time of calling.
0:37:12 > 0:37:15£37,000, third and final time of calling -
0:37:15 > 0:37:19are you sure you're all done? It's sold, at £37,000.
0:37:25 > 0:37:28Giving this place the thumbs-up with his successful bid
0:37:28 > 0:37:31of £37,000 was Andy, with his wife Amy.
0:37:31 > 0:37:35They've just returned from six months in Australia
0:37:35 > 0:37:37where Amy's originally from.
0:37:37 > 0:37:40They've decided to give property development a go
0:37:40 > 0:37:43with this as their first venture in the UK.
0:37:43 > 0:37:46I met up with them to find out more.
0:37:47 > 0:37:51- Amy, Andy, lovely to meet you both. Congratulations.- Thank you.
0:37:51 > 0:37:53Tell me why you wanted to buy this place.
0:37:53 > 0:37:57Well, we're looking for an investment flat to rent out
0:37:57 > 0:38:01and hopefully start buying a few more of them and see how it goes.
0:38:01 > 0:38:05- Right, and this seemed to fit the bill?- Yes.- Yes, it was cheap.- Ah!
0:38:05 > 0:38:06Apart from cheapness...
0:38:06 > 0:38:09Was that the main reason why you wanted to buy it?
0:38:09 > 0:38:11It was going to be a good yield.
0:38:11 > 0:38:14The rental market down here is quite strong.
0:38:14 > 0:38:16So do you know this area at all?
0:38:16 > 0:38:21We've got friends who know it very well and we're getting to know it.
0:38:21 > 0:38:23Right, so whereabouts do you live?
0:38:23 > 0:38:26We've just bought a property about 500 metres from here.
0:38:26 > 0:38:31- 500 metres away?- Yes!- Right! - Keeping it close.
0:38:31 > 0:38:33That we're going to be living in,
0:38:33 > 0:38:37- and then this'll be our investment property. - OK, so when did you buy that?
0:38:37 > 0:38:41The house that we're moving into, we bought about six weeks ago.
0:38:41 > 0:38:46- Wow, it's all change then.- Yes. - Where were you before?- Australia.
0:38:46 > 0:38:50- Wow! Whereabouts?- In Sydney. - Gosh, doing what?
0:38:50 > 0:38:53Renovating the flat that we owned there.
0:38:53 > 0:38:57We did that up over six months and then moved back here.
0:38:57 > 0:38:59So how did the project in Sydney go?
0:38:59 > 0:39:03It went really well, so it probably gave us a false sense of confidence!
0:39:03 > 0:39:05We'll see how it goes with this one.
0:39:12 > 0:39:16Before Australia, Amy and Andy both worked in London -
0:39:16 > 0:39:18Andy as a financial forecaster
0:39:18 > 0:39:22and Amy on the editorial side of a bridal magazine.
0:39:22 > 0:39:25Although used to hard work, they've taken on a lot
0:39:25 > 0:39:27with their purchase of their new home
0:39:27 > 0:39:30at the same time as this investment property.
0:39:30 > 0:39:32- So how was the auction for you? - It was good.
0:39:32 > 0:39:38We had just come from clearing our house, so I was in quite a state.
0:39:38 > 0:39:39A bit dusty?
0:39:39 > 0:39:44Yeah - plaster in my hair and bits of wallpaper sticking to my trousers.
0:39:44 > 0:39:47It was interesting, but then we got into it and got the house,
0:39:47 > 0:39:49so it worked well.
0:39:49 > 0:39:52And the flat? There must've been some things about it that you liked.
0:39:52 > 0:39:56We liked that there's a separate kitchen and the size and location.
0:39:56 > 0:39:57It's a great area.
0:39:57 > 0:40:00It's got a few features we like, with the shutters
0:40:00 > 0:40:03and the high ceilings and picture rails, so hopefully
0:40:03 > 0:40:07we can make those look a little better than they do at the moment.
0:40:07 > 0:40:10And it's got its own outdoor space, a private garden for the flat,
0:40:10 > 0:40:12so that's quite unusual.
0:40:12 > 0:40:16Are you clear on which bit of outdoor space you own?
