0:00:00 > 0:00:02Hello and welcome to the show.
0:00:02 > 0:00:05Now, they say every house tells a story
0:00:05 > 0:00:07and we've certainly found that to be true.
0:00:07 > 0:00:10Oh, yes, there are tales to tell and secrets to uncover
0:00:10 > 0:00:13when you buy your home under the hammer.
0:00:38 > 0:00:42At auction, properties are bought on a buyer beware basis,
0:00:42 > 0:00:46so it's up to you to check everything out before you bid.
0:00:46 > 0:00:49Yes, or you could be in for some nasty surprises.
0:00:49 > 0:00:54So, did today's buyers get lucky? Here's what they bought.
0:00:54 > 0:00:55In Tonypandy South Wales,
0:00:55 > 0:00:59I see a property with a very competitive guide price.
0:00:59 > 0:01:03£15,000, that is 15, not 50.
0:01:04 > 0:01:09This house in Manchester gets top marks for it later appearance, so...
0:01:09 > 0:01:14I really hope I don't have to downgrade it when I go inside.
0:01:14 > 0:01:17And, in the Crewe, Cheshire, things are looking down,
0:01:17 > 0:01:18when I start looking up.
0:01:20 > 0:01:22How did I miss that?
0:01:25 > 0:01:28All these properties have been sold at auction.
0:01:28 > 0:01:31We will find out who bought them, and what they paid for them,
0:01:31 > 0:01:33- when they went under the hammer. - Yours, sir.
0:01:35 > 0:01:40Today, I am on the outskirts of Tonypandy in South Wales,
0:01:40 > 0:01:44a former mining community in the valleys of South Wales.
0:01:45 > 0:01:48# Valley low, valley so low
0:01:49 > 0:01:54# Valley high, valley high... #
0:01:57 > 0:02:00With good transport links to Cardiff, this place is on the up
0:02:00 > 0:02:02and the focus of my visit?
0:02:02 > 0:02:06Well, 15 minutes walk from the town centre of Tonypandy,
0:02:06 > 0:02:08with the backdrop of the beautiful hills,
0:02:08 > 0:02:10is the property I'm here to see.
0:02:10 > 0:02:11It's a mid-terrace, two bedroomed,
0:02:11 > 0:02:14with a with a guide price of £15,000.
0:02:14 > 0:02:19That 15, not 50! let's see what it's like inside.
0:02:19 > 0:02:24This may win the prize for the steepest street
0:02:24 > 0:02:26ever to appear on Homes Under The Hammer,
0:02:26 > 0:02:29but that £15,000 guide price is far from steep.
0:02:32 > 0:02:34Nice to have a little porch area as you're
0:02:34 > 0:02:37straight off the street into the property, but...
0:02:40 > 0:02:44..before I tell you about the place, it's one of those times that
0:02:44 > 0:02:47I am so pleased that you're at home and not here because...
0:02:49 > 0:02:54..what can I say? The smell is not pleasant.
0:02:54 > 0:02:56Anyway, what have we got?
0:02:56 > 0:02:59The house is actually a really nice design.
0:02:59 > 0:03:02Downstairs, here, one big room.
0:03:02 > 0:03:05You've got a gas fire in there, if that was a real fire it would be lovely.
0:03:05 > 0:03:08The stairs are really discreetly out the way and basically
0:03:08 > 0:03:13down here it is just one big room and then through to the kitchen.
0:03:13 > 0:03:16It is a bit of a TARDIS in lots of ways,
0:03:16 > 0:03:19because once you get inside it seems to go on quite a lot.
0:03:19 > 0:03:23The kitchen, though, like the rest of the property,
0:03:23 > 0:03:28is in a derelict state.
0:03:28 > 0:03:33It is one of those ones where, no question, it is rip it out
0:03:33 > 0:03:35and start again.
0:03:35 > 0:03:39But in terms of the structure, I think it is pretty good.
0:03:40 > 0:03:43Just bring your air freshener!
0:03:43 > 0:03:45# Ooh-oh, that smell
0:03:47 > 0:03:51# Can't you smell that smell? #
0:03:51 > 0:03:54The main offender here appears to be damp,
0:03:54 > 0:03:55but I don't think it is structural.
0:03:55 > 0:03:58It seems as though there may have been a serious leak
0:03:58 > 0:04:02when the radiators were unceremoniously yanked out.
0:04:02 > 0:04:05And what looks like evidence of years of heavy smoking here
0:04:05 > 0:04:06doesn't help.
0:04:08 > 0:04:10Well, up here it doesn't get any better.
0:04:10 > 0:04:12However, let's stop looking at the actual state of the place
0:04:12 > 0:04:15and look at the actual layout.
0:04:15 > 0:04:16I like it.
0:04:16 > 0:04:19This staircase here works really well, a little landing,
0:04:19 > 0:04:23two bedrooms, one small and one reasonable sized.
0:04:23 > 0:04:27And then, a really nice surprise, the bathroom.
0:04:27 > 0:04:32I mean, it's not exactly somewhere you would necessarily get your kit off,
0:04:32 > 0:04:34but it is in the right place, it is upstairs
0:04:34 > 0:04:36and it is half-decent sized.
0:04:37 > 0:04:40If you can see through the mess, it is actually really good.
0:04:41 > 0:04:43One thing's for sure though -
0:04:43 > 0:04:46you're not going to put the property on a pedestal, are you?
0:04:48 > 0:04:53Now, at the moment the house is more inclined to make your heart sink.
0:04:53 > 0:04:57However, with some hard work and hard cash I think it could be put on a pedestal.
0:04:57 > 0:05:00# I put you on a pedestal... #
0:05:02 > 0:05:06At the back there is a small terrace and the good news is that there is off-street parking,
0:05:06 > 0:05:10or space for a skip or two, or three when you start work here.
0:05:14 > 0:05:16Now, a bit of a note of caution.
0:05:16 > 0:05:20The legal pack indicated that an environmental report had been
0:05:20 > 0:05:25done and they had found questionable levels of radon in the area.
0:05:25 > 0:05:28Radon is a naturally occurring radioactive gas.
0:05:28 > 0:05:30It is to do with the geology of an area
0:05:30 > 0:05:33and some areas have more of it than others.
0:05:33 > 0:05:36It is a health hazard and it is important to know
0:05:36 > 0:05:39whether particular property has high levels of radon.
0:05:39 > 0:05:41It is easy to actually find out,
0:05:41 > 0:05:44you need to seek professional advice, but either way you
0:05:44 > 0:05:47definitely need to check out whether it is going to be a problem or not.
0:05:49 > 0:05:53So there is some homework and a fair bit of hard work to do here.
0:05:53 > 0:05:55What does a local estate agent make of this place
0:05:55 > 0:05:57with its £15,000 guide price?
0:06:00 > 0:06:05It is a fair sized property, the layout is fairly good.
0:06:05 > 0:06:08The bathroom is upstairs, so that is a bonus.
0:06:09 > 0:06:13Obviously, it needs quite a lot of work, and there is some
0:06:13 > 0:06:17off-road parking at the back of the property, so that is quite good.
0:06:17 > 0:06:18It is a nice little house.
0:06:26 > 0:06:30What make the property fetch on the rental market?
0:06:30 > 0:06:33A property like this, once it has been refurbished, would look
0:06:33 > 0:06:42to achieve between £350 per calendar month, maybe £390 per calendar month.
0:06:43 > 0:06:45What about resale?
0:06:46 > 0:06:50If this property was refurbished to a good standard,
0:06:50 > 0:06:55I think it could achieve between £35-£40,000.
0:06:55 > 0:06:59Well, that £15,000 guide price may seem a bit of a bargain,
0:06:59 > 0:07:02and in this case, I think it could well be.
0:07:02 > 0:07:04Yes, it needs a bit of work to sort it out,
0:07:04 > 0:07:07but a good solid little property and we like that.
0:07:07 > 0:07:10Let's see who agreed when it went under the hammer.
0:07:11 > 0:07:15Lot one in the catalogue, it is a two bedroom house renovation,
0:07:15 > 0:07:17let's get things moving pretty quickly,
0:07:17 > 0:07:19I've got a proxy bid for 15,000, I'm looking for 16.
0:07:19 > 0:07:2515,000 I have, 16. 16, thank you, 16 is bid. My proxy bids 17,000.
0:07:25 > 0:07:32I'm at the reserve. 17,000? Any advance on 17,000? 18, thank you.
0:07:32 > 0:07:34My proxy is out, it's on you, madam, at 18,000.
0:07:34 > 0:07:38Any advance, I'll take them in halves. 18, half?
0:07:39 > 0:07:43Madam, I'll take 19 off you. Thank you. 19? 19, thank you.
0:07:43 > 0:07:49Looking for half. Half I have. 20? Thank you, 20. 20,000 I have.
0:07:50 > 0:07:52Looking for half.
