Episode 7 Homes Under the Hammer

Hello. People get involved in developing for all sorts of reasons.

To create somewhere to live

or work in, or maybe to do up and sell.

The main concern is about getting value for money.

So how do we go about doing that?

One way could be to buy your next home under the hammer.

Well, you really do need to do your background research

before you buy at auction.

But once you've done that, you could get yourself a real bargain.

So here's a sneaky peek at the properties that went under the hammer on today's show.

This Surbiton semi suits me.

My family just come in through the front door

and dump all their stuff.

So when you see a space like this, it makes me very happy.

This ground floor flat in Jarrow, Tyne on Wear, has a rather harrowing problem.

Dah-dah-dah! Damp.

Whereas this 1980s property in Derby should be a safer bet.

Given the age of the property,

hopefully not too many nasties to discover.

All these properties have been sold at auction.

We'll find out who bought them and what they paid for them

when they went under the hammer.

Sold at 121.

MUSIC: Theme to The Good Life

And so to Surbiton, Surrey,

spiritual home to those stalwarts of suburbia, Tom, Barbara, Jerry and Margot.

But will today's property be semi-ready for the good life?

Or semi-derelict?

A mile or so from Surbiton

and the classic suburban semi-detached theme continues.

Although this area is known as Berrylands. Sounds idyllic, doesn't it?

Well, if being close to fast rail links to London and the 1930s is your thing,

then you'll be in seventh heaven because that's what you've got.

Oh, and the A3 at the end of your road. Handy. A little noisy though!

ROAR OF TRAFFIC

So that's one negative of the property I've come to see today.

A three-bed semi which had a guide price of 245,000.

Well, a nice big wide hallway.

Look at that. I know I'm always banging on about it,

but my family just come in through the front door

and dump all their stuff.

So when you see a space like this, it makes me very happy.

You've got loads of lovely storage here, which is great.

A little picture rail to put your posh plates on.

Through here, the kitchen, which is quite spacious for a 1930s house.

A reception room to the front,

although you'd need to replace that double glazing

because it'll be a bit noisy with the A3 at the end of the road.

And at the back of the property your second reception room or your dining room.

You have an option here. I know what I'd do if this was my house.

I think I would knock this wall down.

Because I'd like to have one big open space.

You've got your kitchen area.

Have a nice big family table

and a lovely view of the garden.

You'll need to replace these or update them with something more modern.

But overall, this has got the makings of a really nice family home.

With this lovely garden at the back,

there's the obvious potential of extending out there.

But let's take a look upstairs.

There's a good sized double at the front,

the smallest single next door,

and another decent double at the rear.

There's a separate loo next to a rather big bathroom.

Hmm. Perhaps even too big.

Now, what about combining the loo and the bathroom,

to make it one big space,

put a wall up here, doorway.

And you could call this bedroom three.

Then you'd have three really nice size bedrooms for a family.

I think that would work.

And you could put the bathroom over the hallway in the very small room.

Now, you need to think about plumbing and drainage,

but if you're going to go the whole hog with this house and do it all up anyway,

that is definitely something I would consider doing.

It's a family sized house with a family garden in a family area.

But as you could only fit a single bed in one of the bedrooms,

you'd struggle once the kids got a bit older.

With that re-jig, you'd extend the life span of the house

which would certainly be cheaper than moving.

But what about adding more space?

Could that make money for you?

Well, there are a few ways you could go.

Option one, you could just refurbish the house as it is.

Option two, you could extend that ground floor.

Or, option three, go much further

by extending on the ground floor and adding a fourth bedroom in the loft.

So which would be the smartest choice for a developer

seeking to make a healthy profit?

We asked a local property expert

for his thoughts.

You've got the potential to go out to the side, and room out the back.

Plus the loft. It could be a fourth bedroom and en-suite on there.

So the demand for four-bed houses is higher than a three-bed house.

So extending the property could prove worthwhile.

But how do the figures add up?

Bearing in mind that the guide price was 245,000,

what could the place fetch on the resale market?

If you were to do the property up to a high standard,

without extending the property,

you'd be looking in the region of 370 to £375,000.

If the property was to be extended out to the side,

a full width extension out the back

and into the loft to create a fourth bedroom,

you'd be looking in the region of 450,000.

Now, that's interesting.

Snap this one up close to that £245,000 guide price

and there's money to be made here,

whether or not you extend.

You just have to weigh up how much time and money

you really want to spend on the renovation.

But what about potential rental valuations?

As a three-bedroomed property, you'd be looking in the region of 1,600 to 1,700 per calendar month.

If the property was extended and made into a fourth bedroom,

you'd be looking in the region of 2,000 to 2,200 per calendar month.

This is a great house with the chance to make it better and bigger

if you fancy, with some cash in it to boot.

Let's see who went for it at the auction.

Lot five. Three-bed semi.

