0:00:02 > 0:00:05Now, home is where the heart is, they say, but is your heart
0:00:05 > 0:00:06in making money on property?
0:00:06 > 0:00:09Well, let's find out who put their heart and soul
0:00:09 > 0:00:11into buying their home under the hammer.
0:00:36 > 0:00:40Now, buying property at auction can be a road to success,
0:00:40 > 0:00:44but there are risks involved, so it's important to tread carefully.
0:00:44 > 0:00:48Even experienced developers can make wrong moves, so let's see
0:00:48 > 0:00:52what got people interested at the auctions on today's show.
0:00:53 > 0:00:57In Manchester, this forlorn two-bed terrace was unloved,
0:00:57 > 0:00:59except by a pigeon or two.
0:00:59 > 0:01:02Will a buyer save it or take flight?
0:01:03 > 0:01:05In Maidstone, Kent,
0:01:05 > 0:01:08there's a one-bed flat in this block with a short lease
0:01:08 > 0:01:12and it turns out time is of the essence for quite another reason!
0:01:14 > 0:01:16'These properties went to auction.
0:01:16 > 0:01:17'We'll find out who bought them
0:01:17 > 0:01:20'and what they paid when they went under the hammer.'
0:01:20 > 0:01:22It's yours now, sir.
0:01:26 > 0:01:29This is Manchester city centre.
0:01:29 > 0:01:31A great place for shopping and nightlife.
0:01:31 > 0:01:35No surprise, it attracts visitors from many miles away,
0:01:35 > 0:01:37as well as the local suburbs.
0:01:37 > 0:01:41While Moston was once an upmarket haven for
0:01:41 > 0:01:46Manchester's wealthy merchants and pretty much retained a village feel
0:01:46 > 0:01:51while the city expanded around it, eventually, it did lose some
0:01:51 > 0:01:57of its green spaces, but elegant Victorian streets still remain.
0:02:01 > 0:02:04Well, this really is a lovely street.
0:02:04 > 0:02:06It's tree-lined, people look like they're
0:02:06 > 0:02:10looking after their houses...so, why is that significant?
0:02:10 > 0:02:13Well, it's an old adage in the property industry that
0:02:13 > 0:02:15the best thing you can possibly do
0:02:15 > 0:02:19is buy the worst house on the best street.
0:02:19 > 0:02:21HE SHARPLY INTAKES BREATH
0:02:21 > 0:02:23Well, I think we've found it!
0:02:23 > 0:02:26£30,000 to £40,000 was the guide price.
0:02:26 > 0:02:29It's a two-bedroom mid-terrace. Let's take a look inside.
0:02:29 > 0:02:33'The boarded windows don't make the most auspicious start.'
0:02:33 > 0:02:36- OK! - HE LAUGHS NERVOUSLY
0:02:36 > 0:02:38What are we going to find?!
0:02:38 > 0:02:42Well, it's...just judging by the height of the ceilings,
0:02:42 > 0:02:45going to be a relatively impressive property.
0:02:45 > 0:02:48I know it's not what first impressions might say.
0:02:48 > 0:02:52Um...and you really have to use your imagination here a bit,
0:02:52 > 0:02:56but just bear with me. A big front sitting room there.
0:02:56 > 0:02:58I mean, it's quite dark at the moment cos of all
0:02:58 > 0:03:02the boarded up windows, but it's not a bad sized space.
0:03:02 > 0:03:04A bit of an under-stair storage area and then through
0:03:04 > 0:03:11into your rear...sort of living area / whatever you want to call it.
0:03:11 > 0:03:14As you can see, somebody's obviously started, uh,
0:03:14 > 0:03:16some of the renovation works. That's good.
0:03:16 > 0:03:19Yeah, I know at first glance you think, "Ooh, oh!"
0:03:19 > 0:03:22But you probably would have had to do that anyway, so they've actually
0:03:22 > 0:03:25done quite a lot of the work for you and got rid of all that rubbish.
0:03:25 > 0:03:28Skips and skips and skips' worth of it, I'm sure.
0:03:28 > 0:03:30But it's a reasonable sized space.
0:03:30 > 0:03:33Big, big chimney breast there which certainly
0:03:33 > 0:03:37imposes into the room rather a lot. So, that's OK.
0:03:37 > 0:03:40Um, right to the rear of the property then,
0:03:40 > 0:03:42a small, little additional...
0:03:42 > 0:03:44my guess is, some kind of extension
0:03:44 > 0:03:46and it looks to me like this was where the kitchen was.
0:03:46 > 0:03:49I say was, because the kitchen has gone,
0:03:49 > 0:03:51obviously ended up in the skip as well.
