Episode 8 Homes Under the Hammer

In today's more challenging market, do you think you could hack it in the world of property?

It can be an exciting way to earn money.

And it can be even more rewarding

if you buy your home under the hammer.

There are tense moments in the auction room,

who will make the right bid at the right time?

Oh, yes, properties can change people's fortune for ever,

for better or for worse.

Here's what inspired our buyers on today's show.

'First up, I'm feeling waves of nostalgia at this house in Cumbria.'

Do you remember these telephones? Oh, the noise, the dialling, ah.

'In Cardiff, it's waves of colour that are crashing over me.'

Wow, look at the pink paint in this flat.

'But I'm still stuck in the past at this property in Devon.'

The old serving hatch here, therefore,

through here, the kitchen.

'All these properties went to auction,

'we'll find out who bought them,

'and what they paid when they went under the hammer.'

It's yours, sir.

Today, I'm in Dalton-in-Furness,

the ancient and historical capital of the area.

It's got its own 14th century castle,

a tower house that was built by the Abbot Furness.

Dalton is less than 30 miles from the Lake District

and is a quiet but charming Cumbrian town.

Well, close to the town centre, in a really popular area,

is the property I'm here to see.

There, it's not a tower house, but a townhouse.

In this lovely, elevated position, three bedrooms,

at a guide price of £65,000 plus, sounds quite cheap.

Let's take a look.

'The property sits on a hill overlooking the town,

'which makes for a very pleasant view,

'so, will be inside of the house be as pleasing to the eye?'

Ah, ah, nice entrance hallway here, and straight away,

I'm seeing these lovely little features.

I hope the rest of the house is similar.

And, oh, look at that, do you remember these telephones?

Oh, the noise, and the dialling, oh, fantastic.

And I suppose if you buy the house, you get that as well.

Absolutely perfect.

But through into a rear living room area here, kitchen at the back,

where you might expect it to be,

and then a really nice bay fronted window there.

That's not good.

That, really isn't, oh, my word.

As you walk towards this corner of the property

at the front here, you actually feel yourself walking downhill.

There is something seriously nasty going on in this corner.

Lots of cracking around the ceiling there.

Wow, I need to investigate upstairs.

That damage could be the sign of subsidence,

which could be disastrous. And with those sloping floor boards,

I certainly don't think this would ever be a great billiard room.

So, are there any more surprises upstairs?

Let's see what else there is,

first, though, there's a bathroom and toilet there,

it's a good sized space. Rear bedroom, again, not bad.

But this is the room I'm really interested in, front bedroom,

and, oh, yes, oh, boy,

uh, it's upstairs as well, not surprisingly.

There's plaster coming off, lots of cracks,

I mean, it seems like this corner of the property has sunk,

for whatever reason, maybe drains,

maybe water ingress, maybe subsidence.

Whatever happens, you need a survey.

Oh, boy, you certainly do.

That survey will be very interesting,

as the big loft area at the top of the house

could do with a few checks too.

But it's a fantastic space. With a clever bit of renovation

it could give you a fourth bedroom in this house.

But unfortunately, at the back, the garden doesn't offer as much space.

Well, at the rear of the property,

if you're expecting an extensive garden,

you're going to be slightly disappointed.

There is, in fact, this very small, little courtyard area,

but really good news, there is also a garage.

Now, parking around here is not easy, so having this is a real bonus.

So, the lack of outside space is made up for by the garage,

which provides valuable off-street parking.

This property has a lot going for it,

whilst I'm concerned about the potential subsidence issues,

with a guide price of £65,000, I think, in the right hands,

there could be money to be made here.

But, does a local property expert agree?

We asked the auctioneer who sold it for his thoughts on the place.

The positives of this property is its proximity to the town centre,

within short walking distance.

It has a good number of rooms, good-sized rooms,

and great potential.

It does need a programme of modernisation,

so, there's a lot of work to do, not for the fainthearted,

but it's a good, substantial property.

Once refurbished, in pristine condition,

I would expect it to achieve in excess of £120,000.

That's a fantastic £55,000 over the guide price of 65,000,

but what could it achieve if the buyer decided to let it out?

Once fully renovated, this property would achieve,

on the rental market, a sum of £450 per calendar month.

Well, there are lots of really positive things about this property,

the location, I like the elevated position,

I like the layout inside, I like the garage.

But that serious subsidence, or whatever it is,

it would put a lot of people off, including, possibly, me.

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

Lot number six, ladies and gentlemen,

we're off down to Dalton-in-Furness, a lovely spot.

At £60,000, am I bid?

At £60,000, anywhere? 60, I've got, at £60,000 we're away.

61, anyone? 61, I've got.

And two, may I see? 62, 63?

63, I've got.

64? 65?

66?

Shake of the head, with you at 65.

Do I see 66 anywhere?

At £65,000, I'm done.

At 65, then,

first time,

at 65, second time.

Not got it, very close, not there. Come and see us afterwards, sir.

Client might go a bit more.

Unfortunately, the bidding didn't go past the reserve price,

so it failed to sell on auction day.

