Episode 76 Homes Under the Hammer


Episode 76

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Transcript


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Hello. In today's challenging market, could you hack it in the world of property?

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-And if you get it right, it's such an exciting way to earn money.

-Yes.

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It can be very rewarding buying your home under the hammer.

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There are tense moments in the auction room. Who will make the right bid at the right price?

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Yes, property can change people's fortune for better and worse.

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So what inspired the people who bought on today's show?

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On a trip to Chatham in Kent, I appear to have stepped back in time.

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It's not been decorated since the '80s.

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Whereas in Staffordshire, it's time to salute the humble building block.

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Thank you, Staffordshire or Stoke-on-Trent bricks.

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And in County Durham there are things inside this house that really aren't great.

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I've got a horrible feeling it's not going to get better outside.

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All these properties have been sold at auctions and we'll find out who bought them and what they paid

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-when they went under the hammer.

-Your lot, sir. Well done.

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I've come to the Kent town of Chatham.

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Situated on the River Medway, its naval dockyards date back to the 16th century.

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The refurbishment of the waterfront has transformed the local area and brought it bang up to date.

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I'm here to see a house that was built in the 1950s,

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around the same time as the Queen's Coronation and at the end of food rationing in Britain.

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A time of celebration and when house builders favoured generous proportions and large plots.

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Can you tell I'm a fan of the era?

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So what is the guide for this sizeable three-bedroom property?

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£110,000-£120,000.

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# Lost in the '50s tonight... #

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'On closer examination, this house might be a bit lost. It certainly needs some sprucing up,

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'but has plus points like a garage and double glazing.'

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You know, porches are really good when it's cold. They keep such a lot of the freezing wind out in winter.

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Now this is in dire need of a major facelift here.

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I don't think this place has been decorated since the '80s,

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but I'm looking beyond these very dated brown doors in this sad timewarp of a kitchen

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and I'm imagining a crisp, clean, contemporary home for somebody.

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OK, so you don't get the old architectural features in here, but the trade-off is space.

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And we all want more of that.

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'The conservatory off the kitchen is a bonus, but the layout is rather convoluted.

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'Having to access the living room from the kitchen is not ideal.

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'The downstairs area of this house is begging to be reconfigured.'

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I think you really need to clear this house of its furniture before you can see what it's like.

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You could think about potentially knocking this wall down

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and really opening up the kitchen, using this area as a dining room,

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but you've got the additional space of this little conservatory at the back.

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OK, it's got a flat roof. You always get a few problems with flat-roofed conservatories.

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There may have been a leak. Somebody's been poking around up there to have a look.

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So it's advisable to get somebody in to have a look at the roof, but I look at it as a bonus room.

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It's lovely and spacious with a fantastic view out to the garden,

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but single-glazed windows, I think they're rotten, so I'd take the whole front out.

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You could replace it with some nice bi-folding doors or even big French doors.

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Imagine how nice it would be here in summer. Fantastic.

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'But before you get carried away, the roof required urgent attention.'

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# When the weatherman brings the rain

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# I have found my winter coat again... #

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'But it's not just the flat roof of the conservatory. There are signs of damp at the front as well.'

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Whenever I view a property, I always make it my business to look up.

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Just have a look at the guttering and downpipes.

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If they're cracked or blocked, it can cause no end of problems,

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so factor them into your budget. They're often overlooked, but are so important.

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This house most definitely requires some new guttering.

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If I took this house on, it would be on the top of my "to do" list.

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'Thankfully, there doesn't seem much to add to that list upstairs.

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'The layout of this semi is fairly standard for its era and type,

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'with two double bedrooms

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'and a single bedroom. Even with all this furniture and wardrobes, there's plenty of room.

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'It is going to need redecorating, but you would expect that.

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'Of course, you wouldn't normally expect to have to clear out furniture.

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'And something else for that "to do" list is the bathroom.

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'That needs a total overhaul.

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'With major reconfiguration, roofing, guttering, a new kitchen and bathroom, that list gets long.

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'With all that to think about, did the guide price of £110,000-£120,000

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'make this house from the Fabulous Fifties nifty? Or not?

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'What does a local estate agent make of it?'

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It's predominantly a residential area

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with fantastic links to the M2 and M20 motorways.

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I like that it's a corner plot with the garage to the side.

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They are good-sized rooms with a conservatory off the back.

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-It would appeal to a family.

-'Let's discuss figures. Once done up, how much could a buy-to-let investor

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'achieve here?'

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The rental market is very buoyant.

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I do believe that we would achieve approximately £800 per calendar month.

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'And what could it be worth after a full makeover?'

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In the current marker conditions, I do believe the property will achieve approximately £160,000.

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I'm worried this could turn into a bit of a money pit,

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but the bones are here, so jus keep to a strict budget

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and then somebody could make a healthy profit. Who wanted this at auction?

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Lot 30 we go to now, which is a three-bedroom semi for improvement.

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I'll take 100 to start me. £100,000. I'm on the way.

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And 10 now do I see? We all know it's worth it. 110 at the back.

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115 do I see? 115 I have. 118 against you now at the back.

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118 bid I've got. 120?

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120 can I say? 120, I'm obliged. 122 now. It's against you.

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120,000 in the middle of the room.

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122 I'm looking for. 122. 124?

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123. 124.

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124, can I say? Yes, 125. And 5.

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125. And 6. 126? No?

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At 125,000, standing again, I will sell for the first time. £125,000 for the second time.

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Third and final time at £125,000. Are we all done?

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'While the successful bidder Bob kept his cool, his wife Christine is a lot more excited.

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'They live 25 miles away. Bob owns a printing business where his son, Nigel,

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'started his printing career before being headhunted by another company.

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'I met Bob and Nigel at the property to hear about their plans.'

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-Guys, congratulations. I bet you are so happy you got this.

-Yes, we certainly are.

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-Bob, you were at the auction.

-I was.

-What was that like for you?

-It was very good, very exciting.

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I was there with my wife, Christine. We've viewed the house before.

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Unfortunately, we didn't have time to view inside, but now we have actually purchased it,

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-we are pleased.

-So, Nigel, what did you think when your dad spent that amount and he'd not seen inside?

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I was a little bit surprised. They've always bought commercial properties.

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I've been inspired by your programme and I've always wanted to have a go.