0:03:51 > 0:03:54No kitchen can mean no loan.
0:03:54 > 0:03:58My advice would be to try and get a part deferred one where
0:03:58 > 0:04:02a portion of the mortgage is held back until you fit one.
0:04:02 > 0:04:04Another issue is that sometimes properties are...
0:04:04 > 0:04:08Can you believe it? ..too cheap to get a loan.
0:04:08 > 0:04:10It can be difficult to get a small amount.
0:04:10 > 0:04:14You usually can't borrow less than £25,000,
0:04:14 > 0:04:17so a cash buyer might fancy this one.
0:04:17 > 0:04:19While inside has been stripped bare,
0:04:19 > 0:04:23I wish I could say the same about the garden.
0:04:23 > 0:04:25There is access from the back which is a bonus
0:04:25 > 0:04:30and that seems to be quite nicely kept, but the brickwork
0:04:30 > 0:04:33on the extension looks like it needs some desperate attention.
0:04:35 > 0:04:37Well, upstairs, I know it's quite simple,
0:04:37 > 0:04:40but the layout to me really works very well.
0:04:40 > 0:04:43You've got a big double bedroom at the front there,
0:04:43 > 0:04:47this little landing area here, a smaller bedroom there
0:04:47 > 0:04:51and then your bathroom where it should be upstairs here.
0:04:51 > 0:04:52Now, I say bathroom, it's a
0:04:52 > 0:04:55space which a bathroom will be in at some point,
0:04:55 > 0:04:58but, again, like the kitchen, it doesn't exist, so, again,
0:04:58 > 0:04:59when it comes to mortgages,
0:04:59 > 0:05:02the fact there isn't a bathroom or a loo, not ideal.
0:05:02 > 0:05:05Now, the other thing I do know is up here, is rather a lot of bird poo.
0:05:05 > 0:05:07There must be birds in the loft, logically,
0:05:07 > 0:05:08how did they get in there?
0:05:08 > 0:05:13Probably through a hole in the roof and that is also serious.
0:05:13 > 0:05:17From the front of the property, those pigeons are easy to spot.
0:05:17 > 0:05:21# Come on, little pigeon, fly away with me... #
0:05:21 > 0:05:24That roof has had it. No two ways about it.
0:05:24 > 0:05:27But the brickwork and pointing look OK.
0:05:29 > 0:05:32With the guide price of £30,000 to £40,000, it seems fairly cheap on
0:05:32 > 0:05:37the face of it, what does a local estate agent make of it?
0:05:37 > 0:05:39Brought back to a reasonable condition,
0:05:39 > 0:05:43this property would probably sell at around about the £55,000 mark.
0:05:43 > 0:05:46And the income a buy-to-let investor could obtain?
0:05:46 > 0:05:47From a rental point of view,
0:05:47 > 0:05:51I'd expect a property of this nature, when it's finished, to rent
0:05:51 > 0:05:57for a figure of approximately £450 per calendar month, possibly £475.
0:05:57 > 0:05:59Well, first impressions are, this house is a bit of a mess,
0:05:59 > 0:06:02but all that work is stuff you would have had to do anyway,
0:06:02 > 0:06:06so, it's a bonus that somebody's started it for you.
0:06:06 > 0:06:10A decent house in a good area, let's see who bought it
0:06:10 > 0:06:12when it went under the hammer.
0:06:12 > 0:06:15And this bidding happened towards the end of the day.
0:06:16 > 0:06:18Moston in Manchester, a vacant two-bedroom
0:06:18 > 0:06:20mid-terraced house,
0:06:20 > 0:06:23four miles north-east of Manchester city centre.
0:06:23 > 0:06:2515,000.
0:06:25 > 0:06:27£15,000.
0:06:27 > 0:06:2815 right up the back.
0:06:28 > 0:06:3220 I'm looking for. 20 here. Shall we say 25?
0:06:32 > 0:06:3325?
0:06:33 > 0:06:36Yes, 25 I've got. 30 I need. 35.
0:06:37 > 0:06:42No, it's with you, sir, at £30,000. I'll take 31 then.
0:06:42 > 0:06:45Somebody right behind you then, sir, so that's 31 right behind you.
0:06:45 > 0:06:4732 in front.
0:06:48 > 0:06:5133 sitting down. 34, sir?
0:06:51 > 0:06:5634, standing up. 35? 36. 37.
0:06:56 > 0:06:59No? At 36, standing up.
0:06:59 > 0:07:01A new bidder right at the back.
0:07:01 > 0:07:03Thank you. At 37, sir.
0:07:04 > 0:07:06I've got 37. I need 38.