Who'd like to kick off on this?

200? OK. 200. How much?

Ten. 15.

20. 25.

30.

235.

240.

245.

The bidding quickly passed the £245,000 guide price.

We rejoin the action at 313,000.

313. 314.

315.

316.

317.

318.

319.

320.

Well done. 320.

321.

320 with you.

Anyone else? At 320,000.

First time, second time,

third and last time. Have you all done?

Sold 320. Well done.

That successful bid was placed by Ahmed,

right against the wall in a pink shirt.

He's originally from Baghdad

and has been developing properties in the UK

since year 2000.

He used to own a Surbiton estate agency.

He bought the semi for 320,000,

a whopping 75 grand over the guide price.

Did he get rather carried away with this very popular lot?

-Ahmed, congratulations.

-Thank you, Lucy.

-You've got the house.

-Yes.

-How much research did you do?

Uh, not much for this house in particular.

But I know the area, and I didn't need to do the research.

I know what houses, three bedrooms, four bedrooms, sell for.

How was it on auction day for you? Did you pay what you wanted to pay?

No, I did not, unfortunately.

I went over my maximum.

You went over your maximum?

-Yes.

-Why did you do that?

I was carried away, basically!

I felt the heat. I wanted the house.

I thought I paid too much.

Came back, did the research,

and in fact, I got it for the market value.

At the end of the day, it worked good.

-Were you quite cross with yourself after the auction?

-Very much so!

Very. It's not for the money as such,

it's more for losing the discipline.

# It was the heat of the moment

# Telling me what my heart meant

# The heat of the moment

# Showed in your eyes #

As well as owning an estate agency,

Ahmed has spent time in Canada and Belgium developing properties

and has been back in the for the past three years.

He now works full time for himself, turning properties around.

So, having overspent on buying this one,

how much does he plan to spend on the renovation?

There are two different budgets depending on the work.

The first plan I have is to convert the loft plus a rear extension.

And a garage conversion as well.

Plus all the refurbishment.

That would take me to my first budget.

I'm hoping 70 will do it.

-So that's the full works.

-Full works.

-70 grand.

-If I do just a rear extension,

garage conversion, plus total refurbishment, sort of high spec,

I might in a way get the same margin with the loft conversion.

So now I'm in two different worlds.

One go the loft conversion and the other one not.

OK. What's the budget for plan B, for not going in the loft.

-How much are you going to spend?

-Uh, 40.

What I would say on that is that you have two really good sized bedrooms and a really small bedroom.

I think if you can move the bathroom, and put it in the small room

you can create a nice big bedroom where the bathroom is,

then, perhaps, you might not need to have to think about doing the loft conversion.

Exactly. Spot on.

What we have in the plan now is exactly what you said.

So we'll be putting the family bathroom, with or without the loft conversion,

I'm going ahead with it.

However, at the back of my head,

it's saying, "You should go for the loft conversion." We'll see!

Ahmed has never done a loft conversion before.

So with little, if any, extra money to be made on that,

I think it's best he saves that experience

for when it can pay off more handsomely than on this project.

I reckon plan B is the way to go.

That extension to the rear and sides

plus re-jigging the upstairs layout.

He aims to get it done in four to six months

with that 40 grand budget,

ending in that super-modern high-spec finish.

But he's not doing it all by himself!

Helping him on the project will be his two sons, eight-year-old Arthur

and Aidan, who's six.

No doubt they plan to follow in Dad's footsteps!

I think they love it. They absolutely adore the property development.

This whole thing. I have to admit, they're not helping whatsoever!

Half an hour, ten minutes. If I'm lucky it's half an hour!

-"Dad, I'm bored now!"

-"Dad, let's go."

But then I give them that.

They always sit with me to look at the plans.

Whether it's at the property or at home in my office,

they will sit with me and go through the plans.

They will try to draw as well.

-So it's very good.

-You never know.

-They're involved heavily with the design.

Whenever I buy things,

they will look, "No, Dad, we don't like this. We don't like that."

-It's good.

-Some good advice there from some little men.

-Yes.

-It's been lovely meeting you today.

-Thank you, Lucy.

-Good luck with this.

-Thanks a lot.

-Thank you. I can't wait to see the outcome. Well done.

-Thank you very much. Thanks a lot.

So, normally disciplined Ahmed did overspend on this place.

But he can still pull it back and pocket some profit if he's careful.

You can find out what plan he goes with later in the show.

This is Jarrow, in the Tyne and Wear area or north-east England.

I'm right by the entrance to the Tyne Tunnel.

A lot of the housing in this area

was compulsory purchased to make way for the tunnel and the surrounding roads.

But what's left has been benefitting from some really good regeneration

that's gone on in recent years.

The first toll tunnel under the River Tyne

was completed in 1967.

The second tunnel in 2011.