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Dad's had an accident in the past and I've taken over looking after the commercial side

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-of his portfolio, in a way.

-Bob, what happened to your leg?

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I had an industrial accident.

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And there were a few complications afterwards and so I needed several operations to correct it,

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particularly the alignment of the lower part.

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Bob was out of action for quite some time and relied on his son, Nigel, heavily during that period.

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A few months ago, I had a frame around my leg. At 5 o'clock in the morning,

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before he set off for work in London, he was tapping on the door to alter it to straighten the leg.

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And at ten o'clock at night, he'd finished his work from five until ten in the evening,

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back in again at the family home to make sure everything was fine. You can't ask for any more.

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I can't ask for any more.

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-# Couldn't ask for more

-What more could I ask for?

-Couldn't ask for more... #

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'This commitment is going to extend to the two working together on this property.

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'They have experience in the commercial sector, but this is a new venture for them.'

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Bob, why the change to residential?

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I think as I'm thinking of retirement, it's a form of pension.

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Also, if I get my figures right, I'm looking for a return

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of probably...6% return.

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-Mm-hm.

-Far better than you can get in the bank.

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What are you going to do to turn this place around? It's in a right old state.

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Obviously, we'll clear the place. Then we'll have the place rewired,

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new bathroom suite upstairs, plaster each room, redecorate, new carpets.

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The kitchen, we'll perhaps move the doorway slightly. We'll have some double doors out here

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with a bit of decking to the side. We're looking for it to be a family home.

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-At the moment, it's neglected.

-Is it a father and son project or will you do most of it yourself?

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I think I'll have mainly the input in it, with a bit of fatherly advice

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where he feels I'm falling off the rails!

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But, yeah, this hopefully will be the start of something quite big.

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I've been watching my father's footsteps on the commercial side.

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Now we're going into residential. It's a good starting place for me.

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It's great Bob has Nigel to help out with this renovation.

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The only downside with this project is that they aren't that local.

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Both live about 25 miles away.

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So how are they going to cope with the commuting?

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We've just purchased our motorhome. A 21-foot motorhome.

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We named it Brian. We've seen the state of the kitchen and bathroom. Not up to scratch.

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So we intend to use the motorhome on a three or four-day spell.

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-How much do you intend to spend?

-£16,500.

-To do everything?

-Yes.

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-And what's your timescale?

-We're looking at four months.

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What do you want to do with it, Bob? Sell it on with a profit?

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I think I'd look at both options, but initially it was to create a comfortable family home.

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I'm really looking forward to seeing it. Good luck with this project. I hope it really goes well.

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-Thank you.

-Well done.

-Thank you.

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Thank goodness for Brian the caravan. Without his trusty motorhome,

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Bob wouldn't be able to stay on site and keep on track.

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I'm worried, though, about that budget. If he spends too much, he could even make a loss.

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Join me later to find out what happens.

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Today I'm in the Hartshill area of Stoke-on-Trent,

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a really popular area for commuters with easy access to the motorway.

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But you've also got the University Hospital of North Staffordshire and that means potential renters,

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in terms of students and hospital workers. Sounds like a great place to buy a property at auction.

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Hospitals are always a great source of potential tenants, particularly a university hospital like this.

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Medical staff often move around the country while training, so they look to rent rather than buy.

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It sounds like this property that went to auction guided at £65,000 may appeal to buy-to-let investors.

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Like many houses in the area, the property I'm here to see is a traditional terrace,

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but it's an end terrace, which is an added bonus. Seems in good nick.

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So with that hospital, the potential rental there, it could be a safe bet.

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It's all about what we find inside.

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So any surprises in store? A very traditional layout.

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Through into your front sitting room, I'd have liked a fireplace,

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but that could be put in simply. I know it's just decoration, but that's quite sweet.

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"Life isn't about waiting for the storm to pass, it's about learning to dance in the rain."

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Well, let's hope that the rain in this instance is kept well out.

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But I'm not seeing anything that concerns me too much so far.

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Into the rear sitting room. Traditional layout, stairs there,

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a fireplace which has been blocked up. I'd like that opened up.

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Traditionally, the house would have stopped at this point. Somebody's built an extension.

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That's where the kitchen is housed. It's not huge, but it makes the most of the space there is.

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It could definitely be improved by getting rid of this humungous cupboard with the hot water system.

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Remove that, put a combi boiler in and open this up even more.

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At the moment, this is your bathroom. It's very small, right at the back here.

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Not too many issues with the location, but the size is lacking so get rid of that cupboard,

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maybe move the back door a bit, create a much nicer family bathroom

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and you're doing pretty well.

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'The bathroom may be small, but so is everything in it.

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'Look at the basin. It would be no use for sloshing around. It's tiny!'

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# Tiny bubbles... #

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'I like a bubble bath as much as the next man, but I'm not keen when they're on the wall.

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'It might just be condensation, but it might be signs of damp.'

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# Tiny bubbles... #

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'The kitchen looks tired and needs upgrading,

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'but it's a relatively small space so shouldn't be too big a job.'

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# Pink, it's my new obsession... #

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'Upstairs in this house that was guided at £65,000 plus, there's a pink colour scheme

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'right the way through to the rear bedroom.

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'It's a good-size room in good order, like the front bedroom, where the colour's been replaced

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'with a monochrome animal print feature wall.

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'You do get the feeling that whoever lived here before had a really happy, optimistic outlook on life.

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'Will the outside of this house be as upbeat?'

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At the rear of the property, as well as the extension, you've got this garden. It looks a bit drab,

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partly to due with the time of year, but get a nice bit of lawn in there, some nice plants,

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and it'll make a big difference. While I'm out here, one thing that strikes you is the bricks.

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It's worthy of note. They are absolutely beautiful, probably very local.

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And you know what? I've got a thing about bricks.

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This is a modern brick, right? Look how boring that is.

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It's orange and all the same colour. Now this is a traditional brick,

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probably fired in this area. Look at the colours - you've got blacks, dark oranges, yellows.

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You probably think I'm going loopy here, but this would have been... What do you mean, "Yes"? No.

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This would have been made locally, probably hand-fired,

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and I think it's a really wonderful architectural feature.

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So thank you, Staffordshire or Stoke-on-Trent bricks.

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'As the property's an end of terrace, you get a lot of bricks on show. Shame they're painted over.