0:07:52 > 0:07:5620 and a half, thank you. On you, sir. 20,500 on you.
0:07:56 > 0:08:01I'm going to sell it to him, are you sure, madam? Any advance?
0:08:01 > 0:08:04Be quick, quick.
0:08:04 > 0:08:09No? Yours, sir, at 20,500.
0:08:09 > 0:08:14That successful bid of £20,500 was made by John, A project manager
0:08:14 > 0:08:17who lives in London.
0:08:17 > 0:08:20He is looking to take a bit of time out of his day job to get
0:08:20 > 0:08:24back into property development after a five-year break.
0:08:24 > 0:08:26# Now I need a break from the old routine
0:08:26 > 0:08:29# What do you mean you need a break from the old routine?
0:08:29 > 0:08:30# We need a break from the old routine
0:08:30 > 0:08:33# What do you mean we need a break from the old routine? #
0:08:35 > 0:08:40I met up with John at the property to find out what he has planned for it.
0:08:43 > 0:08:46- John, good to meet you.- Thank you. - Congratulations.- Thank you.
0:08:46 > 0:08:50You have a house in the valleys. Tell me why you wanted to buy it?
0:08:50 > 0:08:55Er, purely for the returns you get in South Wales on the property,
0:08:55 > 0:08:57plus if you buy it at auction
0:08:57 > 0:09:00you get the capital gain and the rental returns are pretty good also.
0:09:00 > 0:09:03- And that's it, are you a property investor then?- Yes.
0:09:03 > 0:09:08- Normally around here or other places?- South Wales, yes.- OK.
0:09:08 > 0:09:10So, how many properties have you bought in South Wales?
0:09:10 > 0:09:16Previously we had a small portfolio of six which we sold in 2007.
0:09:16 > 0:09:18Oh, wow.
0:09:18 > 0:09:21Now just seems to be the right time for us to get back into the market.
0:09:21 > 0:09:26- So, in 2007 you sold just before things went a bit pear shaped?- Yes.
0:09:26 > 0:09:27Psychic.
0:09:27 > 0:09:29That was lucky!
0:09:29 > 0:09:33Did you ever work out how much it would have dropped by
0:09:33 > 0:09:36had you sold it, say, a year later?
0:09:36 > 0:09:41- About £100,000.- Wow! Just for picking your timings.
0:09:41 > 0:09:45# Here I am again, perfect time... #
0:09:51 > 0:09:54That's the thing about the property market it's all about timing,
0:09:54 > 0:09:58with some luck and a sprinkle of good judgement thrown in too.
0:10:00 > 0:10:03John hopes his instinct will be right on this purchase
0:10:03 > 0:10:06as he only viewed the outside before the auction.
0:10:06 > 0:10:11He sent a friend to check out the inside.
0:10:11 > 0:10:14What did you think when you walked through the door?
0:10:15 > 0:10:18Pretty much what you thought, I'd imagine!
0:10:18 > 0:10:24It was a bit of a shock, but it looks a lot worse than it is.
0:10:24 > 0:10:28There was some issue about radon mentioned in the legal pack. What do you know about that?
0:10:28 > 0:10:31That shows the importance of reading the legal pack.
0:10:31 > 0:10:32There was an environmental survey,
0:10:32 > 0:10:37and it did show that there was a presence of radon in the area.
0:10:37 > 0:10:43However, there have been remedies taken to prevent the radon
0:10:43 > 0:10:45actually having any effect.
0:10:47 > 0:10:48That has a guarantee with it,
0:10:48 > 0:10:52so I am quite happy that the property is safe.
0:10:53 > 0:10:57Good to see that John is across that one.
0:10:57 > 0:11:02He has got a budget of £8,000, plus a £1,600 contingency and a six-week
0:11:02 > 0:11:05timescale to get the mid-terrace ready for the rental market.
0:11:05 > 0:11:08That includes a new central heating system,
0:11:08 > 0:11:12but with his day job in London, he won't be on-site the whole time.
0:11:12 > 0:11:16How does it work being based in London
0:11:16 > 0:11:18and having a portfolio in South Wales?
0:11:18 > 0:11:21It is quite easy, I know the contractors who are going
0:11:21 > 0:11:24to be working on the house so I am quite happy to leave them
0:11:24 > 0:11:26the keys to crack on with it and come down once a week.
0:11:26 > 0:11:28So, what are you going to do to sort out?
0:11:28 > 0:11:32The guys come in tomorrow and start ripping out all the carpets,
0:11:32 > 0:11:34stripping the walls, knocking the plaster off the walls,
0:11:34 > 0:11:37so the plaster will be done on a week on Monday.
0:11:39 > 0:11:42Then the heating and bathroom, kitchen
0:11:42 > 0:11:43and the electrics will be done.
0:11:43 > 0:11:44Are you keeping a layout as it is?
0:11:44 > 0:11:46Keeping a layout exactly as it is, there would be no
0:11:46 > 0:11:48value in changing the layout.
0:11:48 > 0:11:52And do you have plans for the near future, more properties?
0:11:52 > 0:11:57Yes, I hope to buy six properties a year for the next three years,
0:11:57 > 0:11:59but things could always change.
0:11:59 > 0:12:03- Well, listen, congratulations. Good luck with it.- Thank you.
0:12:03 > 0:12:06- I look forward to seeing how you get on.- Thank you.
0:12:07 > 0:12:11Well, John has certainly proved himself to be a shrewd operator in the past,
0:12:11 > 0:12:14selling his property portfolio just before the credit crunch.
0:12:14 > 0:12:18He has also seen through the state of this place to what it might become.
0:12:18 > 0:12:20How will he get on sorting it out
0:12:20 > 0:12:22and has he made the right decision this time?
0:12:22 > 0:12:24You can find out later in the show.
0:12:26 > 0:12:30I have travelled to Manchester today,
0:12:30 > 0:12:32and I am in an area called Fallowfield.
0:12:32 > 0:12:36It is three miles from the city centre and so it's a popular destination
0:12:36 > 0:12:40for people who want to live in close proximity to the bright lights.
0:12:40 > 0:12:43It's also very close to the city's university,
0:12:43 > 0:12:45so it is a hit with students too.
0:12:45 > 0:12:48The question is, will today's property
0:12:48 > 0:12:50be first-class or third rate?
0:12:50 > 0:12:52Only one way to find out.
0:12:55 > 0:13:00Here's hoping it is not a textbook auction property.
0:13:00 > 0:13:03I really don't want to have to lecture the new owners
0:13:03 > 0:13:07if they haven't given it the third degree and done thorough research.
0:13:07 > 0:13:10And here it is in all its 1920s glory.
0:13:10 > 0:13:13Now, the guide price for this semi-detached property was
0:13:13 > 0:13:16set at £115,000.
0:13:16 > 0:13:20From the outside things are off to a positive start, I like it.
0:13:20 > 0:13:22I know it is a little early to say,
0:13:22 > 0:13:25but I think this one could receive fairly high marks from me today.
0:13:25 > 0:13:28I hope I don't have to downgrade it when I go inside.
0:13:30 > 0:13:32You'd think I'd learned my lesson by now,
0:13:32 > 0:13:34never judge a book by its cover.
0:13:34 > 0:13:37But, I can't help thinking positive about this place.
0:13:38 > 0:13:41Well, the house is behaving itself so far.
0:13:41 > 0:13:44Look at this lovely front door. There is so much character!
0:13:44 > 0:13:48Lots of little features in 1920s houses,
0:13:48 > 0:13:50I mean, look at the stained-glass absolutely gorgeous.
0:13:52 > 0:13:54OK, you can see that there is wallpaper falling down,
0:13:54 > 0:13:58it needs a complete overhaul, but you have a lovely reception room
0:13:58 > 0:14:03to the front there, a really good space at the back of the property, so you have two reception rooms.
0:14:03 > 0:14:06A tiny kitchen, which is disappointing, but you could
0:14:06 > 0:14:11easily change that by knocking this wall down and opening up the space.
0:14:11 > 0:14:13I think that would work well for modern living.
0:14:13 > 0:14:17What I would like to do would be to replace that window with some
0:14:17 > 0:14:20French doors so you got immediate access out into the garden.
0:14:20 > 0:14:24It would change this dreary room into something a lot more contemporary.
0:14:24 > 0:14:26It is the usual story
0:14:26 > 0:14:29a layout that doesn't work for modern day living.
0:14:29 > 0:14:32But, remove that dividing wall, and hey presto,
0:14:32 > 0:14:34you create a whole new look down here.
0:14:36 > 0:14:40Upstairs it is a standard three-bedroom layout.
0:14:40 > 0:14:43Two are a good size and the others are singles.
0:14:43 > 0:14:48There is a bathroom that definitely needs updating. Let's consider the options available.