0:07:06 > 0:07:0739.
0:07:07 > 0:07:0940, sir?
0:07:09 > 0:07:1141.
0:07:11 > 0:07:1242.
0:07:14 > 0:07:1543.
0:07:15 > 0:07:20No? With you, sir, at £42,000. I'm looking for 43.
0:07:20 > 0:07:22I'll take a half at 42 and a half.
0:07:22 > 0:07:2443 I need.
0:07:24 > 0:07:25Will you give me 43?
0:07:25 > 0:07:28He is. 43 and a half, sir?
0:07:28 > 0:07:31No? You definitely out, sir? I've got 43.
0:07:31 > 0:07:34First time, second time, we're all finished?
0:07:34 > 0:07:36It's yours now, sir. Well done.
0:07:36 > 0:07:38# Going, going, gone! #
0:07:38 > 0:07:42The successful bidder, who didn't hang around, was David.
0:07:42 > 0:07:49He paid £43,000 for the messy mid-terrace in Moston, Manchester.
0:07:49 > 0:07:54He's a full-time landlord who has several properties in his portfolio.
0:07:54 > 0:07:57I met him back at the house to find out his plans.
0:07:57 > 0:08:00- David, good to meet you. - Good to meet you, Martin.
0:08:00 > 0:08:02- Congratulations!- Thank you.
0:08:02 > 0:08:04What was it particularly that appealed about this place?
0:08:04 > 0:08:05The fact that...
0:08:07 > 0:08:08..it's a good street...
0:08:08 > 0:08:09is very attractive.
0:08:09 > 0:08:15I would have probably paid more than 43,000 for this house
0:08:15 > 0:08:20on a less good street, so, to get it on a really nice street like this...
0:08:20 > 0:08:23- is a good result.- Somebody's obviously done a bit of work.
0:08:23 > 0:08:25What are you going to do with it?
0:08:25 > 0:08:27Pretty much everything.
0:08:27 > 0:08:30You know, it's going to need the roof fixing and the pigeons removing.
0:08:30 > 0:08:34It's probably going to need damp taken away from the bottom.
0:08:34 > 0:08:38New kitchen, new bathroom, new electrics, new plumbing,
0:08:38 > 0:08:40new everything, really. Upstairs, I think, is fine.
0:08:41 > 0:08:43Downstairs, there is an issue with the kitchen,
0:08:43 > 0:08:45where I'm going to put the kitchen.
0:08:45 > 0:08:51The question is, whether it goes in here or in that outhouse.
0:08:51 > 0:08:55David reckons he has a unique approach to his rental portfolio.
0:08:55 > 0:08:58He really focuses on how energy efficient
0:08:58 > 0:09:01and comfortable his properties are.
0:09:01 > 0:09:04People think terraced houses are very cosy.
0:09:04 > 0:09:07The problem is the front and back walls.
0:09:07 > 0:09:10There are no cavities in them so you can't cavity fill the walls
0:09:10 > 0:09:13and bring them up to modern insulation standards.
0:09:13 > 0:09:15So what we will do here is we'll put insulated
0:09:15 > 0:09:18plasterboard on the inside of the walls.
0:09:18 > 0:09:21It will shrink the room a bit, by about 10 centimetres,
0:09:21 > 0:09:25but it will just make the room so much warmer.
0:09:25 > 0:09:28And warm tenants are happy tenants.
0:09:28 > 0:09:30I like David's approach.
0:09:30 > 0:09:33It is refreshing to see he intends to make the property better
0:09:33 > 0:09:34and make his tenants happy.
0:09:36 > 0:09:40# Oh happy day (Oh happy day)
0:09:40 > 0:09:43# Oh happy day (Oh happy day). #
0:09:43 > 0:09:47- So what is the budget for the work? - £15,000, I think, should see it right.
0:09:47 > 0:09:50- Listen, congratulations. Good luck with it.- Thanks very much.
0:09:50 > 0:09:53Looking forward to seeing how you get on.
0:09:53 > 0:09:57I think David has got himself a good buy with this property.
0:09:57 > 0:09:59A solid house in a nice area.
0:09:59 > 0:10:03The only question is, where will the kitchen be when we come back?
0:10:03 > 0:10:05You can find out later in the show.
0:10:10 > 0:10:14This is Maidstone in Kent on the banks of the River Medway,
0:10:14 > 0:10:17once the route for much of the town's trade.
0:10:17 > 0:10:22The property I'm here to see is a very comfortable seven minute walk from the train station.
0:10:22 > 0:10:27It's a little longer to the high street but only by about a minute.