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'The detail at the front is very nice, even though the windowsills need attention.

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'We asked a local estate agent for her advice about the work required here.'

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I would recommend new kitchen, attention to the bathroom,

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attention to the damp downstairs,

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double glazing and redecoration throughout.

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'So once you've cleared that little lot up, what standard of refurbishment would be advisable?'

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I would recommend a basic specification throughout

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because I could see this going into the buy-to-let market and being rented out.

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-What rental income could it generate?

-Once modernised,

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I recommend renting this property out at £475 per calendar month.

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What about a re-sale valuation, the possible return on the investment?

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Once this property has been modernised to a basic standard, I'd be looking to achieve

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in the region of £70,000-£75,000.

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Well, it's a property that's got a lot going for it. A good area, a solid house,

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which doesn't need too much doing to it. And you get those fantastic Staffordshire bricks for free.

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Let's see who fancied it.

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Lot number 59. An end-of-terrace house close to the hospital. Good investment opportunity.

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What shall we say? 50,000?

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45, then? 45 bid. Thank you.

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£45,000. Can we say 50?

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Yeah, 50 bid. At £50,000.

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At 50. I'll go in ones if it helps.

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Yeah, 51. 52.

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53. 54. 55. 56.

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57. 58.

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59 anywhere else? At £58,000.

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Are we all done?

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At £58,000 for the first time.

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At £58,000 for the second time.

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Third and final time, then, at £58,000. Are we all done?

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-Sorry. That's just not quite enough. If the bidders would like to talk.

-'This lot was withdrawn

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'because it didn't reach its reserve price, the price below which the vendor isn't willing to sell.

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'However, a satisfactory deal was struck eventually with husband and wife team Sharon and Chris.

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'They've been married for 29 years and live locally.

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'Chris works full-time as a telecoms engineer and Sharon part-time as a medical administrator.

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'I met up with them to find out their plans.'

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-Chris, Sharon, lovely to meet you.

-Hello.

-Congratulations.

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-Why didn't you bid in the auction?

-We just bottled it on the day.

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We didn't dare. We couldn't believe it would have gone for less than the asking price.

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The reserve was 65. Then it was 58 it got up to.

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-But you didn't think about bidding?

-No.

-We looked at each other to bid, but didn't.

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It does happen quite quick. I can understand. In the heat of the moment, you have to decide quickly.

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It ran away with us a bit. It is quick.

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We heard this bid of £58,500 or thereabouts

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and then I dropped a bit of paper on the floor and by the time I'd come back up, "It's not enough."

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-And we thought, "Well..."

-So you went up. Were you told then what price you needed to pay?

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Yes, they said 60,000, so we were happy with that price.

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'I'm not surprised they reckon they've got an unexpected bargain at £60,000 for this end-of-terrace,

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'especially as similar houses are selling for around the £70,000-£75,000 mark.

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'But what did they buy this for?'

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Purely rental income. It's a bit of a long-term investment for us.

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We don't see ourselves working until we're 67, as it is now. The pension age keeps increasing

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and pension returns are diminishing and money in the bank isn't getting a great return,

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so we just thought property seems to be the way to go. So we're on the bandwagon.

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-Tell me what you're going to do to sort it out.

-The first thing is double glazing, new doors,

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we're going to replace the fireplace, do something with that, new kitchen.

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We'll have someone look at the tiles. A couple are loose.

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Just general painting and decorating.

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-No layout changes?

-No.

-None planned.

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'So if they're not going to do anything with that cupboard

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'and keep things just as they are, they can probably get away with a minimal spend here.

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'What budget do they have in mind?'

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-Perhaps about £7,000, we think.

-We do have contingencies on that.

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A couple of thousand more. It depends on the roof, if it was completely condemned.

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-And the boiler. We're not sure.

-We need it to be checked. And the electrical wiring

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by somebody who's qualified.

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'They've set themselves a goal of 3-4 months to get it done

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'and will do most of it themselves. They've got another property in Crewe, so they have got experience.'

0:23:480:23:55

How have you found dealing with tenants? A lot of people are put off renting for fear of midnight calls,

0:23:550:24:01

-"My boiler's broken".

-We've had ours fully managed.

0:24:010:24:05

-Right.

-Any problems they've dealt with for us.

-You pay a little bit more to the management agency.

0:24:050:24:11

A percentage to the agent, yes. And we're quite happy so we don't have to get involved, face to face,

0:24:110:24:18

with the tenant. We're a bit soft. If they were a bit short of money one week, we might just say,

0:24:180:24:25

-"Oh, it's OK." So we're quite happy for a management company to just...

-Do that for us.

0:24:250:24:31

-Well, congratulations. Good luck.

-Thanks.

-Look forward to seeing it.

0:24:310:24:36

So Chris and Sharon expanding their property portfolio with this little terrace in Stoke-on-Trent.

0:24:360:24:43

Not too many issues to sort out. Maybe some damp in the bathroom.

0:24:430:24:47

I'm sure they will take it in their stride. Find out how they get on later in the show.

0:24:470:24:53

Coming up: in Dipton, County Durham, there's no getting around the fact

0:24:530:24:58

that for all this house's plus points...the layout's rubbish!

0:24:580:25:03

Back in Stoke-on-Trent, is this going to be Chris and Sharon's last property investment?

0:25:030:25:09

-I'd be quite happy to do another, but we agree to disagree.

-We do.

0:25:090:25:13

But first we find out why Bob and Nigel are so chuffed with their renovation efforts.

0:25:150:25:21

Overall, we're really pleased.

0:25:210:25:23

The Kent town of Chatham on the River Medway has a proud maritime history

0:25:270:25:33

and the redevelopment round the docks is for a new generation.

0:25:330:25:37

Earlier in the programme, this 1950s three-bed semi was bought

0:25:370:25:43

for £125,000 by Bob, who runs his own printing company. His son, Nigel, is also a printer,

0:25:430:25:49

but doesn't work with his dad. Bob has built a buy-to-let portfolio

0:25:490:25:54

of mainly commercial property. The plan was for Bob to project manage this house,

0:25:540:26:00

while Nigel refurbished it on his days off.

0:26:000:26:03

Bob, why the change to residential?

0:26:030:26:06

I think as I'm thinking of retirement, it's a sort of pension.