But it was bought afterwards by Julie,

who wasn't even at the auction. Julie is a health and safety manager,

who's been living in Australia for the last 20 years.

Julie has several investment properties down under,

and has returned to dip her toe in the UK market.

I caught up with her back at the property to find out more.

-Julie, lovely to meet you.

-And you too.

-Congratulations.

-Thank you.

-Tell me why you wanted to buy this place.

-Um, I basically didn't.

-I just found it on the internet.

-Right.

And I thought it was a pretty good buy,

so, I rang up the auction people,

and they said, if you meet the reserve then you can have it.

-That's right, because you weren't at the auction, obviously.

-No.

-Tell me what happened.

-I was actually looking at buying

-a sandwich shop, and then...

-Sandwich shop?

-Yeah!

But I decided that that was too much like hard work,

so, I thought, I know property so,

I found this on the net, just total fluke.

-You were aware that it had gone to auction?

-No.

-You weren't aware?

No, never heard of it before.

And did the auctioneers tell you that it had been in the auction

and hadn't sold?

On the website it said that it was an unsold property.

Did it concern you at all that it hadn't sold?

And there might be a reason for that?

A little bit, but there is a structural survey

that came with it in the legal pack,

so, I read that, and worked out that there wasn't too much to do,

there's a bit, but nothing too scary.

The legal pack wasn't available at the time of the auction,

so that may have put off potential bidders.

But, luckily, it was available for Julie. She scrutinised it,

and found the damage was from a leaking downpipe,

far less of a worry than subsidence.

So, what work has she got planned here?

There's a beam in the cellar that needs to be replaced,

it's basically just a piece of wood, so, we need to put an RSJ in there.

And then jack up the floors,

and then basically, the rest of it is just a reno.

Tell me what's involved in just jacking up the floors.

Basically, you have to pick them all up,

and you just jack them, so, basically putting a wedge in.

-Right.

-And making them level again, there's no subsidence,

it's just basically sagged.

I haven't decided whether we're going to do it ourselves, or get...

-What do you mean, do it yourselves?

-Yeah, we can do it.

We being who?

Myself and my family, because it's mostly labour,

there's not a great deal of skill involved, it's mostly labour,

so, I don't want to have to fork out lots of money for labour

when we could do it ourselves.

Lifting the floorboards isn't a job for the fainthearted,

but Julie sounds confident that she and her family can do the work.

No, she's not bringing them over from Australia,

she was actually born in this country

and still has family in the area.

So, as well as the floors, what else will they be tackling?

Some of the windows need replacing, a new kitchen, new bathroom,

new walls, new plaster, doors.

Everything. Central heating, there's no heating,

there's actually no gas to the property,

so I have to get the gas brought up as well.

Julie has a plumber and an electrician on standby

for the skilled work, and has set herself a budget of £20,000.

-What kind of timescale?

-12 weeks.

-12 weeks?!

-Yeah.

-With a team of how many people?

Um, well, we've got plumbers and electricians

and people coming in, and then there's probably about four of us.

Julie bought this property as an investment to add to her portfolio

of six buy-to-let properties in Australia.

She moved there 20 years ago, and has two sons over there.

What's the plan, have you moved away from Australia?

No, no, my boys are still there, I've still got property out there,

probably next July, I think I might go back.

The plan is to do six months in Australia, six months here.

Where's the passion for property come from?

I really don't know, no-one else in the family has it,

they all live in their houses and they're quite happy,

but I just love houses, I love renovating, and being involved.

Well, listen, congratulations, good luck with it.

Thank you very much.

-I look forward to seeing how you get on.

-Thank you.

Well, Julie seems remarkably chipper and unfazed by the challenges ahead.

But challenges there most certainly are,

just raising the floor is not that easy,

still, she's got her family to support her.

How will she and the team get on? You can find out later in the show.

I'm three miles from Cardiff city centre today

in the suburb of Fairwater.

The area has a good mix of affordable houses

and benefits from plenty of local amenities,

just a stone's throw from the Welsh capital.

I'm here to see a two bedroomed flat,

it's got its own allocated parking space, which is fab.

Now, unfortunately, the outside of the block,

well, it's looking a little bit shabby.

But the guide price for this place was just £45,000,

the last flat in this block sold for £60,000,

and so, if it's in tip top condition on the inside,

there could be some many to be made.

The flat's on the second floor,

although the exterior looks little worn out,

it's nothing some paint and carpentry can't fix.

It's worth finding out who is responsible for the maintenance,

and whether there are service charges to pay.

The communal entrance hall and stairwell

could also do with freshening up.

It's amazing how a lick of emulsion and some colour can make

a place feel more welcoming, and talking of colour...

Wow, look at the pink paint in this flat!

But, the first thing that hits you between the eyes,

it's filled to the brim with stuff that's been left here

from the previous owners, so, before you start anything,

get all of this lot out, so you can see what you've got here.

You will need to do a renovation job on this,

it's tired, it's dated, and over here, there's some damp in the corner

which I would get looked at straightaway.

Now, another piece of information, this flat is leasehold,

which is perfectly acceptable, nothing untoward there at all.

But the number of years left remaining is a problem.