0:14:48 > 0:14:51With a sizeable student population on your doorstep, you could
0:14:51 > 0:14:54convert the second reception room into a fourth bedroom,
0:14:54 > 0:14:58so turning it into a student let seems like the most obvious
0:14:58 > 0:15:00and lucrative choice.
0:15:00 > 0:15:04But before we go down that route, there are some issues to consider.
0:15:04 > 0:15:08Renting this property to three or more people would make this an HMO,
0:15:08 > 0:15:11which is a house of multiple occupancy.
0:15:11 > 0:15:13Now, you will have to adhere to numerous safety rules
0:15:13 > 0:15:17and regulations before you can even think about putting this
0:15:17 > 0:15:18on the rental market.
0:15:18 > 0:15:21You'll have to do your sums carefully -
0:15:21 > 0:15:25remember that students pay only full rent from the end of September
0:15:25 > 0:15:31to the end of June, so you cannot count on a full 12 months' rent.
0:15:31 > 0:15:36And lastly, an HMO requires far more in terms of management,
0:15:36 > 0:15:37time and effort.
0:15:37 > 0:15:39Are you really up for that?
0:15:39 > 0:15:41You've got to ask yourself that question
0:15:41 > 0:15:43before taking something like this on.
0:15:43 > 0:15:47Of course, this house doesn't just have student letting as an option.
0:15:47 > 0:15:49It's also a well-proportioned family home,
0:15:49 > 0:15:53and with a few modernising touches it could definitely
0:15:53 > 0:15:56combine '20s elegance with a contemporary lifestyle.
0:15:56 > 0:15:59And to top it all off, the property
0:15:59 > 0:16:02comes with this fabulous south-facing garden.
0:16:02 > 0:16:04It's a little bit triangular in shape,
0:16:04 > 0:16:06so it does tail off towards the end down there.
0:16:06 > 0:16:10It's a bit narrow, but the good news is you get the sunshine
0:16:10 > 0:16:14throughout the day, and that is a big bonus and selling point.
0:16:14 > 0:16:17Now, it's nice to see the neighbour has put in some sliding doors
0:16:17 > 0:16:19to really get the most out of that room,
0:16:19 > 0:16:22so let's hope the new owners copy that idea.
0:16:22 > 0:16:25If you do decide to turn this into a student let,
0:16:25 > 0:16:29you may want to think about putting a little patio area here
0:16:29 > 0:16:32to create some low-maintenance outside space.
0:16:35 > 0:16:37Time to find out what a local estate agent
0:16:37 > 0:16:42thinks of this three-bed house that was guided at 115,000.
0:16:44 > 0:16:46It's a great property, yeah. Offers a lot of potential.
0:16:46 > 0:16:48Definitely needs some renovation, though.
0:16:48 > 0:16:52This place really needs some cash splashed on it,
0:16:52 > 0:16:55but what about its location as a prime rental?
0:16:55 > 0:16:57This is a great spot here.
0:16:57 > 0:17:01You're minutes away from the town centre, close to the university,
0:17:01 > 0:17:05right next to the motorway as well, so really good connections.
0:17:05 > 0:17:09Let's talk figures. What could a resale achieve?
0:17:09 > 0:17:13I would expect this property to go for around £170,000
0:17:13 > 0:17:14when it's fully renovated.
0:17:14 > 0:17:17How would it do as a three-bed rental?
0:17:18 > 0:17:20If we were going to rent this property out
0:17:20 > 0:17:23I would expect it to go for around £800 per calendar month.
0:17:23 > 0:17:26And how would the student let figures work?
0:17:26 > 0:17:30Around this area, I'd expect the students would look to pay
0:17:30 > 0:17:32around £70 per person per week.
0:17:32 > 0:17:36Well, convert that rear reception room to a fourth bedroom,
0:17:36 > 0:17:42and you could be looking at £280 per week over a nine-month student term.
0:17:42 > 0:17:45That would add up to a rental income of around 11,000.
0:17:46 > 0:17:48We all know by now that location
0:17:48 > 0:17:52is key to any successful property purchase.
0:17:52 > 0:17:53And in this part of Manchester,
0:17:53 > 0:17:56well, it's a real hot spot for investors.
0:17:56 > 0:17:58That house could work in so many different ways
0:17:58 > 0:18:00and that's what set it apart.
0:18:00 > 0:18:03Let's see who wanted this when it went under the hammer.
0:18:06 > 0:18:10Lot one. What's it going to be worth today? Somebody start me off.
0:18:10 > 0:18:1490,000, and we're away. I'll take your bid at 90. £90,000.
0:18:14 > 0:18:1890. Thank you. At £90,000. Do we see 95?
0:18:18 > 0:18:2290, I have on my right. 95, 92 anywhere? 92,000.
0:18:22 > 0:18:26Back again, sir, 94. At 94, 96.
0:18:26 > 0:18:2896,000. 98.
0:18:28 > 0:18:30At 98. Round it to 100.
0:18:30 > 0:18:32£100,000.
0:18:32 > 0:18:35£100,000. 102, 102,000 now.
0:18:35 > 0:18:37104,000.
0:18:37 > 0:18:42Do we see 106? 106 I have now on my right. Do we see 108?
0:18:42 > 0:18:46At 108,000, then. At £108,000, it's your bid at £108,000. 110?
0:18:46 > 0:18:49112. There's two more in it, there's three of you in it.
0:18:49 > 0:18:52110 at the back. 111. 112?
0:18:52 > 0:18:54112. 113? 13.
0:18:54 > 0:18:5614? 15.
0:18:56 > 0:18:5916. 17.
0:18:59 > 0:19:0118. 19.
0:19:01 > 0:19:0420. 21.
0:19:04 > 0:19:07122. 23. 24.
0:19:07 > 0:19:1025. 26. 27.
0:19:10 > 0:19:14128. At 128,000, then. 128,500?
0:19:14 > 0:19:19128,500 now, then. 129, may I say? 129.
0:19:19 > 0:19:22129,500, 130, may I say?
0:19:22 > 0:19:26129,500 then, for the first time, seated.
0:19:26 > 0:19:30For the second time. The third and final time at 129,500.
0:19:30 > 0:19:32There we go, sir.
0:19:32 > 0:19:36The successful bidders who got the lot for £129,500
0:19:36 > 0:19:39are husband and wife Tim and Audrey.
0:19:40 > 0:19:45They are both retired and this is their first-ever renovation project.
0:19:45 > 0:19:47The house is not for them, but for their son,
0:19:47 > 0:19:49who has been looking for a new home.
0:19:51 > 0:19:53Tim and Audrey, congratulations.
0:19:53 > 0:19:56So why did you want to buy this house at auction?
0:19:56 > 0:19:59We were looking for a house for ourselves and spotted this,
0:19:59 > 0:20:02and my son was also looking for a house and spotted this one,
0:20:02 > 0:20:03and suggested he might like it.
0:20:03 > 0:20:08What happened when you phoned him and told him you'd got the property?
0:20:08 > 0:20:09What was his reaction?
0:20:09 > 0:20:10We couldn't phone him.
0:20:10 > 0:20:15He wasn't quite an important meeting! So he sent a text.
0:20:15 > 0:20:16He went "Wow".
0:20:16 > 0:20:19He sent a text, W-O-W?
0:20:19 > 0:20:21- Yeah.- Was that it?
0:20:21 > 0:20:23No, another text - "how much?"
0:20:25 > 0:20:30# I've just gotta get a message to you
0:20:30 > 0:20:36# Hold on, hold on... #
0:20:36 > 0:20:38Well, it seems the message did get through.
0:20:38 > 0:20:42Audrey and Tim have been acting on behalf of their son,
0:20:42 > 0:20:43who has been away a lot with work.
0:20:43 > 0:20:46He hasn't even managed to see inside the house yet
0:20:46 > 0:20:50so it was a big responsibility for his patents.
0:20:50 > 0:20:53I think it will be my project, my hobby for the next few months.
0:20:53 > 0:20:56I think we are under instruction, though.
0:20:56 > 0:20:59Our son is going to choose things. He's got some very firm ideas
0:20:59 > 0:21:01about what he wants to do with the house.
0:21:01 > 0:21:05So for example, he wants a black kitchen.
0:21:05 > 0:21:08- A black...? - A black gloss kitchen.
0:21:08 > 0:21:12So he's adamant that he's going to have that.
0:21:12 > 0:21:13And he wants to make this room open plan,
0:21:13 > 0:21:15he wants to have the wall knocked down
0:21:15 > 0:21:19so that it's open with the kitchen, which is a bit too small.
0:21:19 > 0:21:22And he wants to have a sitting area / kitchen
0:21:22 > 0:21:25and be able to look out onto the garden.
0:21:25 > 0:21:26Well, I completely agree with him,
0:21:26 > 0:21:29because I think that's exactly what you need to do here.
0:21:29 > 0:21:33So are you happy to install a black gloss kitchen them, Tim?