0:10:27 > 0:10:30You couldn't get much more central, which should make up for the fact
0:10:30 > 0:10:34there's not a whole heap of curb appeal about this place.
0:10:34 > 0:10:37Still, for a one-bedroom flat so well located,
0:10:37 > 0:10:42£45,000 to £55,000, doesn't sound too bad.
0:10:42 > 0:10:44I'm going to check it out.
0:10:44 > 0:10:47The well tended communal gardens are a bonus.
0:10:50 > 0:10:53And the stairwell in the communal area is neat and tidy.
0:10:53 > 0:10:55So good first impressions.
0:10:59 > 0:11:02Nicely maintained public areas, which is always good to see.
0:11:02 > 0:11:05One of the first things I notice, storage heaters.
0:11:05 > 0:11:08We will come back to that a little later on.
0:11:08 > 0:11:10You've got a bathroom there and a nice white suite.
0:11:10 > 0:11:14You could possibly re-use that. A bedroom. A bit on the small size.
0:11:14 > 0:11:18It's funny because these sort of properties and buildings that were built in the '80s
0:11:18 > 0:11:22were always a lot smaller than the ones that were built in the '60s and '70s.
0:11:22 > 0:11:27You can see there is a table and chairs there, so it demonstrates that people can eat in here.
0:11:27 > 0:11:30You could put some sofas there and there.
0:11:30 > 0:11:32And kitchen, again, really small.
0:11:32 > 0:11:37But I'm hoping you would be able to get rid of that water tank.
0:11:37 > 0:11:40So overall, it is a little bit on the small side,
0:11:40 > 0:11:43but it could be a nice cosy place to live.
0:11:44 > 0:11:46Now, one word of caution.
0:11:46 > 0:11:49In a leasehold property like this, you can't just come in
0:11:49 > 0:11:52and start knocking walls down to try and make the layout bigger
0:11:52 > 0:11:55without first obtaining the freeholder's permission
0:11:55 > 0:11:58and there's no guarantee you'll get it.
0:11:58 > 0:12:03Now, back to something we saw earlier.
0:12:03 > 0:12:08So, storage heaters versus gas central heating. Verdict?
0:12:08 > 0:12:10Let me sit down.
0:12:10 > 0:12:15Storage heaters are notoriously unpopular and might put people off.
0:12:15 > 0:12:18They can be expensive to run and difficult to control.
0:12:18 > 0:12:22They are also pricey to replace if they break.
0:12:22 > 0:12:24Between £200 and £500 each.
0:12:24 > 0:12:29But gas, while being cheaper in the long run, is expensive to install.
0:12:29 > 0:12:31At least a few thousand pounds.
0:12:31 > 0:12:34And I don't even know if it's going to be in this block at all.
0:12:34 > 0:12:37Personally, if I was going to rent this flat out or live here,
0:12:37 > 0:12:40I would definitely look into the cost of switching
0:12:40 > 0:12:44and if that's not an option, take advice on modern thermostats
0:12:44 > 0:12:48and get these heaters working nice and effectively
0:12:48 > 0:12:50for whoever ends up living here.
0:12:50 > 0:12:52# If you don't believe I can warm you right
0:12:52 > 0:12:55# Take me to your house and let me stay all night
0:12:55 > 0:12:57# You've got to warm up
0:12:57 > 0:12:59# You've got to warm up. #
0:13:00 > 0:13:02This flat has a short lease.
0:13:02 > 0:13:04Not a worryingly shortly lease,
0:13:04 > 0:13:07but at 74 years it's something that needs to be addressed.
0:13:07 > 0:13:10Mortgage companies should not have an issue lending
0:13:10 > 0:13:12with the current length but the lower the lease gets,
0:13:12 > 0:13:15the more expensive it is to extend,
0:13:15 > 0:13:17and it will put subsequent buyers off.
0:13:17 > 0:13:20So my advice would be to just bite the bullet,
0:13:20 > 0:13:22fork out the cash and get it sorted.
0:13:22 > 0:13:27It's an expensive bit of paperwork but worth every single penny.
0:13:27 > 0:13:31It's not a big project and it's only a few minutes from the town centre.
0:13:31 > 0:13:33I think this could be a good one
0:13:33 > 0:13:38if it goes for anything around the guide price of £45,000 to £55,000.
0:13:38 > 0:13:40Does a local estate agent agree?
0:13:40 > 0:13:44What could it fetch on the open market with a decent refurbishment?
0:13:45 > 0:13:47I would suggest it's probably going to achieve
0:13:47 > 0:13:50somewhere in the region of £90,000 to £95,000.
0:13:51 > 0:13:54And the potential rental income it could generate?