0:40:16 > 0:40:19Relatively clear, but we want to be certain,
0:40:19 > 0:40:22so I'm actually picking up tomorrow the red outline,
0:40:22 > 0:40:26to be able to check off exactly which part is ours.
0:40:33 > 0:40:37I'm glad they're checking out which bit of garden they own,
0:40:37 > 0:40:42as any uncertainty over shared areas can cause problems with the neighbours.
0:40:42 > 0:40:44As they plan to rent the flat out,
0:40:44 > 0:40:49the outside space is a real attraction for prospective tenants.
0:40:49 > 0:40:53So tell me what you're going to do then, to sort it out.
0:40:53 > 0:40:56We're going to gut it, first of all,
0:40:56 > 0:40:59then it will all need replastering, rewiring, new kitchen, new bathroom.
0:40:59 > 0:41:03And... Hopefully, that should do it.
0:41:03 > 0:41:04And the budget for what you've got to do?
0:41:04 > 0:41:0810,000, including contingency.
0:41:08 > 0:41:11- Who's doing the work?- Andy.
0:41:13 > 0:41:17I'll be doing the majority of it and we've got a few different
0:41:17 > 0:41:20tradespeople who will obviously be doing the parts I can't do.
0:41:20 > 0:41:24Then, in terms of what you might get for the rent... Any ideas?
0:41:24 > 0:41:28We've done our numbers on 400 a month, um,
0:41:28 > 0:41:32and depending on how good a job we do, we might be able to get
0:41:32 > 0:41:34a little bit more, but I think that's the ceiling round here.
0:41:34 > 0:41:37But in terms of return on the investment?
0:41:37 > 0:41:38It's about 8%, I think.
0:41:45 > 0:41:46A great return on investment.
0:41:46 > 0:41:49So how quickly can Andy and Amy renovate
0:41:49 > 0:41:52and start to earn some of that rental income?
0:41:52 > 0:41:54We're flat out on our own place at the moment,
0:41:54 > 0:41:57so this place will play second fiddle initially,
0:41:57 > 0:42:02- but we're hoping to have it done in three months. - Right. And your own place?- Yes.
0:42:02 > 0:42:04Shouldn't this take priority, cos it'll make you money?
0:42:04 > 0:42:08- At the moment, we're staying in a friend's spare room, so...- One room?
0:42:08 > 0:42:11- Yes, out of a suitcase.- Oh, no!
0:42:13 > 0:42:16- But taking quite a lot on at the same time.- We don't do things
0:42:16 > 0:42:19by halves - once we've made a decision, we tend to plough into it.
0:42:19 > 0:42:21And then the plan moving forward is what?
0:42:21 > 0:42:27Hopefully to buy further one-bedroom flats and rent them out in Plymouth,
0:42:27 > 0:42:31- and see how we go.- Fantastic. Well, listen, congratulations.
0:42:31 > 0:42:34- Thanks very much.- Good luck.- Cheers. - We look forward to seeing how you get on.
0:42:35 > 0:42:39Well, Andy and Amy clearly knew exactly what they were looking for
0:42:39 > 0:42:42when they bought this place, but I am a little bit concerned
0:42:42 > 0:42:44that they've got two projects on the go at the same time.
0:42:44 > 0:42:49When it comes to doing up a rental property like this, time is money.
0:42:49 > 0:42:52Find out how they get on later in the show.
0:42:55 > 0:42:59Well, transforming a property from a worn-out shell
0:42:59 > 0:43:02to a home can be very rewarding and profitable.
0:43:02 > 0:43:06So did everything go well for our buyers today?
0:43:06 > 0:43:09Let's find out how it turned out for them.
0:43:10 > 0:43:14Back now to Gainsborough in Lincolnshire, where friends
0:43:14 > 0:43:20Chris and Dave bought this mid-terrace house for 26,000 at auction.
0:43:20 > 0:43:22It was to be their first business venture together.
0:43:22 > 0:43:26Chris has been a builder all his life and with the help
0:43:26 > 0:43:30of his two builder sons, was to undertake the majority of the work on the project.