0:21:33 > 0:21:36I probably can find a man who will be.
0:21:36 > 0:21:38I'm interviewing builders tomorrow.
0:21:38 > 0:21:42- So has he left a lot of this down to you guys?- All of it, really.
0:21:45 > 0:21:47Apart from creating an open-plan kitchen,
0:21:47 > 0:21:49they're going to put a new loo under the stairs,
0:21:49 > 0:21:51a new bathroom suite upstairs,
0:21:51 > 0:21:54and re-site the central heating boiler,
0:21:54 > 0:21:58all, hopefully, in three months and for £15,000.
0:21:58 > 0:22:01And although their son does plan to live here,
0:22:01 > 0:22:03they do have a Plan B in mind.
0:22:04 > 0:22:07I know it's quite popular around here for HMOs -
0:22:07 > 0:22:09lots of student lets. Is that something
0:22:09 > 0:22:12that you've thought about for the future, with this property maybe?
0:22:12 > 0:22:15I think potentially, if our son moves away with work,
0:22:15 > 0:22:19he might choose to hang onto this house and rent it out.
0:22:19 > 0:22:21But that's an option, isn't it?
0:22:21 > 0:22:23So have you helped out financially with this?
0:22:23 > 0:22:25We're the bankers for the time being,
0:22:25 > 0:22:28but no, eventually he will be paying for it.
0:22:28 > 0:22:30He will buy it. But hopefully the uplifting value
0:22:30 > 0:22:32will provide a good chunk of his deposit.
0:22:32 > 0:22:34It's been great meeting you today.
0:22:34 > 0:22:37Good luck, and I can't wait to see what you do. Audrey, thank you.
0:22:37 > 0:22:39- Tim, lovely to meet you.- Thank you.
0:22:41 > 0:22:44The bank of mum and dad comes to the rescue,
0:22:44 > 0:22:47and both Audrey and Tim, well, they're delighted
0:22:47 > 0:22:51they've been able to secure this property for their son - lucky him.
0:22:51 > 0:22:54Now, the hard work doesn't stop here for them, though,
0:22:54 > 0:22:57because they've got to interview builders,
0:22:57 > 0:22:59knock a wall down and install a black kitchen.
0:22:59 > 0:23:04And will their son, with firm ideas, be happy with the end result?
0:23:04 > 0:23:08You can find out how it goes later in the programme.
0:23:09 > 0:23:10Coming up, in Crewe, Cheshire,
0:23:10 > 0:23:14there's a property where its highs are its lows.
0:23:14 > 0:23:18Upstairs, here, needs a lot more work than downstairs.
0:23:19 > 0:23:21Back in Manchester,
0:23:21 > 0:23:24not everyone is feeling the love for property development.
0:23:24 > 0:23:27I don't really want to do it again.
0:23:27 > 0:23:30So I'll have to be doing it on my own next time then!
0:23:31 > 0:23:33But first, in South Wales,
0:23:33 > 0:23:36which part of the refurbishment delighted John?
0:23:36 > 0:23:38I was really pleased with that because it was a nice surprise.
0:23:42 > 0:23:44It was in Tonypandy, South Wales,
0:23:44 > 0:23:49where we saw a two-bed mid-terraced house. Positioned on a steep hill,
0:23:49 > 0:23:52it had slid into considerable disrepair
0:23:52 > 0:23:55with broken pipes causing damp.
0:23:55 > 0:23:59The whole place was dilapidated and in a poor state.
0:23:59 > 0:24:03But London-based project manager John thought it could be
0:24:03 > 0:24:05a perfect rental property.
0:24:05 > 0:24:08So for £20,500 he snapped it up.
0:24:08 > 0:24:11But this wasn't his first purchase in the area.
0:24:11 > 0:24:14So many properties have you bought in South Wales?
0:24:14 > 0:24:20Previously we had a small portfolio of six, which we sold in 2007.
0:24:20 > 0:24:22Oh, wow.
0:24:22 > 0:24:25Now just seemed to be the right time for us to get back into the market.
0:24:25 > 0:24:30- So, 2007, you sold just before things went a bit pear-shaped.- Yeah.
0:24:30 > 0:24:31Psychic!
0:24:32 > 0:24:37The vision he had for this property was that with an £8,000 budget
0:24:37 > 0:24:40and a six-week timescale, he would turn it into a rental machine.
0:24:40 > 0:24:43Now just under three months later, we're back.
0:24:43 > 0:24:44MUSIC: "One Vision" by Queen
0:24:44 > 0:24:49# One man, one goal
0:24:50 > 0:24:52# One mission
0:24:52 > 0:24:56# One heart, one soul
0:24:58 > 0:25:00# Just one solution... #
0:25:00 > 0:25:04It all looks promising, with a complete refurbishment throughout.
0:25:04 > 0:25:07It's been replastered, rewired and replumbed,
0:25:07 > 0:25:11plus there's new double glazing and a transformed kitchen.
0:25:13 > 0:25:15Basically we've refitted the kitchen, new floor,
0:25:15 > 0:25:19we went for a higher spec kitchen than we normally would
0:25:19 > 0:25:22basically because it came with a guarantee and it was stronger built.
0:25:22 > 0:25:27We went for white to brighten up the room, we've got deeper counters,
0:25:27 > 0:25:28and we went for a the ceramic hob
0:25:28 > 0:25:31because it's easier to keep clean than a stainless steel or enamel.
0:25:37 > 0:25:40# ..One world, one vision. #
0:25:40 > 0:25:45So with a much-improved kitchen, it was onwards and upwards for John.
0:25:49 > 0:25:52The two bedrooms were replastered, redecorated
0:25:52 > 0:25:55and are just waiting to be carpeted.
0:25:57 > 0:25:59# ..I had a dream... #
0:25:59 > 0:26:02Then there was just the small matter of the bathroom to tackle.
0:26:04 > 0:26:08Basically, we've done a lot of tenant-proofing in this room.
0:26:08 > 0:26:12We've put waterproof panelling all round the walls,
0:26:12 > 0:26:15tiled more than we normally would, used a higher-spec paint,
0:26:15 > 0:26:18and we've double-sealed around the bath
0:26:18 > 0:26:21because we're looking at a few years' time when we sell the property,
0:26:21 > 0:26:24it is in a better state than when we bought it.
0:26:25 > 0:26:28The property is now nearly ready to let.
0:26:28 > 0:26:31But it's taken 12 weeks so far -
0:26:31 > 0:26:33double the six weeks John had hoped for.
0:26:33 > 0:26:35So why the extended timescale?
0:26:37 > 0:26:39The major problem was we had a break-in
0:26:39 > 0:26:42and they stole all the copper pipe.
0:26:42 > 0:26:45Ruined newly plastered ceilings, so there's been
0:26:45 > 0:26:49a lot of sort of remedial works and that added to the schedule,
0:26:49 > 0:26:50and to the budget.
0:26:50 > 0:26:52So with a burglar alarm fitted,
0:26:52 > 0:26:56they were once again ready to crack on with the work.
0:26:56 > 0:27:01And London-based John had to increase his involvement.
0:27:01 > 0:27:03The original idea was not to be here too often
0:27:03 > 0:27:06because obviously I've got to work as well,
0:27:06 > 0:27:10but with the break-in and the delays in the schedule
0:27:10 > 0:27:13then I had to roll up my sleeves.
0:27:13 > 0:27:16I painted the back of the house
0:27:16 > 0:27:18almost completely before the rain hit.
0:27:18 > 0:27:23I've tiled the floors, I've tiled the bathroom
0:27:23 > 0:27:27and any other little jobs like cleaning up after the tradesmen,
0:27:27 > 0:27:29just to make the job move along a bit quicker.
0:27:29 > 0:27:32But now, as the job nears its finish,
0:27:32 > 0:27:34what is he most pleased with?
0:27:34 > 0:27:38Is it maybe the kitchen? Or the bathroom?
0:27:38 > 0:27:39Or...?
0:27:39 > 0:27:43The bit I'm most happy with is the little ball on top of the banister
0:27:43 > 0:27:47at the top of the stairs. There wasn't one there, it was cut off
0:27:47 > 0:27:48and it looked really bad.
0:27:48 > 0:27:50But the carpenter put a new one on and I was pleased
0:27:50 > 0:27:52because it was a nice surprise.
0:27:52 > 0:27:56# Like a rubber ball I'll come bouncing back to you... #
0:27:56 > 0:28:02OK! Not quite what I expected him to say. Each to their own, John.
0:28:02 > 0:28:05But having bounced back from the upset of the break-in,
0:28:05 > 0:28:10how did his proposed £8,000 budget fare?
0:28:10 > 0:28:14The budget has gone not too well at all. We are up to £12,000.
0:28:16 > 0:28:21£12,000 spent on top of his £20,500 purchase price for the property
0:28:21 > 0:28:28takes John's total outlay to £32,500 without costs and fees.