Because this will cause issues when it comes to securing finance.

Now, unfortunately, there are only 78 years left,

and that can put some lenders off,

and, if the banks fail to supply the funds, you know what that means.

# Money money, money, money. #

Yes, it means finding the money, or you could come unstuck.

A cash buyer could be the only way here.

In a tricky economic climate,

you really have to convince the lenders this is a sound investment.

Any chink in the armour can go against you.

But first things first, what does this flat have to offer?

There are two adequate sized bedrooms,

a decent sized bathroom in need of some upgrading,

and a spacious living room with open plan kitchen.

See past all the clutter,

and you've got yourself a neat, little flat.

But I'm still concerned about the short lease,

and what it could mean for the purchaser.

And so, here is the scenario.

You've got the funds available to buy this for cash,

brilliant, tick, so, no mortgage required.

And you think to yourself,

I want to renovate this and sell it on for a quick profit.

Now, the short lease will make people nervous

and it will put people off.

So, you're forced to think about a lease renewal.

Now, the costs will have to be negotiated between yourself

and the freeholder, but here's the catch,

you can't do any of that

until you've owned the flat for at least two years.

If you didn't know all of this prior to auction,

well, you could really come unstuck.

This is definitely one for those taking the long-term view

and so renting this place out is the only way forward.

At that guide price of 45,000, what will a local property expert think?

We invited one along to find out.

My personal view on the apartment at the moment, it's sad,

and it needs freshening up, and a new lease of life.

That's not the only lease that's required,

how should the new owners proceed with the ticking clock

that is the leasehold here?

In my opinion, the new owners should, at this stage,

consider renting for two years,

qualifying under the Lease of Reform Act,

applying for an extension,

or, if the tenants also wish to purchase,

to combine, and buy the freehold.

Meanwhile, what can a property like this

hope to achieve on the rental market?

The apartment could be rented for £475 per calendar month.

Once renovated, what could it fetch if sold on?

In my opinion, this apartment, depending on its final finishes,

could be placed on the market at £85,000.

The exterior and the communal areas are very shabby,

and, there is so much stuff in this flat to clear out, look at it.

And I think that short lease is undoubtedly going to put people off.

But for those taking the long-term view,

I think this property will rent well,

and it could be a good one to go for.

Let's see who else thought so when it went under the hammer.

Second floor flat in a purpose-built block of six, ladies and gentlemen.

45, start me, bid me. 45.

45,000 is all I'm bid.

At 46 I'm bid, seven if you like now.

At 46, it's your bid, at seven, thank you.

At 47, 48, your bid at 48,000. Nine if you like now.

Nine, thank you. 49 there, 50 there.

51 in the back.

At 51, two bidders, 52,000 is here.

Three in the back, four, at 54, five, thank you.

At 55, right behind, at 56,000 in the back, it's 57.

Eight is coming now. 57,500, 58, was that a bid?

50, half, 58 and a half, 59 in the back.

At 59,000, thank you, at 59 and a half, thank you.

60 taken in the back of the room. 60 and a half,

61, if you like, sir, right in the back, 61, thank you.

At 61, at 61, half if you like.

Yes or no?

At 61,000 in the back of the room, and we all done then at 61,000?

It's yours, sir, standing in the striped shirt, number 48.

With his successful bid of 61,000, the new owner is Darren.

He owns and runs his own tiling and decorating business,

'so, is perfectly placed to take this one on.

In fact, he was responsible for painting the exterior of this very block

some 21 years ago, when it was first built.

-Darren, congratulations. Lovely to meet you.

-Thank you.

Tell me that this flat, why did you want to buy it?

I had already bought in this area, so, I know the area,

I've got a family who live here.

It's a decent area.

Been going to auctions, believe it or not, for 10 years, now.

Um, first time I've actually acquired one.

So, hold on, you've been going for 10 years,

but this is the first time in 10 years you've ever bought?

From an auction, yes.

Really? Why is that?

I have a budget and I stick to it,

and sometimes you go into these auctions,

and I think, with me,

it's the one I've always wanted, everyone else has wanted.

And once it's gone past the threshold that I'm happy with,

then I just walk away.

Being able to walk away from buying at an auction is an excellent mindset to have.

If you can emotionally detach yourself from a property,

as Darren seems to be able to do, then you don't run the risk of overspending.

So, are you investing on your own?

No, I'm investing with my business partner and our two wives.

Generally I'm normally the one that does all the research.

My business partner is very much hands-on, he likes to come in here.

Once he sees this, he'll be so happy.

He just loves getting his hands dirty.

What are you going to do to really turn this place around?

Mainly brighten it up, generally neutralise it,

and allow the prospective tenants to maybe add their own little finishing touches.

-New kitchen, new bathroom?

-Yes.

And how long do you think it will take?

Would have been about two weeks but we are in the process

of doing another property at the moment so it might stretch it to the four.

Two to four weeks? I'm impressed.

And something tells me he'll have his finances sorted, too.

Let's talk about the budget and how much you plan on spending here.

We're looking to spend between 3,000 and 4,000.