It connects North Shields to Jarrow

on the south bank of the river.

Well, walking distance from Jarrow town centre is the property I'm here to see.

And it's a two-bedroomed flat

in this terrace here.

The ground floor flat originally had a guide price of 25,000.

But this was reduced to just £10,000 on auction day.

So...

What do we have?

A little entrance area there.

I'd want to see an internal door on here.

Gives a bit of insulation from the cold.

But straightaway it's got a nice feel to it.

Big high ceilings, a few original features like that archway there for instance.

And through into what is basically, I guess, one of the bedrooms.

It's two bedrooms, so surprisingly spacious.

But something which isn't good or nice at all

virtually every wall, it seems, has got problems with - dah-dah-dah...

damp.

Not good.

Not good at all.

Hmm.

The room may be a fair size,

but unfortunately, every wall has damaged plaster.

A second bedroom down the hall has the same problem.

Two rooms in and all I can see is one thing.

Then at the back of the flat is the main living area.

And more trouble!

Oh, dear. And it carries on in here as well.

It's quite unusual.

Normally, internal walls don't get that much damp problem,

but you can even feel it.

Holy mackerel. That's not brilliant.

And as you can see, it looks to me like the joists and the floor itself

have been affected by that.

And already... I banged on that a bit hard, but that would go through.

It's not good. You need to take all this out and investigate what's going on.

If the joists have gone, it won't be cheap to get that sorted. That's all manual stuff.

And that's after you've solved the initial problem,

which is probably rising damp.

But again, nice sized rooms.

You can't complain about the size of this place.

And it gets better because I imagine originally, the house would have finished here.

But it's had this nice-sized extension put on at the back.

A kitchen...

Er...

No question where this is going. In the skip!

But it's a good size. And at the back there, a loo and bathroom.

So all in all, lots and lots of space.

Very deceptive from the front.

But budget-wise,

a big chunk of it's going to be spent sorting out the basics.

I can see this bathroom joining the kitchen in that skip.

So far, it's only the generous proportions

that are selling points for this place.

Even if the size of the back yard can't match the interior,

at least a bit of a spruce up out here could make it more attractive.

But let's focus on the main problem here.

So, what's causing all this damp?

Well, it's the usual suspects.

For instance, downpipe here.

You can see it's straight onto the pavement

but more importantly onto this bit of the property

there's some cement filling missing from that

so water getting in that way.

Coming up to the windows, you can see they are well shot.

Water getting in there, behind there, not good news.

At some stage, it seems the property has had some injection damp-proofing

put in. These little plugs, where they drill the holes and squirt the chemical in,

they put those in afterwards, so that indicates that's happened.

It's obviously failed. When it comes to this injection damp-proofing,

it often comes with a long guarantee.

Sometimes life-time, sometimes 25 years.

Often that is passed on to the new owner of the property.

So if I bought this place I'd look to see if I could trace who did this

and see if there's still a guarantee that's valid.

Sort those things out. No problem, really(!)

Despite all that damp,

this has not turned the place into a damp squib.

I like the proportions of this house

and the enormity of the damp issue does seem to be reflected

in that revised guide price of just £10,000.

We asked a local estate agent for her opinion

on the prospects for this two-bed ground floor flat.

It's very much a typical Tyneside flat. Not everybody understands

Tyneside flats are built as uni-flats,

so it's never been converted.

It was built as a flat.

It's spacious, it's got high ceilings

and well-proportioned rooms.

Could this property make a solid return for an investor?

This property could rent for between 395 and £425 per calendar month.

And if sold on?

I would value this for between 55 and £60,000.

So, a few problems with this one mostly caused by that damp.

The rest of it, just a general refurbishment

which you might normally expect in this kind of place.

However, for the guide price,

I really like this. It's a good one.

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

Lot number two. We've got it advertised there with a price guide of £25,000.

However, they've reduced it and I can actually start at £10,000.

I need £10,000. We're here to sell.

In the back door, 10,000. Do I have 12 anywhere else?

£12,000. 14.

14 bid. 16.

18.

20. 22?

I'll take one if it'll help.

21 bid. New bid at 21. 22?

Not yet. 22. 22 bid.

23?

500? 22 and a half bid.

23. 23 and a half?

24?

£24,000. Do I have anything else?

24,250 bid. 24 and a half?

24 and a half. 24,750?

24 and a half. Right in the centre. I'm selling at 24 and a half.

I'm going once at 24 and a half.

I'm going for the second time at £24,500.

That final successful bid of 24,500 was made by Paul.

He's a Jarrow-based property developer and landlord

who has bid and bought at auction several times before.

I met him, along with his wife, Angie,

back at their latest purchase to find out why they bought this flat.

Angie, Paul. Great to meet you both.

-And you.

-Congratulations.

So, why did you want to buy this?

-Really, just to add another property to our existing portfolio.