0:28:28 > 0:28:31But this is to be the first rental property in his portfolio,
0:28:31 > 0:28:35so will it give him a healthy return?
0:28:35 > 0:28:37Well, there's been a lot of improvements.
0:28:37 > 0:28:40It's been done to a very good standard,
0:28:40 > 0:28:41it's got a nice fitted kitchen,
0:28:41 > 0:28:45lots of workspace, nice white bathroom suite.
0:28:45 > 0:28:48He's done quite a nice job on the property.
0:28:48 > 0:28:52They've done a very good job on the refurbishment.
0:28:52 > 0:28:55Ideal for letting purposes.
0:28:55 > 0:28:59I like the size of the kitchen, I like the floor, the work units.
0:28:59 > 0:29:01Bathroom is a good size as well.
0:29:01 > 0:29:05And it has useful features such as the shower.
0:29:05 > 0:29:07John has done this refurbishment
0:29:07 > 0:29:10very much with the rental market in mind.
0:29:10 > 0:29:15But how would his £13,000 investment fare if sold on?
0:29:15 > 0:29:19Given the lack of demand for sales properties,
0:29:19 > 0:29:22I would market the property at £55,000
0:29:22 > 0:29:25with a view to achieving around £50,000.
0:29:25 > 0:29:28If he chose to go down the selling option
0:29:28 > 0:29:31he could possibly look to achieve £40,000.
0:29:31 > 0:29:35The higher one was around what we have in mind,
0:29:35 > 0:29:38but again we're intending to rent
0:29:38 > 0:29:41so the valuation is nice to know
0:29:41 > 0:29:44but it's the rental valuation we're after.
0:29:44 > 0:29:51Potentially a pre-tax profit of between around £7,500 and £22,500.
0:29:51 > 0:29:53But for John, rental's the name of the game.
0:29:53 > 0:29:58I would market this property in the region of £360 per calendar month.
0:29:58 > 0:30:03The rent on this property would be about £350 per calendar month.
0:30:03 > 0:30:05That'd give us a decent return.
0:30:05 > 0:30:09Obviously we'd like more because we've invested a little bit more
0:30:09 > 0:30:12than we needed but that'll still give us a good return.
0:30:12 > 0:30:16Yes, even with his expenditure higher than planned,
0:30:16 > 0:30:20he could still get a healthy 12-13% annual rental yield.
0:30:20 > 0:30:24Not a bad return to property developing, then. So what's next?
0:30:27 > 0:30:30We've already got our eye on a house not far from here.
0:30:30 > 0:30:35So we'll keep on increasing our portfolio
0:30:35 > 0:30:37and we hope to do another five this year.
0:30:41 > 0:30:43I'm now in Crewe, Cheshire.
0:30:43 > 0:30:46Home to the largest railway station in the North West
0:30:46 > 0:30:49and a major interchange for West Coast lines
0:30:49 > 0:30:52so it's a good focal point for commuters.
0:30:53 > 0:30:57Well, about half a mile from the train station right by the side
0:30:57 > 0:31:00of this busy main road is the property and here to see.
0:31:00 > 0:31:04The fact it's by a busy main road needn't necessarily be such a bad thing
0:31:04 > 0:31:05especially when I tell you
0:31:05 > 0:31:09that the university campus is a short wait just up there
0:31:09 > 0:31:12and this house might be ideal for student lets.
0:31:12 > 0:31:14At the moment it's divided into two flats.
0:31:14 > 0:31:17The guide price was £68,000, let's take a look.
0:31:18 > 0:31:22From the outside it looks like quite a handsome
0:31:22 > 0:31:23bay-fronted Victorian house.
0:31:23 > 0:31:27It's been divided into a two-bedroom flat on the ground floor
0:31:27 > 0:31:29and a one-bed one upstairs.
0:31:30 > 0:31:34So the original front door leads to what is now
0:31:34 > 0:31:37the first of those two flats.
0:31:37 > 0:31:41A nice first impression. Nice, high ceilings. Some original features which is good.
0:31:41 > 0:31:45Living room area at the front, you've got a big open fireplace.
0:31:45 > 0:31:48Obviously looks very, very tired and dated and nicotine stained
0:31:48 > 0:31:52so definitely major bits of paint required there.
0:31:52 > 0:31:55This is a bedroom and then continuing through to
0:31:55 > 0:31:58a rear living room area.
0:31:58 > 0:31:59- Look at this. - SQUEAKING
0:31:59 > 0:32:04Fantastic, my granny used to have one of these. A clothes dryer.
0:32:04 > 0:32:08Now more likely to be seen in trendy houses with potpourri
0:32:08 > 0:32:13and designer pans hanging from them. It'll probably go, but very sweet.
0:32:13 > 0:32:17A good sized space anyway. Through to the rear of the property where you've got a kitchen
0:32:17 > 0:32:20which definitely looks like it needs some work and a bathroom.
0:32:20 > 0:32:25So flat number one, first impressions, not too bad actually...
0:32:25 > 0:32:28Well, that was until... How did I miss that?
0:32:28 > 0:32:32I think I was distracted by the clothes airer! Yeah, OK.
0:32:32 > 0:32:36- Maybe some ceiling plastering required as well. - HE CLEARS HIS THROAT
0:32:36 > 0:32:39While I might fondly reminisce about clothes pulleys,
0:32:39 > 0:32:43I won't be PINING if this cladding bites the dust.
0:32:43 > 0:32:47This ground floor flat has definitely seen better days and needs a lot of modernisation.
0:32:47 > 0:32:52One bonus is that there is access to a bit of a backyard.
0:32:52 > 0:32:56It is shared with the upper flat and is looking rather run down
0:32:56 > 0:32:59but could eventually be a pleasant little space.
0:32:59 > 0:33:01Well, that was flat numero uno.
0:33:01 > 0:33:05Up these stairs to flat numero deux, two, dos...
0:33:05 > 0:33:07Well, you know what I mean.
0:33:08 > 0:33:13Well, access is through these double doors and straight away
0:33:13 > 0:33:16you're into the kitchen and equally straight away,
0:33:16 > 0:33:18you realise upstairs here...
0:33:19 > 0:33:22..needs a lot more work than downstairs.
0:33:22 > 0:33:25Just off the corridor is the bathroom
0:33:25 > 0:33:28and remember that hole in the ceiling downstairs?
0:33:28 > 0:33:31That's below all this porcelain and tiling.
0:33:31 > 0:33:33You wouldn't want all that crashing down on you.
0:33:33 > 0:33:35# Ouch!
0:33:37 > 0:33:39# Ooh!
0:33:41 > 0:33:43# Ow!#
0:33:43 > 0:33:45Ouch, ooh and a lot more besides.
0:33:45 > 0:33:48So best get those floorboards and joists checked out.
0:33:48 > 0:33:50And with a single bedroom and living room
0:33:50 > 0:33:55both looking rather worse for wear, there's lots of work needed here.
0:33:55 > 0:33:59So what are the bigger picture options for this place?
0:33:59 > 0:34:03Currently obviously it is separated out as two flats
0:34:03 > 0:34:06although the lease is only for one property.
0:34:06 > 0:34:11So it looks like officially maybe, planning permission-wise, lease-wise, legally-wise
0:34:11 > 0:34:12it isn't actually two flats.
0:34:12 > 0:34:17It's not a massive job to get the lease split up into two properties.
0:34:17 > 0:34:20Takes a bit of time and a good solicitor but the fact that
0:34:20 > 0:34:23somebody's been living here - or two people or families living here
0:34:23 > 0:34:26obviously for quite a while - has established a precedent
0:34:26 > 0:34:28and maybe that's not too big an issue.
0:34:28 > 0:34:30Two flats is one option.
0:34:30 > 0:34:33Converting it back into one main property is another option,
0:34:33 > 0:34:35that could be a family home or I think the most lucrative
0:34:35 > 0:34:38thing to do is to think about student lets.
0:34:38 > 0:34:42One house which had maybe four or five bedrooms let out to students.
0:34:42 > 0:34:45As I said before, you've got the campus not too far away.
0:34:45 > 0:34:48That is going to be your biggest return on your investment.
0:34:48 > 0:34:53I know it would be great to see this restored to one grand family home
0:34:53 > 0:34:57but it would take quite a bit of work to get it to that state
0:34:57 > 0:34:59and quite a big budget.
0:34:59 > 0:35:02On top of that £68,000 guide price, I reckon the student option
0:35:02 > 0:35:05might be the best way forward for any developer.
0:35:08 > 0:35:10Time to ask a local estate agent for his thoughts
0:35:10 > 0:35:14on this Victorian house in Crewe.
0:35:14 > 0:35:18There are pros and cons whichever way you let this property out.