0:26:060:26:11

Also, if I get my figures right,

0:26:110:26:15

I'm looking for a return of probably...6% return.

0:26:150:26:19

They'd set a budget of £16,500 and four months to refurbish the house.

0:26:190:26:26

Then Bob would decide whether to sell or let it. There have been some delays.

0:26:260:26:31

We meet Bob, Nigel and new puppy Jessie one year and 10 months later.

0:26:310:26:36

But hasn't the wait been worth it?

0:26:380:26:41

The house has a new porch,

0:26:410:26:44

off-street parking and the leaking roof's been repaired.

0:26:440:26:49

You no longer have to go through the kitchen to get to the lounge

0:26:510:26:56

and a new door's been created. Much better!

0:26:560:27:00

The kitchen has a crisp white, black and charcoal colour scheme

0:27:010:27:06

and looks very smart.

0:27:060:27:08

At the back of the house, that dilapidated conservatory that ran all the way along the sitting room

0:27:080:27:14

and kitchen has been split into two rooms, as Nigel explains.

0:27:140:27:19

Initially, we realised we had to rebuild. In doing so,

0:27:190:27:23

we made a garden room here, put some French doors in there,

0:27:230:27:26

put some doors at the back. We split it in two because it was too big to make it one room.

0:27:260:27:33

So we put it in two and made that a utility room.

0:27:330:27:37

Overall, we're really pleased.

0:27:370:27:40

It's a fantastic result, but they did aim to do it in four months. Mm, what happened?

0:27:400:27:46

I was meant to be doing most of the work, but due to my son having a spell where he wasn't well,

0:27:460:27:53

my dad sort of took back over and he's produced it to a very high standard.

0:27:530:28:00

Absolutely. A great team effort.

0:28:000:28:04

The entire house has been replastered and the three bedrooms are superbly finished.

0:28:050:28:12

This 1950s house has big rooms, so the rear bedroom lost a corner to the enlarged bathroom.

0:28:150:28:22

More quality fittings.

0:28:240:28:27

And as if this wasn't enough, they've submitted plans to improve the place further.

0:28:270:28:34

That would be for a granny annexe, single storey, basically, on the side of the property,

0:28:340:28:39

then the main house would have a fourth bedroom en-suite.

0:28:390:28:43

In the meantime, the space has been put to good use.

0:28:430:28:47

I've tried to tidy the whole area up here to create a soft area here

0:28:470:28:53

which could be used for a children's play area, perhaps a pet. We designed it for more of a barbecue area.

0:28:530:28:59

We fenced it off because, basically, the area needed tidying up.

0:28:590:29:03

And I just think it works really well.

0:29:030:29:05

Nigel and Bob have done the decorating themselves,

0:29:070:29:11

but employed qualified gas and electrical tradesmen.

0:29:110:29:14

Did they keep to their £16,500 budget? How much have they spent so far?

0:29:140:29:19

About 26,000.

0:29:190:29:21

25,200, so yes, we've gone over budget.

0:29:230:29:27

Ooh, just a bit! With the £125,000 they paid at auction,

0:29:270:29:31

that takes their total investment here to £150,200.

0:29:310:29:36

There's still the kitchen and bathroom to tile and a few snags here and there.

0:29:360:29:41

The house was rented out before Bob bought it

0:29:410:29:45

which has made him undecided about whether to let or sell.

0:29:450:29:49

It would break my heart, I think, if I came in and found it how it was before,

0:29:490:29:55

so I am sort of split between the two - whether to rent it out or whether to sell on.

0:29:550:30:01

Maybe some expert valuations from two local estate agents

0:30:020:30:06

will help Bob make his choice. What do they think of it?

0:30:060:30:09

What a fantastic job he's done! There are a couple of things to finish off,

0:30:090:30:13

but the standard is fantastic.

0:30:130:30:15

They've done it to a lovely neutral standard throughout.

0:30:150:30:19

It's lovely how they've separated the utility room, giving it a bit of extra space.

0:30:190:30:24

They've utilised the space very well.

0:30:240:30:27

The driveway is fantastic. They've made the bathroom bigger

0:30:270:30:31

by taking a bit off a big bedroom. What a great idea!

0:30:310:30:34

If Bob and Nigel do decide to let it,

0:30:340:30:37

how much income could the house generate in its current three-bedroom configuration?

0:30:370:30:43

If I rented it, I would get £850 per calendar month.

0:30:430:30:46

In the current market, we'd look to achieve £950 per calendar month.

0:30:460:30:50

Those rents would produce a yield of between 6 and 7.5%.

0:30:500:30:53

-I had a vision of 900 a month, so I think we're...

-In the middle.

-..pleased with that.

-Yeah, pleased.

0:30:530:31:00

If they're successful with their planning application

0:31:000:31:04

and decide to sell the property with the permission, how much could it be worth then?

0:31:040:31:09

The third bedrooms are always smaller on these properties. This would sell at £175,000.

0:31:090:31:15

Sale value, we'd look to market this property probably in the region between 180,000 and 190,000.

0:31:150:31:21

That valuation range would produce a gross profit

0:31:210:31:25

of between £24,800 and £39,800 before taxes and expenses.

0:31:250:31:30

A little bit lower than anticipated.

0:31:300:31:34

We were thinking, with the application for the annexe, 195.

0:31:340:31:39

That was the figure we had in our head.

0:31:390:31:42

Maybe adding the extension is the answer.

0:31:420:31:46

You'd like to think it would go up in comparison with what they spent, but I don't think it would.

0:31:460:31:51

I think if they spent £50,000 to extend it, they might get £40,000 more for the property.

0:31:510:31:57

You won't get properties for £250,000 down here.

0:31:570:32:00

If the extension is built, the estate agents' valuations increase

0:32:000:32:04

to between £210,000 and £220,000.

0:32:040:32:07

With all that financial information, is Bob any nearer to deciding whether to sell or rent?

0:32:070:32:14

-I think myself, personally, I'm tempted on the rental element.

-Yeah.

0:32:140:32:18

The finish Bob and Nigel have achieved here is excellent,

0:32:180:32:23

but has it been worthwhile?

0:32:230:32:25

Yeah, it's taken longer than anticipated.

0:32:260:32:30

-But, um...

-A bit of fun.

-Yeah.

-Great.