-Right.

Extend on that. We're concentrating on this street in particular just now.

Concentrating on this street? Not even this area?

-No. I have four properties in this street.

-Right.

We want to develop it to a good standard and encourage the area to prosper and grow.

-Well done.

-I'm actually from this area.

-Right.

Being actually born and bred on this estate has made a big difference

-to why we want to put something back into the area now.

-Right.

-Tell me more.

-We started doing this in 2005.

We just wanted to progress from there.

-Right.

-So everything's just grown.

-So you grew up in the area, very close by?

-Oh, yes.

Our original street where I lived was the first to get knocked down for the Tyne Tunnel development.

It's great to meet someone who wants to put something back into the area

where he was born and raised.

It's not all about altruism, though.

Good quality properties mean you can choose good tenants

who look after your investment.

That's just wise business sense,

which Paul appears to have in spades.

Is his wife, Angie, a nurse, equally business-minded?

What attracted you into this property world, Angie, in the first place?

Well, it was Paul's idea, really.

He's the one that likes to take a gamble. I'm a bit more conservative about things.

He just kept saying, "Come on, we need to take a chance."

And we started off with one property and I remember going in and signing for it,

and thinking, "Is this the right thing? No, I'm scared."

And now, 20 properties down the line, we're just keeping on going.

There's no stopping him. He gets one, does it up and moves on. And gets another one.

At what number of properties did it become full time, do you think?

-Ten.

-Ten.

-What were you doing before that?

-I used to work in the chemical plant industry.

-Right. OK.

So this is a complete change.

Do you get involved in the housing projects at all?

Not quite so much now.

Because Paul's doing it full time now and we've got so many of them.

But certainly originally when we bought number one and number two,

I was there helping, doing the tiling of the bathrooms and kitchens.

-First-class tiler.

-Really?

-I like that sort of thing. I like getting stuck in.

Angie still has a full-time job,

so she's not hands-on with the refurbishments any more.

But while doing most of the work himself,

Paul will still call on the specialist trades like the electrics and plastering.

And sorting out that major damp problem.

-All the walls are going to be removed back to the original brickwork.

-Right.

Brickwork injected, treated, and a new cement membrane on top of that.

How about that's affected the joists and the floorboards and things?

In here there are several rotten joists now.

We'll have to lift the floors and find the true extent of the damage.

Replace all the damaged joists

-and treat, because another big problem here is woodworm.

-Really?

Yes!

I've been in quite a few of these properties

and some of them, you can't take one step in front of another

-for areas collapsing.

-Right.

-So you'll be spraying it to be on the safe side.

-Oh, yes.

The whole floor will be gutted and renovated.

Paul reckons on a £12,000 budget for the job

plus a sensible contingency fund of £2,000

in case there are any more hidden horrors.

And the timescale?

-We'd normally do it in four to six weeks.

-Right.

-But we'll have to go between six and eight.

-Right.

-Just because of personal events coming up.

-Right.

We've got two sons. One's turning 21 and one's turning 18.

-Oh, wow! Major party time.

-A busy year.

-Major party time.

It's a busy time of the year.

Congratulations, both of you.

-And I look forward to seeing how you get on.

-Thank you.

-Thank you.

So, another house on this street for Paul and Angie.

It's really nice that one of their driving forces

is to improve the area.

Giving something back. We always like that.

How will they get on with this place?

Hopefully not too much of an issue.

The floors sound like a problem, though.

Find out how they got on later in the show.

Coming up: there could be trouble out back

at this 1980s Derby semi.

I really don't like the way it's very close to the house.

In Jarrow, Tyne and Wear,

Angie is chuffed with all her husband Paul's hard graft.

I think Paul's done an absolutely amazing job with it.

But first, in Surbiton,

Ahmed and his team have thoroughly enjoyed renovating this property.

It's a wonderful project. We've all loved it.

Back now to Surrey, and this 1930s three-bed Surbiton semi

which Ahmed bought at auction for 320,000,

75 grand over the guide price.

He used to be an estate agent, but now spends his time developing properties.

This one presented plenty of options for improvement.

The first plan I have is to convert the loft, plus a rear extension.

And a garage conversion.

I'm hoping 70 will do it.

-So that's the full works.

-Full works.

-70 grand.

-Yeah.

If I do just the rear extension,

garage conversion,

plus total refurbishment, high spec.

What's the budget for plan B, for not going in the loft.

-How much are you going to spend?

-40.

However, in the back of my head,

you should go perhaps for the loft conversion. We'll see!

With not much to be gained in the profit stakes

for the more complex option, Ahmed was battling between his heart and his head.

His heart won out at the auction.

So three months after our first visit,

we're back to see if his head has won this time.

For starters, the front of the house has been freshened up with a lick of paint.

A new driveway's been added, and it looks like Ahmed has done

one of his big changes, with a garage conversion.