I've got all the necessary contractors in place

ready to get the kitchen fitted, the bathroom done,

and obviously, after the decoration is done, getting the carpets down.

You strike me as a man with a plan

and I bet you're not going to go 1p over that, are you?

-I won't go over 4,000, definitely not, no.

-That's amazing.

How are you so meticulous with it?

Erm...

It's years of running my own business.

You have to keep your finger on the pulse

and make sure you don't go past that budget.

Otherwise it's pointless doing the work in the first place.

That's great. He's definitely got his business hat on,

which is exactly what needs to be done if it's to be a success.

So, with that in mind,

how does he plan to deal with that pesky lease issue?

We're keeping this place for a while.

It will be five to ten years so, ideally, yes, extend the lease

so further on down the line when I do want to come to sell it, it opens the market to more people.

Have you enquired as to how much money a lease will cost?

At the moment I would say a few thousand pounds.

If I leave it to when it gets under 70 years,

it could go up to 10,000, maybe a little bit longer.

It's definitely worth thinking about investing now, I think.

-Oh, definitely, yes.

-So what about the service charge on this property?

That, I haven't got clarification on what it is.

Solicitors at the moment - we've only just completed a couple of days ago -

is obviously talking to the freeholder to try and sort that out.

Ground rent is about £50 per year.

The service charge, if you look at the outside of the place, you know,

work has stopped being done on it for some reason or another,

and we're trying to resolve that.

You are in the perfect position to get involved here.

Obviously you painted this 21 years ago.

How do you feel about painting it all again?

I've got no issues doing that.

At the end of the day it's helping me.

The brighter it looks...it's all well and good having a lovely flat once it's complete,

but if you've got a bit of a shabby communals,

as people walk through externals, it might put the odd person off.

Darren and his partner certainly seem to have the right skills

to be successful in this game,

and with seven other buy-to-lets in the portfolio, it's just as well!

So you must be pretty busy.

The phone must ring on the occasional time?

The washing machine has broken, there is a leak?

Well we only started buying just under two years ago

so most things are pretty new anyway.

Very little issues, I have to say.

We've been fortunate because when we do meet, we do them up quite well.

I can't wait to see it when it's finished. Thank you, it's lovely to meet you today. Thanks.

Diligent Darren is as thrifty as they come but I like his style.

You know, it's the only way to make a success of property

and he knows that.

I've got no doubts he will refurbish this for £4,000,

but will that service charge come as a nasty surprise?

And there's no point having a wonderful interior

if the exterior lets it down and you can't get tenants through the front door.

You can find out what happens later on in the programme.

Coming up, I see room for improvement in Devon.

It's not bad, I really like the open plan feel to it,

but it would be even better if there was a set of patio doors leading out there.

Back in Cardiff, it sounds like it's all been plain sailing.

Yeah, I suppose if every one was like this it would be an easy job

but I suppose everyone would be doing it then!

But first, problems under those floorboards in Cumbria.

The walls are solid stone, basically,

and that in itself causes a few more issues.

Now back to Cumbria,

where this three-bedroom property in Dalton-in-Furness sold for £72,000.

The new owner, Julie, spotted the house online after it failed to sell at the auction.

She'd been living in Australia for the past 20 years

and has developed several properties down under.

She was confident she had what it took to give this place the lift it needed - literally.

Tell me what's involved in just jacking up the floors.

Basically you have to pick them all up and then you just jack them

so you're basically putting a wedge in.

-Right.

-And making the floors level again.

There's no subsidence, it's just basically sagged.

I haven't decided whether we're going to do it ourselves...

-What do you mean do it yourselves?

-Yeah, we can do it.

-"We" being who?

Myself and my family.

Five months on and how have Julie and her family done?

Well, I'm pleased to say it's not just the outside that's had a new paint job.

The downstairs living space is completely transformed

into a bright and modern living space.

Upstairs, Julie has re-plastered, re-carpeted,

and redecorated throughout the house, but it's not all just been cosmetic.

The bathroom has been cleverly rejigged to accommodate a modern suite, including a brand-new shower.

But the most dramatic change is in the kitchen.

The kitchen and bathroom are my favourite rooms.

They really do look modern now. They have really transformed the place.

The bathroom, we actually took a window out of the bathroom

to make room for a shower so we've got a nice four-piece suite in there now

and a Velux window in the roof,

which brings in heaps of light but it actually looks really good up there.

And then the kitchen, I like my kitchens.

So hopefully it'll be practical and good.

And Julie has been busy up at the top of the house, too.

Remember that old attic? Now it's a safer, cleaner space.

Perfect for storage or even a little office, perhaps.

We just had to put a banister around where the stairs are

because that was just a hole so we've done that just to make that safe.

We've carpeted, we've done some plastering up there,

and central heating because it was freezing.

Julie and her family of helpers did a lot of the renovation themselves,

but had to get tradesmen in for the trickier plumbing and electrics.

And it turned out she didn't want to tackle those wobbly floors either,

leaving that for the pros.

Phew! I bet that saved her a lot of bother.

It was quite difficult. The walls are solid stone, basically,

and that in itself causes a few more issues.