0:32:300:32:33

Today, I'm in County Durham in the former mining village of Dipton.

0:32:380:32:42

It's approximately 12 miles from Newcastle and three miles from Consett

0:32:420:32:47

and I'm sure it's lovely when the sun shines, but for now, I just want to find some shelter.

0:32:470:32:53

Well, it's a bit of a yucky old day today, but who cares?

0:32:530:32:57

It's one of those ex-miners' homes I'm here to see.

0:32:570:33:01

This is it. It's a two-bedroom mid-terrace. It had a guide price of 30,000 quid.

0:33:010:33:06

Let's get inside!

0:33:060:33:08

Well, let's hope it's drier inside than it is out.

0:33:120:33:16

And to be fair, I have been in some houses where that's not the case.

0:33:160:33:21

But what about the layout? A bit of a corridor here. I don't particularly like that.

0:33:210:33:26

It feels very sort of cramped in.

0:33:260:33:28

That feels like a stud partition wall, so maybe that wouldn't be too bad to get rid of.

0:33:280:33:33

Under-stairs cupboard... Does that look like the sort of thing you'd expect a telephone to be in?

0:33:330:33:39

It just does at first glance to me. Through into this room here.

0:33:390:33:43

I guess this was previously the kitchen, but that's now elsewhere.

0:33:430:33:47

You've got this room with far too many doors in it.

0:33:470:33:51

It makes it a pretty useless space, to be honest.

0:33:510:33:55

Through into this side of the front of the property, the other side of that wall,

0:33:550:34:01

and you've got your living room area. You've got an open fire with a gas fire placed in front of it,

0:34:010:34:07

but the layout's rubbish, isn't it?

0:34:070:34:09

# Something better change

0:34:090:34:12

# I said something better change... #

0:34:120:34:15

"Rubbish" is perhaps a rather strong word, but what I mean is that it doesn't feel right

0:34:160:34:21

and there's no natural flow.

0:34:210:34:23

The lounge is only reachable via the corridor and through the back reception room

0:34:230:34:28

which has now become a corridor leading here, there and everywhere.

0:34:280:34:33

It really does need to be changed.

0:34:330:34:35

Things aren't much better with the kitchen.

0:34:350:34:38

For some reason, the kitchen has been positioned in this little lean-to area at the back.

0:34:380:34:44

It's bad on so many different levels. I don't know where to start.

0:34:440:34:48

If you look at the thickness of the walls here,

0:34:480:34:51

that's not going to be a cavity, so there is no damp-proofing in here.

0:34:510:34:55

It's got lots of glass and lots of light, but it's a very cramped space

0:34:550:35:00

and for a room that you use such a lot, it's not good.

0:35:000:35:03

I've got a horrible feeling it won't get better when I go outside.

0:35:030:35:07

Yeah, pretty much as I predicted,

0:35:080:35:10

a flat, felt roof.

0:35:100:35:13

Not ideal at all. Basically, it's got to come down.

0:35:130:35:16

The good news though is you've got a decent-sized rear yard,

0:35:160:35:20

some outbuildings and, more importantly,

0:35:200:35:23

space to potentially put a proper extension on this place.

0:35:230:35:28

Yes, the outbuildings might be worth keeping

0:35:280:35:31

as a useful workroom space,

0:35:310:35:33

and there's an outside loo,

0:35:330:35:36

but the pre-fab extension, well, that simply has to go.

0:35:360:35:39

# Since you gotta go

0:35:390:35:42

# Well, you'd better go now... #

0:35:420:35:44

Not only does it not meet current building regulations, it's starting to fall apart.

0:35:480:35:53

But what about the rest of the house?

0:35:540:35:57

Well, upstairs, I think the bathroom might need a bit of attention,

0:35:570:36:01

although it's not black and white whether to keep or replace the suite!

0:36:010:36:06

And the two bedrooms? Well, redecoration and new carpets are a must.

0:36:080:36:13

The electrics need replacing and there's work needed on the ceilings.

0:36:130:36:17

Once the old furniture is removed, they're both a decent size,

0:36:170:36:21

so, overall, I think this place is worth having a go at upgrading and improving.

0:36:210:36:26

What does a local estate agent think of this two-bedroom, terraced house?

0:36:310:36:35

It's a nice-looking property from the front. It's a stone-fronted house.

0:36:380:36:42

It's a good, traditional, solid property.

0:36:420:36:45

Some work needs to be done to the property,

0:36:450:36:48

including pulling down the kitchen offshoot,

0:36:480:36:51

which would either be then replaced or simply left with the dining area turned into a kitchen/diner.

0:36:510:36:58

If this property that was guided at £30,000 was rejigged and refurbished,

0:36:580:37:04

how might it fare on the rental or re-sale markets?

0:37:040:37:08

In the current market, once renovated,

0:37:080:37:11

I think this property would be achieving somewhere in the region of £70,000 to £75,000.

0:37:110:37:17

You would put the house on the rental market for somewhere in the region of £400 to £425 per month.

0:37:170:37:23

Those valuations suggest that take away some parts of the house and re-divide others

0:37:230:37:29

and this property could add up to being a good investment.

0:37:290:37:33

Well, intrinsically, this is a good-sized house.

0:37:340:37:37

It's just that the internal layout is a bit mixed up at the moment,

0:37:370:37:41

so I don't think it would cost too much to put it right.

0:37:410:37:45

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

0:37:450:37:48

So we're going to move now down to Stanley, County Durham.

0:37:520:37:57

Mid-terraced house, it requires refurbishment. It has gas central heating, partial double glaze.

0:37:570:38:02

I'll start at 24.

0:38:020:38:04

Thank you, at 24,000, to get us going.

0:38:040:38:07

£24,000 bid.

0:38:070:38:09

Do I have 25 anywhere else? 25 bid.

0:38:090:38:12

26. 27. 28.

0:38:120:38:15

29. 30.

0:38:150:38:17

31. 32? 31,000 on the front row.

0:38:170:38:21

You're out. I'm at 31,000 on the front row.

0:38:210:38:24

I'll take 32? 32 bid.

0:38:240:38:27

33. 34. 35.

0:38:270:38:29

36. 37. 38.

0:38:290:38:31

39. 40.

0:38:310:38:34

41. 42. 43.

0:38:340:38:37

43 at the back. 44.

0:38:370:38:39

45?