Inside, and the living room has been transformed

with soft, neutral tones and the warm feel of hardwood flooring.

The hall has been made more inviting in the same style,

as has the new room in the former garage.

And out back you can see big change number two,

because it's in this new extension that we find the real wow factor.

And wow is the right word,

with a wonderful, stylish contemporary kitchen installed.

The old dining room also leads into the extension

which has created a great space that works well for Ahmed.

This is the rear extension.

It's a three metres by seven metres width.

It's my favourite room in the house. It worked out really nice.

A newly fitted high standard kitchen with integrated appliances.

We have enough space for a dining table

and I think it's a big selling feature for this property.

And I'm glad to see that great minds think alike here,

as Ahmed has changed the upstairs layout just as I suggested,

converting the old toilet and bathroom into a bedroom.

And the boxroom has now become the new bathroom

beautifully fitted and ultra modern.

The two original bedrooms have been totally refurbished

and now just ooze style.

But in the end, it looks like Ahmed has not gone for the biggest change of all.

I haven't done the loft conversion, based on budget.

I realised the budget would increase if I went ahead with the loft conversion.

And I might not get my money back if I sell the property.

I would have loved to do it,

however, I would never have stayed with the budget.

I'm pleased to hear that, unlike at the auction,

Ahmed didn't get carried away. The results certainly speak for themselves.

He project managed with his regular team of tried and trusted builders.

But he's not afraid to get his hands dirty.

If I have time, I'm always with the builders and the workers.

I could do, more or less, pretty much everything.

For example, this house, I did all the carpentry myself.

Fitting the kitchens, tiling.

It's a cracking renovation, with a great standard of finish both inside and out.

The garden has been stripped down and tidied up

and a new patio added.

Ahmed has good reason to be very proud of the finished article.

I love it. I'm delighted with it.

It's one of those projects we worked on, not a single problem, not in the slightest.

The team were very happy to work here.

The neighbours were brilliant.

It was a wonderful project. We all loved it.

The whole project had been problem free.

In all, the renovation took Ahmed just three months.

Well within his four to six month timescale.

But how did that £40,000 loft-free budget fare?

More or less I'm with the £40,000.

I would say £45,000.

And the extra 5,000 actually went towards the kitchen.

Plus the driveway.

But then, five grand for what we've done, over that budget, I don't think is bad.

Add to that Ahmed's original purchase price

of 320,000

and his total outlay here is £365,000.

So, what do two local estate agents think of this latest addition to the property market?

The changes that have been made have been excellent.

The owner has done a great job in the finish of the kitchen,

the bathroom and the extension

and it's ideal for current families in the area.

It's been nicely renovated.

It's neutral decor, which is what everybody wants these days,

a nice open plan kitchen.

They've thought it out very well.

So, what could Ahmed get for the house?

Bearing in mind his £365,000 total investment here,

what could he sell it for?

In the current market, it could on for between £415,000 to £425,000.

It would achieve anything in the region of 440 to £450,000.

Pre-tax and expenses, those valuations could make Ahmed a handsome profit

of between 50 and 85,000.

After just four months work, that's amazing.

Yes, not bad at all. I think sort of within what I expected.

The estate agents also reckon that should Ahmed decide to let the property,

he could achieve between 1,650 and £2,100 per calendar month,

giving him a possible annual yield

of between 5.5 and 7 per cent.

Wow.

Excellent plan B!

But for now, Ahmed is sticking with plan A, selling the property on,

which, with those potential profits is tempting.

But there's also a plan C on the cards.

Ahmed has started to eye up the house as a possible home for himself and his family.

Where we live now, we have planning permission to extend the house

which will double its size.

It's a big project which could take over a year.

This house, being local to where I live in Cobham,

would be ideal for us to live temporarily till we finish the work

and then move back to Cobham again.

Today, I'm about two and a half miles from Derby city centre

in a leafy suburb which gets its name from the oak wood which originally covered the area,

part of which is now a nature reserve.

Today, I'm in the Oakwood area of Derby,

a popular suburb which grew up around the 1970s and 1980s.

As I said, very popular. Good schools, good local facilities, et cetera.

And not too far to Derby itself if that's where you happen to work.

This is the property I'm here to see.

A classic property of the era.

Two-bedroomed semi-detached.

Had a guide price of £80,000. Let's take a look.

Okey-dokey, the mock Tudor facade may not be to everyone's liking,

but it's not that bad really.

There's off street parking and a quick strim of the front lawn

would give instant kerb appeal.

Well, given the age of the property, hopefully not too many nasties to discover.

Through the front door, a little porch area. Somewhere to hang your coat.

Keep the draughts out. And then into your main living area.

Very much open plan room. Stairs up to the bedrooms there.

Pretty much white throughout, apart from this, a feature fireplace area.