It's not quite as simple as a brick structure

so we really did need to get some professional people in to do that,

and they did. And it caused them a few headaches, too!

It's generally best to get professionals in when it comes to tough jobs.

I think Julie was right not to deal with jacking up the house herself,

but as well as the work inside she also tackled the garage outside.

Even though it was advertised as a garage,

you couldn't actually get a car in there

because you couldn't get the doors open so we've raised the roof.

We've actually put a new fibreglass roof on there

so now you've got a really good-sized garage and good access.

The finishing touches still need to be done,

but, once completed, the garage should add real value.

Off-street parking is a huge bonus for potential purchasers or tenants.

But how has Julie's budget fared on this project?

The original budget was 20,000, and now at about 23,000,

maybe 23,500. I'm quite happy with that,

basically because we didn't intend to paint the elevations

and we didn't intend to remodel the garage, and that's where most of the money has gone

so really it wasn't too bad an estimate.

But has the work she's done added value to the house?

We asked two local property experts for their thoughts.

But, in typical British fashion, by the time they arrived just a few hours later,

the weather had taken a turn for the worse.

I think the buyer has made a tremendous job of it.

It needed a full programme of modernisation.

She's done it well and she's done the essential works very well.

She's levelled all the floors, re-rendered the outside.

It looks really well.

I like the property. I think it's got nice decoration.

I like the bathroom. I think the bathroom has been done nicely

and made good use of the space in there as well.

I like the way she's minimalised most of the rooms.

Nice kitchen, nice bathroom.

Cosmetics are really good, carpeted throughout.

A really good job, I think.

There's a very high demand for this type of property

in the area at the moment for the rental and on a re-sale.

Julie paid £72,000 for the house

and has spent a further 23,500 on the renovation,

making her total outlay around 95,500.

So, what do the experts think this place would be worth if sold on?

I think if this property was exposed to the sales market,

it would probably achieve a figure probably between £120,000-125,000.

The property, I would put for sale at £125,000.

That's basically what I thought it would be, yeah,

so I'm quite pleased with that.

With those figures, Julie could generate a pre-tax profit

of between £24,500 and £29,500 before the usual fees and expenses.

What if it was rented out?

I think if this property was exposed to the rental market,

I think you would expect to achieve about £550 per calendar month.

The property could achieve in the current market £550 per calendar month.

I don't really know what the rental values are,

but that would be fine as well if you were renting, I would imagine.

Are those rental figures enough to convince Julie to rent the property out instead?

I'm still going to sell the property.

I'm going to put it on the market basically tomorrow

and, because it's coming up to Christmas, will probably take

a bit of time and then see what happens from there.

What are Julie's future plans?

I'm actually going to go back to Australia in July.

We're going to stay out there for probably about six months

and then we're going to come back and try and find another house.

Have to ask the family first, though.

I don't know if they're quite as keen.

# I can think of nothing better

# Than dancing on the beach

# See a girl, you can go and get her

# Your troubles will be out of reach

# On the beach... #

I'm on the north Devon coast,

perhaps the less well-known part of the county,

due to the popularity of the south coast.

Barnstaple is the main town of this district,

and claims to be the oldest borough in the United Kingdom.

Well, most people buying a property in the southwest

would probably like something by the beach

or maybe overlooking the sea,

but the price of those could be a bit of a limiting factor.

Come inland, though, and I think you get a lot more value for your money.

For instance, this -

it's a three-bed mid terrace at a guide price of £95,000,

and yet you're only 10 minutes away from some beautiful beaches.

So, let's take a look.

That's a pretty generous guide price

for what is a three bedroom house in a lovely little area.

From the outside, the property appears to be in good order.

So, a promising start.

Nice, bright entrance hall,

partly due to this double glazed unit at the end here

with the door in the middle of it.

Lots of light coming in here, so we really like that.

Stairs up to your bedrooms there and then through into your living room.

Again, same thing -

lots of light pouring in from that rather odd thing at the end there,

like a double glazed unit which has had the bottom bit blocked off.

Obviously at some point in the past, thought,

somebody's knocked these two rooms into one,

so you've got your living room there and the dining room here.

It's not bad. I really like the open-plan feel to it,

but it would be even better if there was a set of patio doors

leading out there onto the garden.

Or, another thought occurs to me -

an old serving hatch here, therefore,

through here, the kitchen.

Not a bad size at all, but how about taking out this whole wall,

maybe putting a breakfast bar area in

to create a really nice sort of kitchen-living area,

possibly block off that wall there.

But internal layout, you can play with,

and it's a nice canvas to work with.

It does look like a blank canvas to me,

ready to paint your own picture of how you'd like to live.

Certainly, French doors out of the dining room

would make the world of difference on a summer's day.

Upstairs, the smallest bedroom probably only has room

to squeeze in a single bed, but the other two,

and particularly the one at the front, are good sizes.

And the bathroom is actually in pretty good nick.

So, there's a bit of work needed to update this house,

but whoever does it will need to watch

they don't spend more than the house could sell for.

I happen to know that there's three other properties on this estate

for sale at the moment, ranging from 140 to £152,000.