0:13:54 > 0:13:57Once renovated, I would imagine this property letting
0:13:57 > 0:14:00for something in the region of £550 per calendar month.
0:14:02 > 0:14:07This is a nice easy flat in an extremely convenient location,
0:14:07 > 0:14:09which would rent very well.
0:14:09 > 0:14:12So let's see who went for it at the auction.
0:14:12 > 0:14:1495, we go to now.
0:14:15 > 0:14:19Purpose-built modern town centre flat for investment or occupation.
0:14:19 > 0:14:22So what are we going to say on that one?
0:14:22 > 0:14:26Can I say £50,000 to start me off on this one? I'll take 45.
0:14:26 > 0:14:31£45,000 bid, I've got. At 50, do I see? 50, I'm bid. 55.
0:14:31 > 0:14:37It's against you. 55 at the back, I have. 57 now if you like. At 55,000.
0:14:37 > 0:14:4057, I've got. 60. And two. 62.
0:14:40 > 0:14:45From either of you. 62. 64. And six. 66, can I see?
0:14:45 > 0:14:4865. 66.
0:14:48 > 0:14:52And seven. 67. And eight.
0:14:52 > 0:14:5568. And nine. 69.
0:14:55 > 0:14:59Oh, you are looking for moral encouragement? 69, bid. At 70.
0:14:59 > 0:15:05And one. 71 now, if you like. At 70,000 to the couple over there. 71.
0:15:05 > 0:15:1272 sitting down. 73. At 72 then, I'm selling for the first time.
0:15:12 > 0:15:1872,000 for the second time. Third... 73. And four. And five.
0:15:18 > 0:15:23He wants it, you know. He really wants it. 75? At £74,000. 75?
0:15:23 > 0:15:26Are we all done at 74 then? For the first time.
0:15:26 > 0:15:2874 for the second time.
0:15:28 > 0:15:32Third and final time at £74,000. Are we all done? Well done.
0:15:32 > 0:15:34You've bought it. F552.
0:15:36 > 0:15:40The successful bidders, paying 74,000, were Stuart
0:15:40 > 0:15:44and his wife, Lindsey, who is expecting their second baby.
0:15:44 > 0:15:46# I've found a new baby
0:15:46 > 0:15:48# I've found a new boy
0:15:48 > 0:15:51# That sweet talking baby
0:15:51 > 0:15:53# Is my pride and joy. #
0:15:53 > 0:15:55The couple are both police officers
0:15:55 > 0:15:57and already have a one-year-old daughter.
0:15:57 > 0:16:01I met them back at the flat to find out their plans.
0:16:01 > 0:16:05- Lindsey and Stuart, congratulations. And congratulations.- Thank you.
0:16:05 > 0:16:09You are just about to have a baby and you've bought a flat.
0:16:09 > 0:16:11So whose idea was that then?
0:16:11 > 0:16:16Mine, kind of. I like a lot of work. We have done a couple of others.
0:16:16 > 0:16:19We just thought, the banks are a bit rubbish,
0:16:19 > 0:16:21so we'd see what we could find.
0:16:21 > 0:16:23We looked at auctions for well over a year
0:16:23 > 0:16:27and this time around we thought we could rent it as well if we can't sell it.
0:16:27 > 0:16:29So we just went for it.
0:16:29 > 0:16:34Property developing is something Lindsey and Stuart have always wanted to do as a sideline
0:16:34 > 0:16:37but haven't been able to fund a separate property until now.
0:16:37 > 0:16:42They usually live in the property, take their time to do it up and then sell on.
0:16:42 > 0:16:45Let's talk about the block of flats. It's fabulous.
0:16:45 > 0:16:48It's set in a wonderful little setting. Very green.
0:16:48 > 0:16:50The communal areas are really well maintained.
0:16:50 > 0:16:55- But things like the windows probably need replacing.- Yes. We have looked at getting double glazing.
0:16:55 > 0:16:58We've just obviously got to get permission.
0:16:58 > 0:17:02A couple of the other flats have changed it already, so it shouldn't be too much of a problem.
0:17:02 > 0:17:04What about things internally in the flat?
0:17:04 > 0:17:08Other than to freshen it up and make it modern, obviously you've
0:17:08 > 0:17:11got a water tank in there that takes a lot of space in the kitchen.
0:17:11 > 0:17:14I'm hoping to get that taken for a combi and either make an open plan
0:17:14 > 0:17:18kitchen or at least make the kitchen larger by removing that.
0:17:18 > 0:17:20How much have you got to spend here?
0:17:20 > 0:17:22If we can do the boiler, I am going to go for five.
0:17:22 > 0:17:24But without the boiler, I would say about £3,000.