0:38:390:38:41

I'll take 500 if it helps. 44 and a half?

0:38:410:38:44

It's on the front row at 44. 44 and a half. 45.

0:38:440:38:49

45 and a half? Front row at £45,000.

0:38:490:38:53

I'll take a half? I'm selling once at 45.

0:38:530:38:57

I'm selling for the second time at £45,000.

0:38:570:39:00

Sold to the gentleman on the front row at 45.

0:39:020:39:05

'And so for £45,000, £15,000 over the guide price,

0:39:080:39:13

'the successful and delighted bidder was Ray.

0:39:130:39:16

'He works as a sportswear supplier and has been keen to start a property developing sideline.

0:39:160:39:23

'This is his first investment.'

0:39:230:39:26

-Ray, great to meet you.

-Thank you.

-Congratulations. Tell me why you wanted to buy this place.

0:39:260:39:32

I live near the village, 400 metres down the road.

0:39:320:39:35

I thought, "I know the area well, it's an ideal property, especially as it needs some work done to it."

0:39:350:39:41

Ideal location. I can come at night-time after work.

0:39:410:39:44

-Will it be an investment property?

-Hopefully, renovate it top to bottom

0:39:440:39:48

and most likely, put it on the buy-to-let market.

0:39:480:39:52

Why did you choose this house, other than it's in the village?

0:39:520:39:56

I got this one because I missed out on another one, so everything was all set in place.

0:39:560:40:01

This one came up and I jumped at it straight away because I wanted to get started,

0:40:010:40:06

get something on the rental market as soon as possible.

0:40:060:40:09

'Despite this being Ray's second choice, he had seen the property.

0:40:090:40:13

'In fact, he tried to buy it before the auction, but his £38,000 offer was rejected.

0:40:130:40:19

'But now, having paid £45,000, the house is finally his

0:40:190:40:24

'and he can at last get started on the renovation.'

0:40:240:40:28

-It's got an interesting layout.

-It has. I'm going to change that. That's one plan.

0:40:280:40:33

Tell me how you'll sort it out.

0:40:330:40:36

Where we're standing now, hopefully, will be the kitchen, so it's going to be a kitchen/diner.

0:40:360:40:41

I'll block this off and have the original door to the right.

0:40:410:40:45

-So that will be a front sitting room?

-It will be, yes. It'll be all separated.

0:40:450:40:50

And the extension at the back?

0:40:500:40:52

I'll remove that altogether and tidy the back up, make it a bit more presentable.

0:40:520:40:57

Upstairs, I'll modify everything, new central heating system, new electrics

0:40:570:41:02

and fresh plaster to give it nice, sharp edges and then decoration throughout.

0:41:020:41:07

-What's the timescale for the work?

-Two to three months.

-The budget?

0:41:070:41:10

I'll hopefully be in between 8,000 and 10,000 to complete everything.

0:41:100:41:15

'Ray seems to know exactly what he wants to do here.

0:41:150:41:19

'Indeed, as he's local, he has seen inside similar properties,

0:41:190:41:23

'so he knows what layout changes can be done and, more importantly, which alterations are worth doing.

0:41:230:41:30

'But even so, there's a fair amount of rearranging, rebuilding and rejigging to be done here.'

0:41:300:41:36

-Who's doing the work?

-I'm going to do most of it myself with friends and contractors to help out.

0:41:360:41:42

-What do you do when you're not doing this?

-I work for a sportswear company.

0:41:420:41:47

I supply team kits to schools, colleges, universities and local sports clubs.

0:41:470:41:51

Where have the DIY skills come from?

0:41:510:41:54

It's just a hobby, something I really enjoy.

0:41:540:41:56

-I grew up with a lot of it and I want to get more involved in it.

-Good stuff.

0:41:560:42:01

-How many properties have you done?

-This will be my second renovation. It's my first investment property.

0:42:010:42:07

The other one is my home and we renovated that from top to bottom. That gave us the bug.

0:42:070:42:13

What tempted you into doing it now?

0:42:130:42:15

The low house prices. I'm trying to take advantage of it when there's some good deals out there.

0:42:150:42:20

-Congratulations.

-Thank you.

-Good luck. I look forward to seeing how you get on.

-That's great. Thank you.

0:42:200:42:27

So, Ray's first investment property and he's sticking to the area he knows well,

0:42:270:42:33

which is a really good thing to do.

0:42:330:42:35

How is he going to get on? Will this be here when we get back?

0:42:350:42:40

You can find out later in the show.

0:42:400:42:42

If you want to profit from property, timing is crucial and you have to be flexible with your plans.

0:42:450:42:51

And not let time pass you by. Let's see how our buyers got on today.

0:42:510:42:56

We're heading back to Hartshill, Stoke-on-Trent now

0:42:590:43:03

where earlier, we met Chris and Sharon.

0:43:030:43:06

They'd purchased this two-bed, end-of-terrace property for £60,000.

0:43:060:43:11

Just! The property didn't reach the reserve price in the auction room,

0:43:110:43:16

even though that was within the couple's budget.

0:43:160:43:19

-I'm confused. Why didn't you bid in the auction?

-We just bottled it on the day.

0:43:210:43:26

We couldn't believe it would have gone for less than the asking price.

0:43:260:43:30

-But you didn't think about bidding at that point?

-No.

-We looked at each other to bid, but didn't.

0:43:300:43:37

So neither raised their hand in the auction room,

0:43:370:43:40

but luckily, it didn't put paid to their plans to purchase this place.

0:43:400:43:45

Once they did, they aimed to get it ship-shape in three to four months.

0:43:450:43:50

We're now back six months later to see if they've managed to bring out the sunny side of this property.

0:43:510:43:58

# Let the sun shine, let the sun shine, let the sun shine

0:43:590:44:04

# Let it all go, let it all go, let it all go

0:44:040:44:09

# Let the sun shine, let the sun shine, baby

0:44:090:44:13

# Let it all go, just let it all go, baby... #

0:44:130:44:17

And it seems they've stuck to their plans here.

0:44:170:44:21

There's new double glazing, new doors,

0:44:210:44:24

new carpets, a new fireplace downstairs

0:44:240:44:27

and there's a brand-new kitchen.

0:44:270:44:29

The kitchen's been stripped out.

0:44:330:44:35

There was some damp on this side of the wall which has gone back to plaster.