That is what you should set your sights on

as being the value of this property. Any buyer - bear that in mind.

Even if super-duper and snazzy, with gold taps and bespoke fittings,

you're unlikely to get more than £152,000 for this place.

The sky's definitely not the limit,

and you are somewhat constrained by the neighbouring properties.

Still, I think there is money to be made here,

if you don't get carried away.

We asked along a local property expert to hear his opinion

on this North Devon terrace, which had a guide price of £95,000.

First impressions are, it's not too bad.

It's a light refreshment project, I would say.

You're going to consider putting a new bathroom, new kitchen,

and just general decoration.

Personally, I think you're going to spend approximately £10,000,

cos the property has the main mod cons inserted,

which is obviously double glazing and gas central heating.

How much could the property be worth?

I think as we see it today, the property could be worth

somewhere in the region of £100-110,000.

Once refurbished, that could push that figure up closer to £140,000.

How much could it rent out for?

These sort of three bedroom properties in the area rent extremely well,

and somewhere in the region of £650 per calendar month

wouldn't be unreasonable.

Well, this really isn't a property for a developer

looking to throw caution to the wind and take a real chance.

This is more for somebody looking for a bit more of a safe bet

and happy to accept decent rather than rich returns.

Let's find out who that was when it went under the hammer.

Good renter, good first home.

Who's going to say 100 to us? Nice and simple.

100. 100 we've got.

At 100. 101. 101.

This was a well-attended auction,

with a lot of interest in this property.

We rejoin the bidding as it reaches £125,000 -

£30,000 over the guide price.

125. Good pitch.

125. Half, he says. 125 and a half.

126. 126.

126 and a half. 126 and a half.

126 and a half. 127.

127.

At 1...yeah.

127 and a half. 127 and a half.

128. 128. Tape goes around.

128 and a half. 128 and a half.

At 128...9.

At 129. Once is sat.

Twice is sat. At 129, last chance for a half.

Here we go. At 129, and out.

Sir, yours.

Congratulations, well done. 129.

And your buyer's number, sir, is, please?

With that successful bid of £129,000,

£34,000 over the guide price, was Ken.

He's a retired painter and decorator

who's also been developing property in the area for almost 30 years.

I met up with him back at the house.

-Ken, great to meet you. Congratulations.

-Thank you very much.

Tell me why you wanted to buy this place.

Well, really, because it is a good letting area

and that is what we do. We do let properties,

and having known the area for some time

because the first property we bought was just up the road,

so it's worked out quite well,

and if you know a lot more than other people,

-then it comes in handy sometimes, doesn't it?

-Right.

So when did you start with your first property?

-1983.

-Wow!

-Yeah.

-Gosh.

1983, so, many years ago.

-Getting on for 30 years, almost.

-Yeah, nearly 30 years.

Continuous letting, that is, as well.

With all that experience behind him, is there anything we can learn

about property developing? Maybe Ken can tell us.

Well, you've got to be very careful,

for a start, especially with property,

because you're not talking about

a few hundred pounds these days, are you?

So, do your homework, as we did with this one

and every property we look at,

and if you know the area, great advantage.

But, like I say, there is pitfalls,

and you've got to look out for all the things behind

that is not displayed to you. That is the big secret.

Ken should smile about this property,

as there don't seem to be any secrets lurking here.

It's a simple job for a man who's been doing this for nearly 30 years.

So what's he planning for this place?

Right. What we're going to do is total redec and refit.

Looks like the kitchen and the bathroom, carpets...

total, really. Well, I say, it has got central heating,

gas central heating,

and PVC windows, so that's a bonus.

Which...but as you can...

when you look around the detail, you can see the coving

and the skirting aren't quite up to scratch,

not for what we would like.

So what's the budget for the work?

I reckon between two and three thousand.

-Two and three?

-Mmm.

-You're doing the kitchen and the bathroom as well?

-Yeah.

How are you going to do that for two to three thousand?

-I'll let you know later.

-What do you mean, later?

No, you can do it.

It's not a problem. I've done kitchens and bathrooms before,

refitted them. Not a problem.

So the whole redecoration and the kitchen

and the bathroom and new carpets...

-Yeah.

-..for two to three thousand?

-Yeah.

-I want to know your secrets, mate!

-Well, like I say...

I mean, the thing is, it's all experience, isn't it?

If you've done it a number of times,

you know what to get and where to get and what to pay.

And what about...have you got your own team of people?

-So you're not paying the bills?

-No, I do it...most of it myself.

My wife has input as well, as they do,

so it all adds to...

at the end of the day, it all adds to a nice job done.

Job done indeed.

Ken hasn't lost any of his enthusiasm,

and is majorly involved in all parts of the work.

That may be the reason he can keep his budgets so low.

But 30 years on, some people may have thought, you know,

"Let's take a bit more of a back seat.

"Let's just be the landlord, let's do that stuff,"

not actually getting your hands dirty out there.

Well, yeah, you're right. People do say that,

but that's the people who doesn't like so much what they're doing.

I love what I'm doing, so it's not as much a job to me,

because I do it all the time because I like it.