0:35:18 > 0:35:20I'd feel if it was let out to students,
0:35:20 > 0:35:24then obviously the difficulty is going to be its high maintenance
0:35:24 > 0:35:27and also you'll only be looking at termly lets
0:35:27 > 0:35:29whereas if it was let out as one property,
0:35:29 > 0:35:32you're looking at a minimum assured shorthold tenancy of six months.
0:35:32 > 0:35:35Let's run through those rental figures.
0:35:35 > 0:35:39If this property was kept as a large three-bedroom house then I would feel
0:35:39 > 0:35:44a rental could be achieved in the region of £650 per calendar month.
0:35:44 > 0:35:48If this property was retained as flats, I would feel that each
0:35:48 > 0:35:50particular flat would achieve a rental in the region
0:35:50 > 0:35:56of £400-450 per calendar month depending on the number of bedrooms.
0:35:56 > 0:35:59That could be a possible total rental income
0:35:59 > 0:36:03of between £800-900 per calendar month for the property
0:36:03 > 0:36:08but how does a student let with five possible lettings sound?
0:36:08 > 0:36:12As a bed-sit, a single room, I would envisage you'd achieve
0:36:12 > 0:36:14somewhere in the region of £40 per week.
0:36:14 > 0:36:19So for a student let, that's around £800 per calendar month.
0:36:19 > 0:36:20What about the sale values?
0:36:20 > 0:36:22Currently along this street,
0:36:22 > 0:36:26single-use properties for families are selling, in very good condition
0:36:26 > 0:36:31if this was renovated nicely, in the region of £120-130,000.
0:36:31 > 0:36:35If this property was sold as individual flats,
0:36:35 > 0:36:41then I'd expect each flat to achieve in the region of £65,000 per flat.
0:36:41 > 0:36:45It's certainly a house with lots of options and we like that.
0:36:45 > 0:36:48You could leave it pretty much as it is as two flats,
0:36:48 > 0:36:51convert it into one house or, I think of course,
0:36:51 > 0:36:55the most lucrative option, convert it into student lets.
0:36:55 > 0:36:59It's all down to who bought it. Let's find out who that was when it went under the hammer.
0:37:04 > 0:37:07Lot 66, we now move to Crewe in Cheshire.
0:37:07 > 0:37:11Big property, split into flats. 60, can we say?
0:37:11 > 0:37:1460 bid, thank you. At £60,000.
0:37:14 > 0:37:1665, going to say now. Yep, 65.
0:37:16 > 0:37:20At £65,000. 70?
0:37:20 > 0:37:25At 65, new bidder. £70,000 on my left. At £70,000.
0:37:25 > 0:37:27Going once, if it helps.
0:37:27 > 0:37:32Back here, 71. 72. 73.
0:37:32 > 0:37:3874? We do, 74 and a half. 75?
0:37:38 > 0:37:40And a half?
0:37:40 > 0:37:42New bidder, 75 and a half.
0:37:42 > 0:37:4576, 76 and a half.
0:37:45 > 0:37:4877, 77 and a half.
0:37:48 > 0:37:53Back in, 78, 78 and a half.
0:37:53 > 0:37:5679, 79 and a half.
0:37:56 > 0:38:00Definite? 79 and a half with you in the doorway still.
0:38:00 > 0:38:03At £79,500 for the first time.
0:38:03 > 0:38:07At 79,500 for the second time.
0:38:07 > 0:38:10Third and final time at 79 and a half...
0:38:10 > 0:38:13- GAVEL BANGS - Your lot, sir. Well done.
0:38:13 > 0:38:18The successful bidder who got the lot for £79,500 is Derek.
0:38:19 > 0:38:22Originally from Glasgow, he has lived and worked in Crewe
0:38:22 > 0:38:24for over 15 years and currently
0:38:24 > 0:38:26works as a chef and a kitchen manager.
0:38:26 > 0:38:30To find out more about his plans for the new property I met him there
0:38:30 > 0:38:34along with his friend Paul who'll be helping him with the renovations.
0:38:35 > 0:38:39- Derek, Paul, good to meet you both. - Thank you.- Congratulations.
0:38:39 > 0:38:43- Tell me why you wanted to buy this place. - It was for investment originally
0:38:43 > 0:38:49but I had different ideas of what to do with it so I'm still up in the air about that one.
0:38:49 > 0:38:52You said "originally it was for investment".
0:38:52 > 0:38:55Yeah, it was to change it from two flats to a house
0:38:55 > 0:38:58for a family but now I've had some advice
0:38:58 > 0:39:02- so I was maybe thinking about student lets.- Oh, wow.- So I'm not sure.
0:39:02 > 0:39:06It seems to me that Derek's going to have to make a firm decision
0:39:06 > 0:39:09about what he wants to do here and pretty fast.
0:39:09 > 0:39:13# I can't make up my mind about you
0:39:13 > 0:39:17# Oh, I can't make up my mind
0:39:17 > 0:39:21# I can't make up my mind. #
0:39:23 > 0:39:24'But at least he won't be on his own.
0:39:24 > 0:39:28'Paul's dad was a brickie so he's grown up around the building trade
0:39:28 > 0:39:31'and now he's set to help Derek.'
0:39:31 > 0:39:33Paul, what's your involvement in all of this?
0:39:33 > 0:39:37Just a bit of advice, stuff that needs to be done.
0:39:38 > 0:39:43- For free, of course.- Does he know that yet?- Yeah, yeah, yeah.
0:39:43 > 0:39:45So what do you do when you're not doing this?
0:39:45 > 0:39:49- Have you got a normal job? - I'm a chef.- Oh, great.
0:39:49 > 0:39:52So what tempted you into property investment?
0:39:52 > 0:39:56It was something extra to do. It's a sort of hobby with me as well.
0:39:56 > 0:40:00Bit of a change from being stuck in a smoky, noisy kitchen?
0:40:00 > 0:40:05It is, but it's just as smoky in this room I think!
0:40:05 > 0:40:10# Hey, good lookin'
0:40:10 > 0:40:13# What you got cookin'?
0:40:13 > 0:40:18# How's about cooking something up with me? #
0:40:19 > 0:40:22Well, this house has all the right ingredients but what recipe
0:40:22 > 0:40:26will Derek use to make this place a tasty little earner?
0:40:27 > 0:40:32If we decide on the student let, five bedrooms will be a tight squeeze.
0:40:32 > 0:40:35If that's the case, we change the back kitchen-bathroom to a kitchen
0:40:35 > 0:40:41and then the other room beside it will be a shared living room area.
0:40:41 > 0:40:44- Uh-huh.- And the two rooms and three bedrooms upstairs
0:40:44 > 0:40:49- will become the five rooms.- OK, and the main bathroom will be?
0:40:49 > 0:40:53Upstairs. I know it's a bit...with one bathroom,
0:40:53 > 0:40:56I may have to sacrifice one room to put two bathrooms in.
0:41:00 > 0:41:03There are lots of options and many decisions to be made here.
0:41:03 > 0:41:06If he chooses to convert the property back into one house,
0:41:06 > 0:41:10he's going to have to get rid of that external staircase
0:41:10 > 0:41:12and reinstate an internal one.
0:41:13 > 0:41:17Whatever route he takes, there's certainly a lot of work to do.
0:41:18 > 0:41:21What's the sort of timescale?
0:41:21 > 0:41:24Timescale - maybe four to six months.
0:41:24 > 0:41:30But we have to get it sooner for the student market coming in in September.
0:41:30 > 0:41:32If need be, I'll employ people to come as well
0:41:32 > 0:41:34to hurry things along but...
0:41:34 > 0:41:39You definitely get it in there before the start of the student New Year, don't you?
0:41:39 > 0:41:44Yeah, yeah, yeah but I change my mind quite often so you never know.
0:41:44 > 0:41:47Fair enough. Listen, congratulations, both of you.
0:41:47 > 0:41:52- Good luck and I look forward to seeing how you get on.- Yep, thanks.
0:41:52 > 0:41:55Well, clearly Derek and Paul have got a bit of work ahead of them
0:41:55 > 0:41:58to sort this place out but first and foremost,
0:41:58 > 0:42:00they've got to decide exactly what they're going to do with it
0:42:00 > 0:42:04and I definitely think going down the student let route
0:42:04 > 0:42:06is the way to go. What will they decide?
0:42:06 > 0:42:08You can find out later in the show.
0:42:11 > 0:42:14Transforming a property from a worn-out shell
0:42:14 > 0:42:17into a home can be profitable and rewarding.
0:42:17 > 0:42:21But did everything go to plan for the buyers on today's show?
0:42:21 > 0:42:24Let's go back and find out.
0:42:25 > 0:42:29We head back to Manchester now and the district of Fallowfield
0:42:29 > 0:42:34where earlier we met retired husband and wife team, Tim and Audrey.
0:42:34 > 0:42:41They bought this 1920s period house at auction for £129,500.
0:42:41 > 0:42:45They were are going to splash the cash and bring the place up to date
0:42:45 > 0:42:48adding a new kitchen, bathroom and downstairs loo.