I actually like that. It breaks the room up and it's reasonably pleasant.

It's in not too bad condition.

A bit of wear and tear here and there.

But one room which you could definitely spend some money on

and very sensibly too, is here in the kitchen.

For a start, the boiler's probably ready to be replaced.

The kitchen units are probably the original ones that were put in and they're showing their age.

So spend a couple of thousand here getting it up to spec.

It's a nice sized room, a door out onto the back garden,

a bit of space for a kitchen table there.

A nice family room

and definitely one I'd spend some money on.

Ah, yes, the 1980s. When this little house was built and kitted out, tastes were certainly different!

But it's light, bright and plain,

and there's a decent amount of space down here,

even if the decor is dated.

Who knows? Maybe the upstairs will be a bit more 21st century.

So, upstairs. What are we going to find?

Any surprises? Well, no.

But that whole feeling of a house that really hasn't had any major updating

since it was built carries on.

Look at the carpet. This hasn't been replaced for a while.

Slightly larger bedroom at the front, a smaller one at the back.

Bathroom. Look at that.

What colour would you call that?

Whatever, I don't think it's necessarily 2012

so a white bathroom suite in there.

Some nice tiling.

Just simple things like replace these doors.

I mean, those are not to everyone's taste.

And it's little things, it really is.

How much to re-carpet this place? Not a lot. New bathroom, new kitchen, not a lot.

To replace the doors, again,

it's tiny stuff

it would absolutely transform the initial wow factor when you walked into this house.

I really do think this property could look pretty respectable

with a little hard work.

And it wouldn't necessarily take loads of money.

Well, at the rear of the property, there's a nice enough garden.

But first of all, you've got to get to it.

You have to fight through this bush.

You might just think, "Just yank that out and that's the end of it."

The trouble is, I really don't like the way it's very close to the house.

Who knows what kind of damage that has already done

even at that height, to the foundations or the drains.

There's a drain where you can see a bit of cracking going on there.

So that's bad. Get it out.

But out here you really get the sense that this is a 1980s house

that hasn't had that updating to include things like double glazing.

So that's something to factor in to your rebuild.

But all in all, a fairly standard,

pretty easy to sort out property, I would say.

So, what did the auctioneer who sold this two-bed property think of it

with its guide price of £80,000?

First impressions are this is a typical first-time buyers property.

It was built for that purpose.

So it's probably now a bit dated, a bit tired,

and ready for a re-fit.

Well, if bought as an investment,

how easily would you be able to let this and for how much?

I think once renovated, this would have a rental value of towards £500 per calendar month.

What price could it achieve on the resale market

once brought up to standard?

These two-bedroomed semi-detached houses have a ceiling value

of probably up to £120,000.

They used to be more, when the market was better,

but that's today's price.

So a property that would make a good home or a potential buy-to-let investment.

I like the area and the house itself just needs updating and getting rid of a few bits and pieces

from the garden!

Find out who bought it when it went to auction.

Lot number 60.

Needs a bit of upgrading and improvement.

85 to start, this one?

85 I have, thank you.

At £85,000. 86.

86. 87? 87.

88.

89. 90,000. 91.

92.

The tussle for the semi continued

and we rejoin the bidding at 105,500.

£105,500.

106. 500.

107? 107.

500.

£107,500.

Once.

Twice.

Third opportunity. Any higher bid?

Sold at 107 and a half.

The final bid of £107,500

was made by full-time property developer and landlord, Martin.

Martin and his wife Julia used to be teachers, but they fell in love with property and switched careers.

I met them back at the house to find out more.

-Martin, Julia, great to meet you both.

-And you.

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

Well, we've bought a few for rental before,

so this it just adding to the others we've got.

Well done. How many have you got?

-Nine.

-Nine.

-How long has that taken you to build up?

-We've had two a while. But the last seven, we've bought in the last 12 months.

-Wow.

What was it that pushed you to make that first purchase? That's always the hardest.

We were teachers, and we wanted to get out, really.

So it was part of the escape plan!

Julia was the head of a primary school and Martin was the supply teacher.

It takes a lot of nerve to give up a secure job like teaching,

so why the change?

People have got this perception of teachers that you leave at half past three

and it's all holidays. And it's not like that.

-No.

-It's not like that at all.

And I'd been doing it for 20 years and thought, "I've got to change now

"otherwise I'll be teaching till I retire."

Let's fast forward to 2012. How many years later?

-Seven?

-Seven years later.

-And a portfolio of nine properties.

-Yes.

-Are they paying the wages?

They are. The idea is at some point we'll get the income we got from teaching.

We're not there yet, but that's the plan.

Clearly this duo have achieved high marks for property so far.

But let's see if they can do better.

What made them put this place top of the class?

-We have to admit, we hadn't looked inside it before we bought it.

-What?!

Though in our defence, we had researched the area.