0:44:350:44:40

That side of the wall was skimmed, but we ripped out the entire kitchen.

0:44:400:44:44

The cooker was originally over there with just a gas point which we've had taken out

0:44:440:44:50

and then we moved the oven to where it is now and it works quite nice.

0:44:500:44:54

Overall, the kitchen came out just about as we planned, really. It's turned out quite nice.

0:44:540:45:00

Because I've done all the work myself, it's come out to no more than £1,200.

0:45:000:45:05

That includes the tiles, all the furniture and the flooring, tiling. That's it at the very most.

0:45:050:45:11

So that's part of their budget explained, but what about the rest?

0:45:110:45:16

They aimed to spend £7,000 on the renovations here,

0:45:160:45:20

but had a contingency of up to 9,000.

0:45:200:45:23

Pretty much on target, really.

0:45:230:45:26

I think the whole lot, with solicitors' fees,

0:45:260:45:29

any agents' fees and stuff like that in purchasing the property, it's come out to no more...

0:45:290:45:35

-Seven and a half is about what we came to last night.

-Yeah.

0:45:350:45:38

Keeping their budget at 7,500 is pretty impressive,

0:45:400:45:44

given that this project wasn't as straightforward as it looked,

0:45:440:45:48

particularly when it came to sorting out the damp issues in the house.

0:45:480:45:52

Those involved pulling up floorboards and installing a damp-proof course

0:45:520:45:57

which also affected their timescale.

0:45:570:45:59

It did slow us down. We had to wait two to three weeks for somebody to come out,

0:45:590:46:05

then another two weeks or so for them actually to come and do it,

0:46:050:46:09

-so that was a month that we'd lost anyway.

-That's right.

0:46:090:46:13

So their three to four months was extended to five and now they're almost finished,

0:46:130:46:19

but there's a valuable lesson to be learnt here.

0:46:190:46:22

When planning a renovation, do be sure to build into your schedule

0:46:220:46:26

not just how long it takes to get a job done,

0:46:260:46:29

but how long it will be for the right people to be available to do it,

0:46:290:46:33

even if you're putting every second you have into it.

0:46:330:46:37

-How many bank holidays are there in a year?

-Every bank holiday this year.

0:46:370:46:41

Every Saturday and Sunday since April.

0:46:410:46:45

-Near enough.

-Yeah.

0:46:450:46:47

There's no denying they've put the hours in, but has it been fun?

0:46:470:46:52

I enjoy it.

0:46:530:46:55

I enjoy it. Yes, I'd be quite happy to do another project.

0:46:560:47:00

-But I think we have to agree to disagree, don't we?

-Yes, we do. Sorry.

0:47:000:47:06

Perhaps the potential returns will change Sharon's mind.

0:47:060:47:10

She and Chris purchased this place for 60,000.

0:47:100:47:13

And with £7,500 on the work, their total outlay comes to 67,500.

0:47:130:47:20

We invited two local estate agents to the property

0:47:220:47:26

to see if they're impressed.

0:47:260:47:28

My first impressions are that the property's had a full refurbishment.

0:47:320:47:36

New kitchen. I like how they've stripped it right back and really refreshed it throughout.

0:47:360:47:41

The property's very nice.

0:47:410:47:43

Very airy, very spacious. Obviously, neutral colours as you'd expect.

0:47:430:47:48

It's a typical two up, two down terraced property.

0:47:480:47:51

The biggest thing with this one is it sets itself apart with a lovely back garden,

0:47:510:47:57

so that's going to be a very good selling point.

0:47:570:48:00

And if Chris and Sharon did want to sell, how much could they put it on the market for?

0:48:000:48:05

In the current market, I would look at achieving in the region of £75,000 to £80,000.

0:48:050:48:11

We'd achieve between £75,000 and £80,000 in this current market.

0:48:110:48:15

-I think that's about what we expected for this area.

-Yes.

0:48:150:48:18

It might be a touch more than I expected when we initially bought the property, but that's about right.

0:48:180:48:25

It's nice to hear they're pleased that their potential pre-tax and expenses profit

0:48:250:48:30

would be between £7,500 and £12,500.

0:48:300:48:33

However, they're still keen to go ahead with the original plan of letting it.

0:48:350:48:40

How much could they earn if they put it up for rent?

0:48:400:48:44

On the rental market,

0:48:440:48:46

I believe this property could achieve in the region of £400 to £425 per calendar month.

0:48:460:48:51

I'd expect to achieve between £400 and £450 per calendar month.

0:48:510:48:56

Yeah, I think the one at 450 is about the one that we'd prefer to chase if we possibly could.

0:48:560:49:02

-425 might be about right, kind of in line with what we're expecting.

-Yeah.

0:49:020:49:06

Either way, the rental yield is impressive, sitting at between 7 and 8%.

0:49:060:49:11

We know Chris is keen to do another, so now she knows the financial potential,

0:49:110:49:17

would Sharon be convinced?

0:49:170:49:19

Not for a long, long, long time.

0:49:210:49:24

Never say never!

0:49:240:49:26

In the small village of Dipton in County Durham, a two-bed terraced house went up for auction.

0:49:300:49:36

Although it was basically structurally sound, its downstairs layout was less than ideal.

0:49:360:49:42

There was no direct access to the front lounge and a rear reception room that was more like a corridor.

0:49:420:49:49

Then there was the kitchen housed in a pre-fabricated rear extension

0:49:490:49:54

which was flat-roofed and single-skinned.

0:49:540:49:57

Quite frankly, it either had to go or be replaced.

0:49:570:50:01

# Where did it go...? #

0:50:020:50:05

But with two decent bedrooms upstairs and a reasonable family bathroom,

0:50:050:50:10

this place had lots of potential for anyone willing and able to untangle the awkward layout.

0:50:100:50:16

It was snapped up at auction for £45,000 by local man Ray.

0:50:190:50:24

He works as a sportswear supplier, but had refurbished his own property

0:50:240:50:28

and had been chomping at the bit to get his first investment project under way.

0:50:280:50:33

I got this one because I missed out on another one, so everything was all set in place.

0:50:330:50:38

This one came up and I jumped at it straight away because I wanted to get started

0:50:380:50:43

and get something rented out as soon as possible.