0:42:48 > 0:42:50All this work wasn't for themselves
0:42:50 > 0:42:54but potentially to make a home for their son.
0:42:54 > 0:42:56He wasn't able to attend the auction
0:42:56 > 0:43:00so had no idea if Mum and Dad had actually bought it.
0:43:00 > 0:43:05- What was his reaction? - We couldn't phone him, he was in quite an important meeting.- What?
0:43:05 > 0:43:08So he sent a text, he went, "Wow."
0:43:08 > 0:43:13- He sent a text, W-O-W.- Yeah! - Was that it?
0:43:13 > 0:43:15No, another text. "How much?"
0:43:15 > 0:43:16BOTH LAUGH
0:43:16 > 0:43:19Well, let's hope it's got the wow factor
0:43:19 > 0:43:21when the renovation's done.
0:43:21 > 0:43:25Funded by the Bank of Mum and Dad, the whole work was expected
0:43:25 > 0:43:28to cost £15,000 and take three months to complete.
0:43:28 > 0:43:30We returned four months later to see
0:43:30 > 0:43:33if they created their son's dream home
0:43:33 > 0:43:35complete with that black kitchen.
0:43:39 > 0:43:43There's not much change in the exterior of this traditional semi
0:43:43 > 0:43:45except that the garden's been tidied
0:43:45 > 0:43:47creating some immediate kerb appeal.
0:43:50 > 0:43:53Inside, the front room's been replastered and is awaiting
0:43:53 > 0:43:57the finishing touches but the kitchen's a different story.
0:43:58 > 0:44:01That old-fashioned kitchen has gone and behold,
0:44:01 > 0:44:05their son's choice of a sleek, black, glossy one.
0:44:05 > 0:44:09I'm glad to see that just as I'd imagined when I first saw the house,
0:44:09 > 0:44:12the new layout has made the space airy and contemporary.
0:44:12 > 0:44:18What we were trying to do was to fix what was broken with the house
0:44:18 > 0:44:21and put in a much bigger kitchen.
0:44:21 > 0:44:25We've achieved this by knocking out the wall between the old dining room
0:44:25 > 0:44:30and the kitchen which was here and we've blocked off the doorway
0:44:30 > 0:44:33from the hallway into the kitchen which is behind the fridge freezer .
0:44:33 > 0:44:35We've blocked up the back door
0:44:35 > 0:44:38which was rotten and needed throwing away anyway
0:44:38 > 0:44:40which was in the corner there.
0:44:40 > 0:44:42What we've ended up with now is a workable kitchen
0:44:42 > 0:44:46to my son's specifications.
0:44:46 > 0:44:49It's black and shiny and I think it's worked out very well.
0:44:49 > 0:44:52So the kitchen's very glossy and very black
0:44:52 > 0:44:55while the new bathroom is very glossy and very white.
0:44:55 > 0:44:59# The world is black The world is white
0:44:59 > 0:45:04# It turns by day and then by night
0:45:04 > 0:45:08# It turns by night. #
0:45:08 > 0:45:13And like the downstairs living room, there are some finishing touches
0:45:13 > 0:45:16to be done to the two bedrooms but Audrey and Tim really have
0:45:16 > 0:45:19turned this '20s house into a sleek
0:45:19 > 0:45:22- and modern home by maximising the space.- The chimney breast
0:45:22 > 0:45:25took up quite a lot of room in this room
0:45:25 > 0:45:28and we wanted this room to be as large as possible.
0:45:28 > 0:45:30We didn't like the chimney breast in the main bedroom
0:45:30 > 0:45:33so we had it taken out.
0:45:33 > 0:45:36We had to take out the ceiling in the bedroom to get the steel up there
0:45:36 > 0:45:38and the steel came through the window.
0:45:38 > 0:45:40HE LAUGHS
0:45:40 > 0:45:42- It was a big job.- Yes.
0:45:42 > 0:45:45- SHE LAUGHS - A big job but a worthwhile one,
0:45:45 > 0:45:48just like the new patio doors.
0:45:48 > 0:45:51Well, we blocked up the back door to put in the kitchen
0:45:51 > 0:45:56so we needed a fresh back door so we put in these French doors here
0:45:56 > 0:45:58to take advantage of the southern aspect
0:45:58 > 0:46:00and a nice view over the garden.
0:46:00 > 0:46:03We're going to get a fence put up along the boundary
0:46:03 > 0:46:07and we will get a deck put in there so it'll open up onto a deck.
0:46:07 > 0:46:10It'll be a nice, sunny, private spot.
0:46:11 > 0:46:13It creates a perfect finish to the room
0:46:13 > 0:46:17and though contractors were called in to do the plastering, rewiring
0:46:17 > 0:46:20and building work, Tim did get stuck in
0:46:20 > 0:46:22bricking up the old back door.
0:46:23 > 0:46:27What we did, we used the old bricks we'd taken out from when we'd put in
0:46:27 > 0:46:33the French doors and I cleaned them all by hand which was exhausting!
0:46:33 > 0:46:35He appeared to be cleaning them with his nose
0:46:35 > 0:46:38because he was covered in soot, it was horrible!
0:46:38 > 0:46:43But the key question is whether their son got HIS hands dirty.
0:46:43 > 0:46:46He's been telling us what he wants and what he likes,
0:46:46 > 0:46:50that's what he's been doing and in the last week or so since the build,
0:46:50 > 0:46:52we've come to near the end of the main building works,
0:46:52 > 0:46:54he's been doing a lot of painting,
0:46:54 > 0:46:57so most of the painting is down to him and his girlfriend.
0:46:57 > 0:47:02Audrey and Tim reckon the final cost of renovation will be £19,000.
0:47:02 > 0:47:07That's four grand over their original £15,000 estimate.
0:47:07 > 0:47:11Add that to the £129,500 purchase price
0:47:11 > 0:47:16and the total outlay will be £148,500.
0:47:16 > 0:47:18Now that it's nearly completed,
0:47:18 > 0:47:22what are the couple looking forward to most?
0:47:22 > 0:47:25It'll be nice when I can finally see them
0:47:25 > 0:47:28sitting in here with the doors open enjoying the garden
0:47:28 > 0:47:32and doing all the things they meant to do with the house. So...
0:47:32 > 0:47:36It'll be nice not having to be here at eight o'clock every morning!
0:47:37 > 0:47:39But before Tim can put his feet up,
0:47:39 > 0:47:43it's time to ask two local estate agents for their thoughts
0:47:43 > 0:47:47on this £148,500 investment.
0:47:54 > 0:47:57Overall, I'd say the finish so far is very good,
0:47:57 > 0:48:00it gives you confidence for the finished article.
0:48:00 > 0:48:03In particular I like the fact they've closed the kitchen door off
0:48:03 > 0:48:05and opened it out from the dining room
0:48:05 > 0:48:09and the French doors looking out into the garden are a nice touch as well.
0:48:09 > 0:48:14My impression of the property is that they've converted it to a good standard.
0:48:14 > 0:48:16They've put in a new kitchen to a good standard,
0:48:16 > 0:48:20it's a nice finish, put in a new bathroom and a downstairs WC.
0:48:20 > 0:48:22Again, they've done those to a good standard.
0:48:22 > 0:48:26Even though their son is planning to move in,
0:48:26 > 0:48:28would Tim and Audrey make any profit on this property?
0:48:28 > 0:48:35Remember, they've spent £148,500 so what would a resale achieve?
0:48:35 > 0:48:40I think you'd be looking at about £159,950 to market.
0:48:40 > 0:48:45I'd anticipate a final figure in the region of £165-170,000.
0:48:45 > 0:48:47That's roughly what we thought, I think.
0:48:47 > 0:48:50I always hoped to make £10,000 so even the lower figure
0:48:50 > 0:48:53would give you 10,000 or so. I'm satisfied, really.
0:48:53 > 0:48:56- That's done a good job.- Mm-hmm, yeah.
0:48:56 > 0:48:59Those valuations could see a potential pre-tax profit
0:48:59 > 0:49:03of between £11,500-21,500.
0:49:03 > 0:49:05And if the circumstances change,
0:49:05 > 0:49:11there's a potential rental income of between £700-750 per calendar month
0:49:11 > 0:49:15giving the family a possible annual yield of around 6%.
0:49:19 > 0:49:22But even with such good returns possible, for Tim and Audrey,
0:49:22 > 0:49:27this venture has been all about helping their son with a new home.
0:49:27 > 0:49:30Surely that's been a worthwhile exercise?
0:49:30 > 0:49:34- It's certainly been worth it, don't you think?- I think, yes.
0:49:34 > 0:49:36It's worked out OK because I think
0:49:36 > 0:49:39they're going to get the house they want.
0:49:39 > 0:49:42I don't really want to do it again!
0:49:42 > 0:49:46So I'll have to be doing it on my own next time then!