0:17:24 > 0:17:26The majority would be on the windows.
0:17:26 > 0:17:30- Between £3,000 to £5,000?- Yes. I think it will be manageable.
0:17:30 > 0:17:32And the couple are hoping that this
0:17:32 > 0:17:35might end up being the start of a full-time property career.
0:17:35 > 0:17:37So what is the timescale?
0:17:37 > 0:17:40A month, if I'm left to do it with no baby.
0:17:40 > 0:17:42If the baby comes, I would say two to three.
0:17:42 > 0:17:46I'll be off every day so I can devote every day to coming here and get it done.
0:17:46 > 0:17:50So even though you are off with your paternity leave, you are going to be here?
0:17:50 > 0:17:53Yes. I don't like to sit around. She doesn't let me!
0:17:53 > 0:17:56It's been such a pleasure meeting you today.
0:17:56 > 0:18:00- Good luck with the baby. I hope the flat goes to plan.- Thank you.
0:18:00 > 0:18:04So this is a platform for Lindsay and Stuart to forge a new career.
0:18:04 > 0:18:09How fantastic! But that budget, are they serious?
0:18:09 > 0:18:11You can find out how it all goes
0:18:11 > 0:18:14and when the baby arrives later on in the show.
0:18:17 > 0:18:20Now, getting the property for the right price is the first step
0:18:20 > 0:18:22toward success.
0:18:22 > 0:18:24But the second stage is just as important -
0:18:24 > 0:18:29sticking to your plans and budget is the best route to a decent profit.
0:18:29 > 0:18:33So how did our buyers get on? Let's find out.
0:18:33 > 0:18:37Back now to Moston in Greater Manchester and an auction lot
0:18:37 > 0:18:40that appeared to be the classic redevelopment property.
0:18:40 > 0:18:43The worst house on the best street.
0:18:43 > 0:18:45It caught the eye of David,
0:18:45 > 0:18:50a property developer for many years, who paid £43,000 for it,
0:18:50 > 0:18:53even though it had no kitchen or bathroom.
0:18:53 > 0:18:55He planned to add it to his buy-to-let portfolio.
0:18:56 > 0:19:02There was plenty to do but David had a realistic budget of £15,000.
0:19:05 > 0:19:09It's now 18 weeks later and what was originally
0:19:09 > 0:19:14the worst house on the street is now, well, one of the best.
0:19:14 > 0:19:17# Look how far we've come
0:19:17 > 0:19:19# Look what we've made
0:19:19 > 0:19:23# Started from nothing
0:19:23 > 0:19:24# Building
0:19:24 > 0:19:26# Brick by brick by brick by brick
0:19:26 > 0:19:29# Brick by brick by brick by brick
0:19:29 > 0:19:32# Brick by brick by brick by brick
0:19:32 > 0:19:34# Brick by brick by brick by brick
0:19:34 > 0:19:37# Brick by brick by brick by brick
0:19:37 > 0:19:38# Brick by brick by brick by brick. #
0:19:38 > 0:19:41So here is the big change of layout downstairs.
0:19:41 > 0:19:45The kitchen was behind me in the outhouse.
0:19:45 > 0:19:49Now, it's in this room, which is the new kitchen.
0:19:49 > 0:19:52I think it's fantastic. It will be a nice, warm, dry kitchen.
0:19:52 > 0:19:56Originally, the former kitchen was in the extension at the back
0:19:56 > 0:19:59of the property. But that is now going to be the utility room.
0:19:59 > 0:20:02A great space for white goods and laundry
0:20:02 > 0:20:06and somewhere to leave your shoes if you are going out into the back yard.
0:20:06 > 0:20:10Apart from his builder, David employed a structural engineer to supervise
0:20:10 > 0:20:13the removal of the rear chimney from the kitchen and bedroom above,
0:20:13 > 0:20:17which is now almost the same size as the master bedroom at the front.
0:20:21 > 0:20:26David and his team have completely rewired and replumbed the property.
0:20:35 > 0:20:38The pigeons have been evicted from the roof
0:20:38 > 0:20:42and there's new timbers and about 100 replacement tiles,
0:20:42 > 0:20:48plus insulation in the loft, so the property is now watertight and cosy.
0:20:48 > 0:20:52One of the important things about this house is the insulation.
0:20:52 > 0:20:57Tenants want to be warm. You can see that this wall has been plastered.
0:20:57 > 0:21:02What you can't see is that behind there is insulated plasterboard. It's about this thick.
0:21:04 > 0:21:06Now onto the money.
0:21:06 > 0:21:08How much has the refurbishment come in at?