0:43:30 > 0:43:33Dave, who works in the electronics industry, was also going to help out
0:43:33 > 0:43:39wherever possible, although he left the auction bidding to Chris.
0:43:39 > 0:43:43It was very exciting, I haven't been to an auction for many years.
0:43:43 > 0:43:46Dave was on holiday, actually. I had his cheque-book, so...
0:43:46 > 0:43:48We was all right!
0:43:51 > 0:43:54The property had accommodation over three floors,
0:43:54 > 0:43:57but was only listed as having two bedrooms.
0:43:57 > 0:44:02This was because although there were rooms in the loft space, they didn't meet building regulations
0:44:02 > 0:44:05and therefore could not be classed as a third bedroom.
0:44:05 > 0:44:08And who could forget the bathroom, which was housed in what can
0:44:08 > 0:44:12only be described as a cupboard in the bedroom?!
0:44:12 > 0:44:17We returned just six weeks later to see what the boys have achieved.
0:44:17 > 0:44:20Outside, the house has benefited from a lick of paint
0:44:20 > 0:44:22and new gutterings.
0:44:22 > 0:44:25Inside has been redecorated throughout in modern,
0:44:25 > 0:44:27neutral colours.
0:44:27 > 0:44:30The fireplace and electric heaters have been replaced
0:44:30 > 0:44:35with a new heating system, which will be much more efficient in performance
0:44:35 > 0:44:36and cheaper to run.
0:44:36 > 0:44:40The electrics have been rewired and doors replaced.
0:44:40 > 0:44:44In the kitchen, not only are there new units and appliances,
0:44:44 > 0:44:47but space has been made to accommodate a brand-new bathroom,
0:44:47 > 0:44:51adding to the WC which was already there.
0:44:51 > 0:44:55So the bathroom has moved from the cupboard on the first floor to the ground floor.
0:44:55 > 0:44:59Well, of course, the bathroom was originally upstairs,
0:44:59 > 0:45:02between the two bedrooms, which didn't really work
0:45:02 > 0:45:06in terms of you accessed it either side of the bedroom.
0:45:06 > 0:45:10The WC was actually in this room, just a closet in the corner,
0:45:10 > 0:45:15so we decided to move this wall back into the kitchen a little bit,
0:45:15 > 0:45:20new roof, a new skin, so it's nice and cosy now, it's warm.
0:45:20 > 0:45:22And a new bathroom suite, decorated -
0:45:22 > 0:45:26we're really pleased with the space, to be honest. It's worked out quite well.
0:45:32 > 0:45:36What became of the previous cupboard bathroom?
0:45:36 > 0:45:40We've changed the existing bathroom into two wardrobes,
0:45:40 > 0:45:42accessing from either bedroom.
0:45:42 > 0:45:47It's quite a nice detail. It's turned out quite well, really.
0:45:47 > 0:45:50The original plan was to leave the plumbing there
0:45:50 > 0:45:54so we can make it an en-suite in the future if we ever chose to sell it.
0:45:54 > 0:45:57In fact, when we ripped everything out,
0:45:57 > 0:45:59we realised that all the old plumbing was lead,
0:45:59 > 0:46:02so it had to go, so there isn't that facility any more.
0:46:07 > 0:46:10So no en-suite, which is a bit of a shame, but the two
0:46:10 > 0:46:14first-floor bedrooms have been spruced up and are looking great.
0:46:14 > 0:46:17Previously, the loft space could not be used as a bedroom,
0:46:17 > 0:46:20cos the rooms didn't meet building regulations,
0:46:20 > 0:46:23but it's now an open plan and far more versatile space.
0:46:23 > 0:46:26What was involved in the change?
0:46:26 > 0:46:30We had to completely gut this room, because the plasterboard was so old and tired,
0:46:30 > 0:46:32it really had come out completely.
0:46:32 > 0:46:34Of course that brought all sorts of dirt,
0:46:34 > 0:46:38because there's so much accumulated soot between the roof tiles and plasterboard.
0:46:38 > 0:46:42We had to completely re-line it, put new balustrading in,
0:46:42 > 0:46:44because the old stuff didn't meet regulation.
0:46:44 > 0:46:49New skirting board, new carpet, redecorated - it looks great.