So what's the problem?

You keep doing what you like, don't you, these days?

Well, listen, congratulations. Good luck with it.

-Thank you very much.

-We look forward to seeing how you get on.

Yeah, will do. Thank you.

Hmmm.

Well, stick to what you know and what you like.

There's certainly a lot of sense in that.

And this is a really solid little property

for Ken to add to his portfolio.

But two to three thousand quid to do the bathroom,

the kitchen and a full decoration and carpets?

Phew! I can't wait to see if he manages that.

You can find out later in the show.

Well, if you want to profit from property, timing is crucial,

but you have to be flexible with your plans.

That's right. Don't let time pass you by.

Let's see how today's buyers got on.

Now we're back in Cardiff, with this second floor,

two bedroom flat which sold at auction for 61,000.

I met up with Darren, who,

along with his business partner and their wives,

has built up a rental portfolio,

including seven other properties, over the last few years.

So you must be pretty busy.

The phone must ring on the occasional time,

the washing machine's broken, there's a leak?

Well, we only started buying just under two years ago,

so most things are pretty new, anyway.

Very little issues, I have to say.

We've been fortunate, because we when we do them,

we do them up quite well.

So, did they manage to get this flat up to standard?

We're back six weeks later to see the result.

Darren's done a great job here.

He has part-furnished the flat,

with the tenant opting to bring their own single beds,

which leaves a bit more space in the rooms.

In this room, we took out the existing kitchen,

replaced it with this new one.

We reconfigured it slightly.

We've obviously painted it up, new tiles on the wall,

also took up the existing vinyl floor

and put new tiles down there.

We were fortunate with regards the tiles.

They'd been in my garage for a couple of years

from a job we did some time ago,

so if we can find stuff to help us out

to save on costs, that's what we do.

Obviously, it's brightened it up and I'm pleased with it.

Throughout, the property has been completely modernised,

with upgraded electrics,

new flooring and a neutral colour scheme.

All that clutter is long gone,

and now it's a comfortable and fresh living space.

Well, in this room, the only problem we had was damp

that was coming through this corner here.

We found out that it was historical,

and all we had to really do was to seal it up,

retape it and paint it.

The rest of the room, obviously, is painted throughout

in this neutral colour.

New carpets put down, new curtains, and the tenant's moved in

and he's happy and we're happy.

Well, that is great - a tenant already found.

But has it been as simple a renovation as Darren hoped?

Pretty much straightforward.

You know, in lots of places we've had to do full refurbs.

This one, really, to all intents and purposes, was a bit of a clean up,

you know, with the exception of the kitchen and bathroom.

I suppose if every one was like this it would be an easy job.

But I suppose everyone would be doing it then!

Too true. They're certainly not all as plain sailing

as this one seems to have been.

However, there is one issue

that Darren seems to have been unable to remedy -

that's the exterior and communal parts of the building,

which are a bit tired and shabby. When we were last here,

Darren was trying to track down the freeholder to sort out the service charge

in order to give these areas some much-needed TLC.

So, is that in the pipeline any time soon?

We received a letter from the freeholder, eventually.

So things will start moving from there on in.

I've spoken to a number of people in this block

who are very keen to get the place updated and looking at its best.

So there's light at the end of the tunnel with regards that one

cos we've finally got hold of the freeholder. Hopefully we'll get things moving.

Fingers crossed that that gets sorted soon

because it certainly doesn't seem to be in Darren's nature to dilly-dally.

He managed to renovate the property within his two to four week estimate.

But how did he do on his budget?

Darren had set aside £3,000-£4,000 and not a penny more,

so did he stick to his guns?

I worked it all out the other day. It was £47 above the 3,000 mark,

so at the bottom end.

That certainly seems like a job well done.

Darren and his partner spent 61,000 on this property at auction,

a further £1,000 on fees,

and an additional £3,047 on the refurbishment,

making a grand total of just over £65,000.

So, was this money well spent?

We asked two local property experts for their opinions.

What I particularly like about the apartment is the lightness.

We're on the second floor, which technically is the penthouse,

so in real terms, we've got a lot of light coming through.

The colours schemes used are all magnolias, light colours, pastels,

coupled with the contemporary kitchen and bathroom fitments which have been put in,

so it's very stylish and it's going to appeal to the young element.

Really nice, yeah. It's very well-presented, neutrally-decorated.

A lovely kitchen, a really nice bathroom, so a very nice property.

So, it all sounds very positive.

How much could it fetch on the rental market?

In my opinion, the rental figure that could be achieved

is £475 per calendar month.

I would put the property on the market

for around £450 per calendar month.

We have got more than that with the tenant we have in.

We're actually getting 500 a month, which I think it's worth.

500 a month will mean a healthy yield

of just over 9%. But if Darren and his partners choose to sell on,

even with its relatively short lease, how much could they achieve?

Remember, they spent just over 65,000 here.

If this property was for sale,

we would value it between £85,000-£95,000.

The value of this apartment in its present condition in today's market

is between £85,000-£95,000.

No major surprises there,

but I'm basically in this just to rent out,

for at least five years, and see how things go when the house market recovers.