0:21:08 > 0:21:12My original budget was £15,000. I have spent more than that.
0:21:12 > 0:21:16It has crept up towards £20,000.
0:21:16 > 0:21:19That's partly because we found some extra structural work.
0:21:19 > 0:21:25And partly, the tenant who came on the scene and negotiated with me
0:21:25 > 0:21:27and we've upped the spec a little bit.
0:21:27 > 0:21:30Well, it's good news that David's got a tenant lined up.
0:21:30 > 0:21:33And with the £43,000 he paid at auction,
0:21:33 > 0:21:37it takes his total investment to £63,000.
0:21:37 > 0:21:41What will two local estate agents think of the transformations
0:21:41 > 0:21:42David's made?
0:21:42 > 0:21:43From a sales point of view,
0:21:43 > 0:21:48I would look to market the property at between £70,000 and £75,000.
0:21:48 > 0:21:54For a sale on this property, I'd look to market the property at £75,000.
0:21:54 > 0:21:57If David was to sell, that's a profit of between £7,000
0:21:57 > 0:22:00and £12,000 before taxes and expenses.
0:22:00 > 0:22:04He's really interested in the rental yield of this two-bedroom terrace.
0:22:04 > 0:22:09So, what do the estate agents think he could get in the present?
0:22:09 > 0:22:10It's in very good condition.
0:22:10 > 0:22:14I think you could get quite a good rent for a two-bedroom property.
0:22:14 > 0:22:15£500 per calendar month.
0:22:15 > 0:22:18Well, I think it will be attractive to a tenant and the rental
0:22:18 > 0:22:20market's obviously very strong at the moment.
0:22:20 > 0:22:22So I would expect to achieve a rental figure
0:22:22 > 0:22:25of between £450 to £500 per calendar month.
0:22:27 > 0:22:31That top figure would give David a yield of over 9.5%.
0:22:31 > 0:22:35David has already agreed to slightly less than that figure.
0:22:35 > 0:22:37But there's a good reason for that.
0:22:37 > 0:22:41It's actually going to someone who's been in one of my other houses.
0:22:41 > 0:22:43And he's done quite a lot of the work here.
0:22:44 > 0:22:48And as he was working on the house, he wanted to live in it.
0:22:48 > 0:22:51And negotiated a tenancy with me.
0:22:51 > 0:22:55A little bit less than the market rate,
0:22:55 > 0:22:58as a thank you to him for the great work he's done for me.
0:23:03 > 0:23:05We are back in Maidstone in Kent.
0:23:05 > 0:23:08Earlier in the programme, Stuart and his wife Lindsay
0:23:08 > 0:23:11paid 74,000 for this one-bedroomed flat
0:23:11 > 0:23:13as their first investment property.
0:23:14 > 0:23:16The couple are both police officers.
0:23:16 > 0:23:20Lindsay was on maternity leave expecting the couple's second baby.
0:23:21 > 0:23:25If the freeholder agreed, they'd hoped to replace the windows.
0:23:25 > 0:23:29And I thought the central heating could do with replacing as well.
0:23:29 > 0:23:32I was surprised Stuart had set a budget of just 3,000 to 5,000.
0:23:33 > 0:23:36And the timescale?
0:23:36 > 0:23:38A month if I'm left to do it with no baby.
0:23:38 > 0:23:41If baby comes, I'd say two to three.
0:23:41 > 0:23:46Well, it's now 14 weeks later and baby Paige is now six weeks old.
0:23:51 > 0:23:54And look at the lovely flat that Stuart has successfully
0:23:54 > 0:23:55delivered as well!
0:23:58 > 0:24:01# I'm going to watch you shine
0:24:01 > 0:24:05# Gonna paint a sign so you'll always know
0:24:05 > 0:24:09# As long as one and one is two
0:24:12 > 0:24:14# There could never be a father
0:24:14 > 0:24:19# Loves his daughter more than I love you. #
0:24:20 > 0:24:24I'm really pleased to see the storage radiators have been
0:24:24 > 0:24:26replaced in the bedroom and the hallway.
0:24:26 > 0:24:30But as Lindsay explains, the combi boiler just wasn't feasible.
0:24:30 > 0:24:34So, in the front room, we re-wallpapered throughout.
0:24:34 > 0:24:37Just general paintwork, skirting boards and ceiling,
0:24:37 > 0:24:39and new windows installed.
0:24:39 > 0:24:42We had new heaters, electric heaters installed.
0:24:42 > 0:24:46We couldn't go for gas central heating, so we just upgraded them.