0:46:49 > 0:46:53How much of this handiwork was completed by the boys themselves?
0:46:53 > 0:46:57And did they stick to their ambitious six-week schedule?
0:46:59 > 0:47:03Dave and I have worked every evening and weekend really,
0:47:03 > 0:47:06so we've been fairly busy and it's been challenging!
0:47:07 > 0:47:11Six weeks is a fairly tight programme for anybody,
0:47:11 > 0:47:14but we were determined to stick to that and we pretty much have done.
0:47:14 > 0:47:19We're delighted with it, really - it came out really well, really.
0:47:19 > 0:47:23So, they managed to finish within their forecasted timescale,
0:47:23 > 0:47:27but did they achieve the same with their budget?
0:47:28 > 0:47:35I think we had 15 to 17,000 in for a budget, and we haven't totted
0:47:35 > 0:47:38the final figures up, but I'm sure they are thereabouts.
0:47:40 > 0:47:44So the boys did complete the project both on time and on budget.
0:47:45 > 0:47:47We asked two local property experts
0:47:47 > 0:47:51to take a look around and give us their thoughts on it.
0:47:51 > 0:47:54My first impression is that it's been
0:47:54 > 0:47:57a generally good refurbishment project throughout.
0:47:57 > 0:48:00There's three spacious bedrooms to the first and second floor,
0:48:00 > 0:48:03and the benefits of a new kitchen and bathroom.
0:48:03 > 0:48:07The quality of finish is in keeping with a general refurbishment programme of this type
0:48:07 > 0:48:09and everything is very neutral
0:48:09 > 0:48:11and modern on the eye - I don't think any buyer
0:48:11 > 0:48:13would have a problem with what they see.
0:48:13 > 0:48:17I think he's done a nice job - it's a lot better than it was
0:48:17 > 0:48:19when he bought it.
0:48:19 > 0:48:21Nice scheme of modernisation throughout.
0:48:21 > 0:48:25They bought the property at auction for 26,000
0:48:25 > 0:48:28and spent a further 15 to 17,000 on renovation,
0:48:28 > 0:48:33making a total outlay of between about 41 and 43,000.
0:48:33 > 0:48:36So what would be the value of the place in its current state
0:48:36 > 0:48:39if it were to be put on the open market?
0:48:42 > 0:48:46In my opinion, I would expect this property to achieve £55,000.
0:48:46 > 0:48:50My opinion of the sales value is somewhere in the region of £55-£58,000.
0:48:50 > 0:48:54- That's low.- Yeah.- A little low.
0:48:54 > 0:48:58So whilst they seem a little disappointed with these values,
0:48:58 > 0:49:01that would still represent a potential pre-tax profit
0:49:01 > 0:49:04of between 12 and 15,000.
0:49:04 > 0:49:06The plan was always to rent it out,
0:49:06 > 0:49:10so what sort of rental income should they be looking for?
0:49:10 > 0:49:14I think this property could achieve £350 per calendar month.
0:49:14 > 0:49:16My opinion on the rental values
0:49:16 > 0:49:19would be around £425-£450 per calendar month.
0:49:19 > 0:49:22Spot-on. That's where we'd have put it.
0:49:22 > 0:49:25That's where we are with it - we've got a tenant moving in on Saturday.
0:49:25 > 0:49:27So we're all right with that one.
0:49:27 > 0:49:32The tenant is actually paying them £450 per calendar month,
0:49:32 > 0:49:37which represents an impressive annual yield of approximately 13%.
0:49:37 > 0:49:43With that in mind, how have they found their first foray into property auctions?
0:49:45 > 0:49:48- It's gone really well, hasn't it? - We've enjoyed it.
0:49:48 > 0:49:50- We'll certainly do another, won't we?- Oh, for sure.
0:49:55 > 0:49:59Back now to Plymouth in Devon, where husband-and-wife team Andy
0:49:59 > 0:50:04and Amy bought this one-bedroom ground-floor flat at auction for £37,000.
0:50:04 > 0:50:06They'd recently moved back from Australia,
0:50:06 > 0:50:09where they'd successfully renovated and sold a property.