0:49:48 > 0:49:52We now return to Crewe in Cheshire where earlier we saw this
0:49:52 > 0:49:57grand Victorian house complete with some great character features.
0:49:57 > 0:50:00What wasn't so great was some of the other features and the fact
0:50:00 > 0:50:03that the house had been converted into two flats many years before.
0:50:05 > 0:50:10Enter Derek who bought the property for £79,500.
0:50:10 > 0:50:13Along with his mate, Paul, he planned to renovate it.
0:50:13 > 0:50:17The problem was Derek wasn't 100% certain what the final product should be.
0:50:17 > 0:50:22Definitely ideas of what to do with it so still up in the air about that one.
0:50:22 > 0:50:25Right. You said, "originally it was for investment"?
0:50:25 > 0:50:29Yeah, it was to change it from two flats to a house for a family
0:50:29 > 0:50:33but now I've had some advice so I was maybe thinking about student lets.
0:50:33 > 0:50:35- Oh, wow.- So I'm not sure.
0:50:36 > 0:50:39Well, whatever Derek decided it was nice to know that the house
0:50:39 > 0:50:41would be restored as one property.
0:50:41 > 0:50:45But with only one renovation under his belt,
0:50:45 > 0:50:48I'm worried that Derek's background as a chef and kitchen manager
0:50:48 > 0:50:51won't have fully prepared him for the challenge ahead.
0:50:51 > 0:50:55We returned four months later to see if this place was still
0:50:55 > 0:50:58a dog's dinner or if Derek had cooked up a storm.
0:51:01 > 0:51:04Well, for starters the exterior looks good
0:51:04 > 0:51:07with a new double-glazed front door and windows.
0:51:07 > 0:51:09And the main course...
0:51:18 > 0:51:19..well, what a treat.
0:51:19 > 0:51:22Derek has completely renovated the whole ground floor
0:51:22 > 0:51:26turning it into a lovely, light, spacious area.
0:51:30 > 0:51:32A new kitchen has been installed.
0:51:33 > 0:51:37At the rear, the old kitchen-bathroom has been
0:51:37 > 0:51:41turned into a useful utility and shower and loo area.
0:51:41 > 0:51:47There's been a good clean-up outside with new double glazing added too.
0:51:47 > 0:51:50The old garage has been knocked down and the area made over
0:51:50 > 0:51:56to create a new car parking space. But the biggest change?
0:51:56 > 0:51:57Well, I wasn't quite sure
0:51:57 > 0:52:02whether I was keeping two flats or putting it back into one house
0:52:02 > 0:52:06but I decided one house so I've removed the external staircase
0:52:06 > 0:52:09and the best thing about it is I managed to sell it for £400
0:52:09 > 0:52:11and get it removed as well.
0:52:11 > 0:52:14So the house is now one property and making it so
0:52:14 > 0:52:17involved this major transformation inside.
0:52:19 > 0:52:22This is the staircase we installed.
0:52:22 > 0:52:25It was more straightforward than I thought,
0:52:25 > 0:52:28we just cut out of the floor, took the ceiling away
0:52:28 > 0:52:33and the staircase fitted in quite neat and tidy.
0:52:33 > 0:52:35Upstairs now has three bedrooms.
0:52:35 > 0:52:41The incredibly large front bedroom and two fair-sized ones.
0:52:41 > 0:52:45The middle and the new one are where the former kitchen was.
0:52:46 > 0:52:49And space has been taken from that room
0:52:49 > 0:52:53to create a larger bathroom. Fortunately for Derek,
0:52:53 > 0:52:55converting the house back into a single dwelling
0:52:55 > 0:52:57didn't give him any headaches.
0:52:57 > 0:53:02It was quite simple, actually because it wasn't split on the deeds
0:53:02 > 0:53:07as two flats so it was just a case of reinstating the staircase
0:53:07 > 0:53:12and the usual red tape rigmarole but it was quite straightforward.
0:53:13 > 0:53:16Well, the paperwork may have been easy but as expected,
0:53:16 > 0:53:20a renovation of this size did present some problems.
0:53:20 > 0:53:26Ceilings had to be raised and floors relayed due to bowing joists.
0:53:26 > 0:53:28But the house now looks in sparkling form
0:53:28 > 0:53:31and considering Derek's four to six month schedule,
0:53:31 > 0:53:35it's a great achievement to get this far in four months.
0:53:35 > 0:53:39I've been here almost every day. I had three days off in four months.
0:53:39 > 0:53:45Doing two jobs at the same time is hard but it's different jobs
0:53:45 > 0:53:47so it's fun doing this at the start.
0:53:47 > 0:53:50Getting to the end is a pain with the painting.
0:53:50 > 0:53:53# When you're a hard-working man
0:53:53 > 0:53:57# A hard-working man, yeah. #
0:53:59 > 0:54:01This refurbishment wasn't a one-man show.
0:54:01 > 0:54:05Contractors were called in to do the plastering and rewiring
0:54:05 > 0:54:07and with friends and family getting stuck in,
0:54:07 > 0:54:10Derek managed to keep the costs to 15 grand
0:54:10 > 0:54:14when he'd budgeted 15 up to 20
0:54:14 > 0:54:17so he's within schedule and budget.
0:54:17 > 0:54:20Add that to his purchase price of £79,500
0:54:20 > 0:54:24and his total outlay is £94,500.
0:54:24 > 0:54:27Has he decided what to do with it?
0:54:27 > 0:54:30I will have a look at selling it first to release cash again
0:54:30 > 0:54:36but rental market would be possibly students to get the biggest return.
0:54:36 > 0:54:40Whichever's more suitable comes first, I think.
0:54:42 > 0:54:45Well, it seems Derek won't be rushed into a decision.
0:54:45 > 0:54:48We asked two local estate agents what they thought
0:54:48 > 0:54:50of this £94,500 investment.
0:54:50 > 0:54:54Overall impressions of the property now I've seen it done,
0:54:54 > 0:54:56it's done to a good standard.
0:54:56 > 0:54:58'The things which he's done, making the bathroom
0:54:58 > 0:55:00'that little bit bigger,'
0:55:00 > 0:55:03the utility area and the downstairs shower room,
0:55:03 > 0:55:05overall, he's done a good job to the property.
0:55:05 > 0:55:08I think it's very, very nice. They've done a good job.
0:55:08 > 0:55:10The refurbishment's super.
0:55:10 > 0:55:13They've kept some of the original features like skirting boards,
0:55:13 > 0:55:16coving, but they've updated the kitchen and bathrooms
0:55:16 > 0:55:18to a very good standard.
0:55:18 > 0:55:22Seems the house gets the thumbs-up from the estate agents
0:55:22 > 0:55:27but has Derek made a profit on his £94,500 investment?
0:55:27 > 0:55:28What could a resale achieve?
0:55:28 > 0:55:30If I was putting this house on the market
0:55:30 > 0:55:31as a family home as it is today,
0:55:31 > 0:55:36I would ask in the region of £135,000-140,000.
0:55:36 > 0:55:38As a three-bedroomed terrace property,
0:55:38 > 0:55:42I would recommend an asking price of around £135,000.
0:55:42 > 0:55:46Those valuations could see Derek make a potential pre-tax profit
0:55:46 > 0:55:51minus the usual selling expenses of around £40-45,000.
0:55:51 > 0:55:55But he still hasn't decided what he's going to do with the property.
0:55:55 > 0:55:58Would the potential rental figures help make his mind up for him?
0:55:58 > 0:56:02To rent out as a refurbished three-bedroom family home,
0:56:02 > 0:56:04you'd be looking to ask in the region of around £600
0:56:04 > 0:56:07per calendar month for rental.
0:56:07 > 0:56:10My rental valuation would be £595 per calendar month.
0:56:10 > 0:56:14Those figures for just renting this is a house could mean Derek
0:56:14 > 0:56:19making a healthy yield of around 7.5% which isn't bad.
0:56:19 > 0:56:22Well, whatever he decides - to rent or sell -
0:56:22 > 0:56:24either way, the returns look good.
0:56:24 > 0:56:27With this successful renovation under his chef's hat,
0:56:27 > 0:56:31it looks like the taste of property developing has tempted Derek
0:56:31 > 0:56:33to return for seconds.
0:56:35 > 0:56:39I've already been having a nosy at another one
0:56:39 > 0:56:43which is in a pretty bad condition
0:56:43 > 0:56:48but you have to go for them to put profit back into the house.
0:56:50 > 0:56:54Whether you're a seasoned professional or a property novice,
0:56:54 > 0:56:57there's always lessons to be learned buying property.
0:56:57 > 0:57:00So make sure you join us next time for more Homes Under The Hammer.
0:57:00 > 0:57:02- We'll see you then.- Goodbye. - Goodbye.
0:57:21 > 0:57:26Subtitles by Red Bee Media Ltd