0:24:46 > 0:24:50We initially wanted to move this cupboard and expand the kitchen,
0:24:50 > 0:24:53but we couldn't because there's no gas in the building,
0:24:53 > 0:24:54so we couldn't change the system.
0:24:54 > 0:24:58So obviously we weren't given permission to do that.
0:24:58 > 0:25:00Apart from replacing the windows,
0:25:00 > 0:25:04Stuart has done the majority of the work himself with help from his dad.
0:25:04 > 0:25:07Unfortunately, we had to keep the same shape of the kitchen
0:25:07 > 0:25:09because we couldn't get permission to make it larger.
0:25:09 > 0:25:13So, new worktops, new cupboards, cooker top, new sinks -
0:25:13 > 0:25:16everything has all been put in and fresh bit of paint on them.
0:25:16 > 0:25:19In the end, Stuart left the bathroom suite
0:25:19 > 0:25:22and just changed the flooring and added a matching wall colour.
0:25:24 > 0:25:27The idea was, Stuart would come up here even if I was overdue
0:25:27 > 0:25:29and get it all done and everything would be great.
0:25:29 > 0:25:32But I was so heavily pregnant, with a year-and-a-half child
0:25:32 > 0:25:35running around, so that wasn't going to happen.
0:25:35 > 0:25:36I needed him at home.
0:25:36 > 0:25:40The toddler got dumped on grandparents
0:25:40 > 0:25:42and the newborn obviously came with us
0:25:42 > 0:25:45and we had to take it in turns - one would do something
0:25:45 > 0:25:47while the other looked after her and go from there.
0:25:47 > 0:25:50It was quite nice, got a bit of family time, the three of us.
0:25:50 > 0:25:53Now, with no combi boiler in the end, I'm keen to find out
0:25:53 > 0:25:59if Stuart did manage to keep to that very small budget of 3,000-5,000.
0:25:59 > 0:26:02The budget was pretty good. We got 4,100 in the end.
0:26:02 > 0:26:05It worked out quite nicely.
0:26:05 > 0:26:07Well, I am impressed.
0:26:07 > 0:26:09With the 74,000 they paid at auction,
0:26:09 > 0:26:14that takes their total investment to £78,100.
0:26:14 > 0:26:16So, have they decided against selling?
0:26:16 > 0:26:18Well, we have different opinions.
0:26:18 > 0:26:21Lindsay wants to rent the place, I want to sell it
0:26:21 > 0:26:25and hopefully take a profit and make more houses and do the same thing.
0:26:25 > 0:26:27So we'll just see who wins between the two of us.
0:26:27 > 0:26:31Well, maybe making that decision will be a bit easier when Stuart
0:26:31 > 0:26:35and Lindsay hear the valuations from two local estate agents.
0:26:36 > 0:26:42If I were to put this property up to let, I would expect to get 550.
0:26:42 > 0:26:45They might even squeeze £600 per calendar month.
0:26:45 > 0:26:49I would expect to achieve around £575 per calendar month.
0:26:49 > 0:26:55A yield of almost 9%, based on £575 per calendar month.
0:26:55 > 0:26:58Will that convince Stuart to rent it out?
0:26:58 > 0:27:00No, I want to sell it.
0:27:00 > 0:27:03I want to rent it. I think it's a good income.
0:27:03 > 0:27:07- But you want to sell, don't you?- Yeah.
0:27:07 > 0:27:10Oh, a battle of wills here. And what about Stuart's preferred option?
0:27:10 > 0:27:13What could it resell for?
0:27:13 > 0:27:16I would expect to achieve something in the region of £90,000.
0:27:16 > 0:27:19I would expect this property to achieve around £100,000.
0:27:19 > 0:27:22A potential profit of between
0:27:22 > 0:27:28£11,900 and £21,900, minus taxes and fees.
0:27:28 > 0:27:32Anything above 90, to be honest, I'd be quite happy to sell it.
0:27:32 > 0:27:35Well, no matter who gets their way on this flat,
0:27:35 > 0:27:38you have to admire them for taking on their first property
0:27:38 > 0:27:42development project just as their second baby was about to be born.
0:27:42 > 0:27:45And doing such a good job, too!
0:27:45 > 0:27:47I think the timing has been...
0:27:47 > 0:27:50You know, it could have been better a month before or
0:27:50 > 0:27:52a couple of months later.
0:27:52 > 0:27:54But the right property came along at the right location,
0:27:54 > 0:27:58and so the timing we just had to accept.
0:28:00 > 0:28:03Has all this whetted your appetite for property developing?
0:28:03 > 0:28:07Make sure you tune in next time to Homes Under The Hammer.
0:28:07 > 0:28:09- We'll see then.- Goodbye.- Goodbye.