With this project going so smoothly,

does he have any advice for would-be property developers?

Well, if I'm doing it, I don't think it's that difficult.

I think it's a little bit of knowledge,

knowing the right people.

Hopefully you're prepared to get your hands dirty a bit yourself

to keep down on costs.

So, I would encourage anyone who feels like it's something for them

to give it a try. If you don't try things, you never know.

Time to go back to Devon,

where this three-bedroom house in Barnstaple

sold at auction for £129,000.

Ken was the buyer. He's retired now,

but manages a substantial portfolio of properties.

His experience as a landlord gave him confidence

when it came to his budget for the renovation.

I reckon between 2,000-3,000.

-Two and three?

-Mm.

-Are you doing the kitchen and the bathroom as well?

-Yeah.

How are you going to do that for £2,000-£3,000?!

-I'll let you know later.

-What do you mean "later"?!

Five months later, to be precise,

we caught up with Ken to see how much bang he got for his buck.

And he's done a great job.

It's modern, simple and effective.

As you can see, we've got a new hob, a new cooker...

Really, everything in this kitchen has been renewed.

So, really, this kitchen is accessible,

through all areas, for whatever you want within the kitchen.

So everything seems to be up and hopefully working fine!

It has been tested, so everything's fine.

Throughout the house, everything has been freshened up, repainted,

re-floored, and made to look spic and span.

The bathroom has been modernised as well.

He's done a really neat renovation here, but as I suspected,

he hasn't been able to stick to that ambitiously low budget of 2,000-3,000.

I think we've gone to about 4,500 now.

It was only finished a few days ago,

so there are a few more invoices to come in.

But I mean, with that money spent on this property,

for what it was bought for, I think it's quite a good deal, yeah.

So, with the last few things to pay for,

that's going to be almost twice the estimated budget of 2,000-3,000.

But in the grand scheme of things, it's not a huge amount

for a total renovation of a property.

However, it hasn't all been plain sailing.

The walls took most of the time

to do on this property because they were in such a state, you know.

As soon as you put a coat of paint on the walls

you could see the condition of the walls,

so we had to keep skimming it up and recoating the walls.

I say "we", I mean "me"!

It wasn't only the walls that were in poor condition.

Remember that garden? Well, now Ken's cleaned that up nicely, too.

And on top of all this work, some of the extra money

he had to spend went on fully rewiring the house.

We did have to upgrade the electrics to today's standards,

which, where I'm standing now,

the floors had to be dug up to lay larger earth cables.

So it's up to today's standards and certificated.

He originally planned to do the work in six to eight weeks,

but it's taken nearer five months

because of all that extra work he's done,

and he did most of that himself.

So, what are his plans for the property now?

Originally, we were going to let the property,

but now, it's come up so well

that I think, possibly, maybe a resale,

but we've not 100% made a decision yet,

so we will be thinking about that within the next week or two,

making a decision whether it's going to be rental or for sale.

Ken's already had his own valuation done,

but will two other local experts

be able to give him an idea of the house's current market value?

First of all, let's hear their thoughts on the work.

First impressions? I have to say that the gentleman

has done an excellent job. The finish is to a very good standard.

It looks really well-presented.

He's obviously done quite a lot of work throughout

and it looks like he's done a really good job.

The bathroom has been finished to an excellent standard -

it's what people are looking for -

a standard three-piece white suite, a shower over the bath,

tiling... An excellent standard.

The kitchen's been done really well.

It's clean and tidy, nice and modern.

Appliances are in there, which is always a bonus.

What about those valuations, then?

Firstly, the rental figures.

For rental, the market is very strong at the moment,

so for a house like this, we'd probably be looking to get around £600 per calendar month.

If we were going to place the property on the market for rental,

I would suggest a figure of 595 per calendar month.

Too low.

Yeah. I've already had rental values above that,

before I even bought the property, so I think they're a bit low.

Maybe the resale valuations will be more in line with what he had in mind.

Remember, Ken bought the property for 129,000

and has done around £4,500 worth of work.

So to make a profit, these valuations need to be more

than his total spend of £133,500.

If we were going to place the property on the market for sale,

I would do so at a figure of £150,000.

If the house went up for sale at the moment,

I would think it would probably be in the region of 150,000,

possibly looking to come down slightly on that.

Both the values that you've just spoken about

are below the valuations that we've previously had.

So I wouldn't be happy with those valuations, no.

In fact, Ken has since put the house on the market

and very quickly received an offer of £162,500.

But he decided not to accept that as he thinks he can achieve more

if he holds out a bit longer.

So he could be looking at a pre-tax profit of over £30,000,

which is a very healthy return.

Meanwhile, it sounds like he's having too much fun

to put his feet up and enjoy his retirement.

Never. I wouldn't do it if I didn't love it.

A lot of people do jobs that they don't like, but that's not me.

I always do, you know...

If I didn't like it, I wouldn't be here doing what I've done.

There'll be more compelling stories for you next time.

-So make sure you join us then for more Homes Under The Hammer.

-Goodbye.

-Goodbye.

Subtitles by Red Bee Media Ltd