0:50:430:50:46

# Baby, I'm ready to go... #

0:50:460:50:49

So Ray was ready to go.

0:50:500:50:52

Armed with an £8,000 to £10,000 budget, he hoped to prepare it for the rental market

0:50:520:50:58

in two to three months' time.

0:50:580:51:00

# Baby, I'm ready to go... #

0:51:000:51:04

Now, nearly five months later, we return to see if the house is ready to go.

0:51:050:51:10

It's certainly looking sharper with a crisp, new, white front door.

0:51:110:51:16

At the rear, have we seen the back of that rather inadequate extension?

0:51:160:51:20

# Yea-ea-eah

0:51:200:51:23

# So good to be gone, so good to be gone

0:51:230:51:27

# Yea-ea-eah

0:51:280:51:31

# So good to be gone, so good to be gone... #

0:51:310:51:35

Inside, not only has the lounge had a full renovation,

0:51:350:51:39

including central heating, new plasterwork and a damp course,

0:51:390:51:43

but the layout has been altered.

0:51:430:51:45

The rooms have been widened and the access to the old rear reception room changed...

0:51:450:51:50

..in order for it now to accommodate the kitchen.

0:51:520:51:55

We've done a lot of work in the kitchen to get to this stage. Much of it was heavy, horrible, dirty work.

0:51:550:52:01

We've blocked the wall up which was here. We've removed the chimney breast.

0:52:010:52:06

It's created an extra three foot on the kitchen, so we can get a lot more units in.

0:52:060:52:10

The original extension was damp, rain was coming in and it was unsightly,

0:52:100:52:15

so we demolished the whole lot and now we've got a nice, clean view out of the kitchen into the yard.

0:52:150:52:20

It is a work in progress. I hope to have it done in the next few weeks. Can't wait to finish it.

0:52:200:52:26

So when it's finished, this is going to be a much improved kitchen and utility area...

0:52:260:52:31

..while upstairs, the bathroom has also been brought bang up to date

0:52:360:52:41

with a brand-new suite, tiling and an electric shower installed.

0:52:410:52:46

Ray has also found a way of maximising the space in the two bedrooms.

0:52:460:52:50

The main difference in the front bedroom is we ripped out two cupboards, both in the corner,

0:52:510:52:57

and again they've created more space.

0:52:570:53:00

In the back bedroom, we've taken out the chimney flue which has allowed us to square the room off.

0:53:000:53:05

It gives you nice, square walls and once more, it's been painted, so it looks nice and clean.

0:53:050:53:11

Apart from the gas and electrics, Ray has done most of the work with some help from friends and family.

0:53:110:53:17

He's mainly worked in the evenings and at weekends,

0:53:170:53:20

so not surprisingly, his two to three-month timescale has slipped.

0:53:200:53:24

He still has to finish off the kitchen and utility area

0:53:240:53:28

and there's also the space at the back, so what's to be done there?

0:53:280:53:32

Finish off the concrete we've dug up and maybe do a bit of block paving or some timber decking

0:53:320:53:38

immediately out the door to create a nice sitting area.

0:53:380:53:42

I'll tidy up the outbuildings. They're useful storage.

0:53:420:53:45

For the likes of mountain bikes or outdoor equipment,

0:53:450:53:48

you've got somewhere to put it away from everything else.

0:53:480:53:52

Ray hopes to finish off the remaining jobs in the next few weeks.

0:53:520:53:57

How much has it cost to get this two-bedroom, mid-terraced house ready for the rental market?

0:53:570:54:03

We are slightly over budget. The original budget was in the region of £10,000.

0:54:070:54:12

We'll be looking at 13 to complete it.

0:54:120:54:15

We put a better bathroom suite in than first expected

0:54:150:54:19

and a damp-proof course which we didn't budget for at the very start.

0:54:190:54:23

A £13,000 spend on top of his £45,000 purchase price

0:54:260:54:30

takes Ray's total outlay to 58,000 without costs or fees.

0:54:300:54:35

So has it been money well spent? What do two local estate agents reckon?

0:54:350:54:40

My overall impression is very good. They've re-plastered the walls,

0:54:440:54:48

put in a lot of contemporary fixtures and fittings,

0:54:480:54:51

just what first-time buyers want.

0:54:510:54:53

The house is looking very good.

0:54:530:54:55

The owner has put a lot of time and effort into the refurbishment.

0:54:550:54:59

There's a bit of work left to do in the kitchen and the rear yard needs some finishing off as well,

0:54:590:55:05

but once done, it will be a very nice property.

0:55:050:55:08

Some of the highlights for me would be the inglenook fireplace in the lounge, the brand-new fitted kitchen

0:55:080:55:14

which will be superb and the bathroom as well. It's re-carpeted and redecorated throughout.

0:55:140:55:20

Ray hopes to let the two-bed house out, but after spending £58,000 on it,

0:55:210:55:27

does it add up to being a good investment?

0:55:270:55:29

Once the house is complete, I would consider placing it on the market in the region of £70,000 to £75,000.

0:55:290:55:35

Once the property is complete, I would market it at £70,000.

0:55:350:55:39

That's definitely the ballpark figure I was looking for.

0:55:390:55:43

That's a potential pre-tax profit of between 12,000 and 17,000.

0:55:440:55:48

How could it fare on the all-important rental market?

0:55:480:55:52

When the work is finished on the house,

0:55:520:55:55

I would place this on the rental market for somewhere in the region of £400 to £425 per month.

0:55:550:56:00

I would offer the property to market for rent at £425 per calendar month.

0:56:000:56:06

Definitely what I was expecting. Hopefully, I can achieve that.

0:56:060:56:10

A rental return of between £400 and £425 per calendar month

0:56:110:56:16

will see an annual rental yield of over 8%,

0:56:160:56:19

so that's plenty of incentive to get Ray to finish it off,

0:56:190:56:23

get a tenant in and start getting revenue for the house.

0:56:230:56:27

So how does he feel about this, his first property investment project?

0:56:270:56:32

It's been a lot of fun renovating the property, especially with the help of friends and family.

0:56:320:56:38

Everything went to plan. It's been an experience.

0:56:380:56:41

That's it for today. We'll have lots more stories from the auctions next time on Homes Under The Hammer.

0:56:430:56:48

-See you then.

-Goodbye.

-Goodbye.

0:56:480:56:50

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