-Oh, that's all right, then(!)

-We'd looked at 20 we didn't want.

There was this one and another one down the road.

It was the lot before.

And we'd looked through the window, round the back.

It wasn't much of a surprise, other than the nice chimney breast.

-Right. You read the legal pack, though?

-We did read it, yes.

And is the idea that this goes into the rental portfolio?

Yes. It's in a really good area. It's a popular rental area.

We're not daft enough to buy any old property without looking in.

We did research the area and - sounds lame - we knew this was a good area for rental.

OK. Still not going to let you off, but...

Detention for both of them. But at least they did do their homework on the area.

The couple are keen to crack on

and are giving themselves two to three months

to get the property ready for the rental market.

Talk me through what you're going to do to his place to sort it out.

New carpets, new kitchen, new bathroom.

Take the water tank out of the airing cupboard

and replace the boiler with a combi-boiler.

-Redecorate. New windows. Sort the garden out.

-Right.

Not quite sure about that.

There's various plans ranging from leaving it

to digging it out and replastering it.

OK. How much of the work do you do yourself?

On this, it shouldn't be too bad. Painting and decorating and things like that.

-What about kitchen and bathroom fitting?

-We'll do that, yep.

-OK. So that can keep the costs down.

-Yeah, it helps to keep costs down.

The overall budget for the work?

-We think 7,500 should be enough.

-Yeah.

-Good luck with it. Congratulations.

-Thank you.

-Look forward to seeing how you go on.

-Thank you.

Well, Martin and Julia are breaking the cardinal rule

and not looking at this place before they bought it.

However, I think they have done OK

and it will fit in well with their expanding property portfolio.

And it just goes to show

if you're committed to it, you can make it happen.

Think about it.

Join us later in the show to find out how they got on.

It's been a while now since we last saw those properties.

Has all the time and money been well spent?

Let's go back and find out.

It's back now to the Tyne and Wear area and the town of Jarrow

where we first met Paul, a landlord and property developer

and his wife Angie, a staff nurse.

Together since 2005,

they've built up a rental portfolio of 20 properties.

Now they've added another.

This two-bed ground floor flat

which they bought for 24,500.

It's the fifth property they own on this very street.

Paul has a bigger picture in mind when it comes to the renovation involved.

-I'm actually from this area.

-Right.

-Being born and bred on this estate

-has made a big difference to why we want to put something back into the area.

-Right.

It's great that Paul and Angie want to put something back into the area.

This place certainly needed help

because despite its spaciousness, there were serious damp issues to contend with.

Plus the possibility of woodworm lurking under the floorboards.

Paul reckoned that a £12,000 budget with a £2,000 contingency fund

and a six to eight week timescale should do the job.

Just six weeks later,

and the front of the house has had a bit of a facelift

with a new front door and double-glazed windows.

and inside, as expected, there's been some major replastering

with the front bedroom undergoing a refurbishment

which, by the look of it, is still drying out.

It's the same story for the second bedroom down the hall.

And the main living room has also had the same treatment.

There's a new kitchen installed at the rear of the house

ready and waiting for some cooking to get underway.

The bathroom has been gutted and a new suite fitted.

It looks like a solid renovation,

which is more than can be said for the state of the original plasterwork.

It was found out that the original damp course had been faulty.

There weren't the correct coatings

and the walls were packed out with plasterboard

which is a total no-no.

So we've done it correctly.

Well, that was one problem solved.

But there were also rotten joists under the floorboards

which needed replacing

and all the timbers treated for woodworm.

And that wasn't the end of the headaches.

With this chimneybreast, we had to completely take it down,

acro the remaining build-up and then have new brickwork installed

from floor level right the way up the wall.

We then dressed it up by plastering over.

We also inserted the electric fire at that particular time

as well as the new electrics wall-mounted TVs.

The flat was gutted and totally renovated right from the original brickwork

straight through to the decoration.

Angie reckons it's now ready for business.

I think Paul's done an absolutely amazing job with it.

He spent an awful lot of time and hard work doing it

and getting it up to scratch.

Still got a bit left to do, obviously,

but he's done really well.

This renovation has been extremely challenging throughout.

The first few weeks was fine, everything was going according to plan.

Then after the accident, that's when things became a bit hard.

We decided to do all these internal walls and the ceilings

and a lot of the joists needed to be trimmed down.

The equipment needed to do that I was unfamiliar with.

I didn't sit down and read the book and set up the equipment correctly.

And lo and behold, the second piece of wood and a brand new piece of equipment

and it took my thumb straight off.

Blimey! While we often focus on the fiscal risks in property,

we do also need to remind ourselves

that there are physical risks involved, too.

Building sites are dangerous places.

Fortunately, Paul's injury is healing well,

but with Angie away on a nursing course at the university,

it meant he had to bring in help to get the place completed.