0:50:09 > 0:50:13This flat was in need of updating, but did boast some lovely
0:50:13 > 0:50:17original features and benefited from some outside space.
0:50:17 > 0:50:19As well as buying this place, Andy
0:50:19 > 0:50:22and Amy were also in the midst of renovating their newly-bought home,
0:50:22 > 0:50:26so they certainly had a lot on their plate.
0:50:26 > 0:50:30But they clearly weren't the type of people to let the grass grow under their feet.
0:50:36 > 0:50:40We want to make sure that our plan works in terms of being able
0:50:40 > 0:50:44to buy the investment property and do it up, rent it and create
0:50:44 > 0:50:47an income stream from that and a viable business,
0:50:47 > 0:50:48so we need to get started.
0:50:48 > 0:50:54We returned 5½ months later to find out how Andy
0:50:54 > 0:50:55and Amy had got on.
0:50:59 > 0:51:02Well, from the outside, there's no change,
0:51:02 > 0:51:04but inside, it's been transformed.
0:51:04 > 0:51:07Gone are the dark wall coverings and carpets,
0:51:07 > 0:51:10replaced by bright colours and wooden floors.
0:51:10 > 0:51:14The kitchen has new worktops and a gas hob has been installed.
0:51:17 > 0:51:20In the bathroom, the dated pink suite is no more
0:51:20 > 0:51:24and is replaced by a modern, contemporary version.
0:51:26 > 0:51:28We've plastered most of the walls
0:51:28 > 0:51:31because once we stripped back a few layers of wallpaper,
0:51:31 > 0:51:33I don't think the walls had been touched quite a while.
0:51:33 > 0:51:37Fresh paint, new floor - done nearly everything, I think.
0:51:38 > 0:51:40Not doing things by halves,
0:51:40 > 0:51:44Andy and Amy were in the middle of renovating their own home just down
0:51:44 > 0:51:48the road when they were successful at auction with this property.
0:51:48 > 0:51:52So they had two renovation projects on the go at the same time.
0:51:52 > 0:51:56They've clearly made significant efforts to bring this flat up-to-date.
0:52:01 > 0:52:05We used to have gas-fires here and an immersion heater. Instead,
0:52:05 > 0:52:09we decided to do the gas central heating, cos we thought it'd be
0:52:09 > 0:52:12more appealing for tenants and people buying it if we do sell it.
0:52:13 > 0:52:16This property has the benefit of outside space,
0:52:16 > 0:52:18with a garden to the rear,
0:52:18 > 0:52:23but there was a question as to which piece of land belonged to the flat.
0:52:23 > 0:52:27Our part of the garden is the smallest part, and unfortunately
0:52:27 > 0:52:30it still looks the same as when we bought it, pretty much.
0:52:30 > 0:52:34Hopefully, when spring comes, we'll get in there and just deck it, add some flowerbeds
0:52:34 > 0:52:37and make it a nice place to be.
0:52:37 > 0:52:40Andy and Amy seem to have made a great team on this project,
0:52:40 > 0:52:46so what's their secret to a harmonious working relationship?
0:52:46 > 0:52:49Amy and I tend to take on separate projects -
0:52:49 > 0:52:55she's also project manager, essentially, makes sure we've got all the supplies we need,
0:52:55 > 0:52:57makes sure there's a good timetable that we can stick to,
0:52:57 > 0:53:01so that we don't end up spending too long on the wrong thing.
0:53:01 > 0:53:04So, Amy takes charge and Andy does the graft -
0:53:04 > 0:53:06sounds like a match made in heaven.
0:53:06 > 0:53:09But was that the case for the budget?
0:53:09 > 0:53:14The original budget was 10,000 and so far, we've spent 8,500,
0:53:14 > 0:53:16with a few more things left to do.
0:53:16 > 0:53:21The couple hoped to complete the flat as well as the renovation
0:53:21 > 0:53:22of their own home in three months.
0:53:22 > 0:53:27Were they able to stick to that ambitious timescale?
0:53:27 > 0:53:30We ended up living on-site in the first house,
0:53:30 > 0:53:33which is why it took a bit longer than we thought -
0:53:33 > 0:53:36ended up taking four months instead of three,
0:53:36 > 0:53:39which meant that we didn't start on this one until four weeks ago.
0:53:39 > 0:53:44When we eventually got on site, it's been four weeks so far.
0:53:44 > 0:53:47Which has been solid, but it's been good to get done
0:53:47 > 0:53:51and the transformation is really enjoyable.
0:53:52 > 0:53:55So an overrun of a month, but within budget.
0:53:55 > 0:53:59Not bad when you consider that the two projects were running at once.
0:53:59 > 0:54:03What's been the most satisfying aspect of working here?
0:54:03 > 0:54:08I think seeing it done is the nicest part, just knowing that you've been
0:54:08 > 0:54:15able to create it from practically nothing, create a home for someone.
0:54:15 > 0:54:16Probably us!
0:54:16 > 0:54:21Andy and Amy had originally planned to rent this flat out,
0:54:21 > 0:54:24but given the success of both this project
0:54:24 > 0:54:27and the renovation of their home, there's been a change of heart.
0:54:27 > 0:54:30Our plan is to sell our house and if that sells quickly,
0:54:30 > 0:54:35we'll move into this one and look for our next project to do.
0:54:35 > 0:54:37They paid £37,000 at auction for the flat
0:54:37 > 0:54:41and have spent around £8,500 on the renovation,
0:54:41 > 0:54:44giving them an overall outlay of around £45,500.
0:54:47 > 0:54:50We asked them two local property experts for their opinions
0:54:50 > 0:54:52on this Plymouth pad.
0:54:52 > 0:54:55I think it's great. They've really done a good job, actually.
0:54:55 > 0:54:59Compared to how it was previously, they've really turned it around.
0:54:59 > 0:55:00Nice and fresh, modern -
0:55:00 > 0:55:03really would be perfect for what buyers are looking for.
0:55:03 > 0:55:05First impressions, very impressed.
0:55:05 > 0:55:10Cosmetically extremely nice, there are certain works externally
0:55:10 > 0:55:13and to common areas that I would look at,
0:55:13 > 0:55:18but they've done a really good job in a fairly short space of time.
0:55:18 > 0:55:22What would be the value of the property in its new state
0:55:22 > 0:55:24if it were put up for sale?
0:55:24 > 0:55:29Anything from 58 to £59,000 for a fairly prompt sale,
0:55:29 > 0:55:35through to as high as £65,000, depending on how quick or not they want it to go.
0:55:35 > 0:55:39I'd look to place this onto the market at between 60 and £65,000.
0:55:39 > 0:55:41We'd certainly see a return at that level.
0:55:41 > 0:55:45Those valuations would give Andy and Amy a pre-tax profit
0:55:45 > 0:55:49of between £12,500-£19,5000,
0:55:49 > 0:55:51before the usual selling expenses.
0:55:51 > 0:55:54What could the flat achieve as a rental?
0:55:56 > 0:56:00Per calendar month, we'd be looking at a comfortable rent of 425,
0:56:00 > 0:56:03rising possibly as high as £450.
0:56:03 > 0:56:07I'd rent this out at between 400 and £450 per calendar month,
0:56:07 > 0:56:10and we've certainly got tenants looking for this sort of property.
0:56:10 > 0:56:12That's good.
0:56:13 > 0:56:17Yeah, we had a reasonable idea of what the rental was,
0:56:17 > 0:56:21going into it, and the sales figure is nice to know.
0:56:21 > 0:56:24So, at the end of this successful project,
0:56:24 > 0:56:28do Andy and Amy have any advice for others thinking of buying at auction?
0:56:30 > 0:56:33To go for it, but that it is hard work.
0:56:33 > 0:56:37If it's the sort of work you enjoy doing, then it's great.
0:56:39 > 0:56:44Well, whether you're a seasoned property professional or a property novice,
0:56:44 > 0:56:48there are always lessons to be learned about buying property.
0:56:48 > 0:56:51So join us next time for some more auction action...
0:56:51 > 0:56:53- On Homes Under The Hammer. - See you then.
0:57:04 > 0:57:12Subtitles by Red Bee Media Ltd