Once the plaster is dry, Paul can finish painting and get the electrics checked

by a professional.

Then his new tenant, who's waiting in the wings, is all ready to move in.

In fact, they've got to this stage in just five weeks,

so that's pretty impressive, given all the difficulties.

But what about their budget of £12,000

with the £2,000 contingency?

It ended up at a total of £14,256, I believe.

That's the final tally on this build.

Slightly over. We did use the contingency

mainly to employ extra labour.

Paul's spend of £14,256

takes his total outlay here to just under 39,000.

We asked along two local property experts

including the estate agent who saw it previously,

to take a look at the place now.

I think it looks wonderfully spacious.

I think the use of colours, keeping the walls light,

floors light, I think works wonderfully well.

The high ceilings give that feeling of space.

You wouldn't think you were in a ground floor flat.

It has the feel of a much larger home.

My overall impression of the property is it's done to a good standard.

Nice finish. Modern and contemporary throughout.

But will the refurbishment benefit Paul and Angie's bank account?

They already have a tenant lined up for the flat.

But after spending just under £39,000 here,

have they managed to get the best rental return?

This property I would expect to achieve £495 per calendar month for rent.

On the rental market it should achieve at least £450 per calendar month on an unfurnished basis,

up to £495 per calendar month on a furnished basis.

I'm well pleased with the rental valuations.

We have actually achieved in excess of that.

We've rented this out at £500 per calendar month.

That rental return earns Paul and Angie a whopping annual yield

of 15.5 per cent.

The estate agents reckon a resale

could achieve between 60 and 65,000,

which would mean a possible profit for them of between 21 and £26,000

minus the usual tax and expenses.

So the couple now have another successful property on their portfolio,

ready to earn its keep.

But also important to them are their own efforts to revitalise the local area.

We are getting there. It's going to be a slow process.

There are a lot of houses out there that do need to be updated, renovated, and presentable.

And to be somewhere nice to live.

We're only one person in the market.

It takes time, but we're getting there.

Back now to this two-bed semi in the Oakwood area of Derby,

which was snapped up at auction for £107,500

by husband and wife team Martin and Julia.

They've been doing up and renting out property for the last seven years

after ringing the bell on their teaching careers.

People have this perception of teachers that you leave at half past three

and it's all holidays, and it's not like that.

-Course not.

-Not like that at all.

I'd been doing it for 20 years.

I thought, "I can't sustain this any more", and I wanted to get out.

So it was part of the escape plan.

The couple set themselves a two to three month timescale

and a budget of 7,500 to get the property ready for the rental market.

And bang on schedule, we're back to see what we can learn from these former teachers.

Gold stars all round, I reckon. It hasn't taken them long,

but Martin and Julia have achieved a tremendous amount since we were last here.

We had to gut the place first

and once we'd done that, we could see what we'd let ourselves in for

and what we'd got to do.

We ripped out the old bathroom, the kitchen went.

The boiler went. New windows.

Garden, carpets, that's it, I think, isn't it?

Think so.

Oh, the chimneybreast. We took the chimneybreast out.

Ah, yes, the old chimneybreast.

Talk us through that one, Julia.

Originally, there was a brick fireplace, floor to ceiling.

So we decided to take it down, which was quite difficult

cos the bricks were welded to the wall.

Then part of the ceiling was missing when we'd got it down.

So we had to replaster the ceiling, put new coving on.

I had the wall replastered and then we decided to wallpaper it

because the room was very bland.

And we bought this more contemporary fireplace.

We're pleased with it in the end.

And fired up by that, Martin gets an A-plus

for ringing the changes in the kitchen

without going crazy on the cash.

Really pleased with the kitchen.

It didn't come in too badly.

It cost us £700 altogether for the whole kitchen.

The only thing extra was the cooker.

But it's come out really nicely.

We picked the units to make them a lot more contemporary

to try and match the style of the house now.

Especially now the windows haven't got the leads on.

I put the kitchen together myself. It was quite a lot of hard work.

But it's turned out nicely, I think.

I have to agree with you there, Martin.

There are only a couple of finishing touches to do.

The couple are well within their two to three month timescale.

But what about their budget?

I originally said we'd spend about 7,500 to 8,000.

I think we came in with about 8,000, didn't we?

So the main expenses have been the windows,

the kitchen.

Put a combi boiler in. That was it, really.

Oh, a new bathroom suite.

-And we've done most of the work ourselves, haven't we?

-Yeah.

An £8,000 spend brings their total outlay here

to £115,500.

We asked two local property experts, including the auctioneer who sold it,

for their thoughts on this renovation.

This property is a perfect example or a property ready to move into

for let or for sale.

It's clean, it's tidy. It looks good.

It's appealing, it's fresh.

I'm glad to see what they've done to the back garden.

It really was a wilderness the first time I saw it.

They've tamed it extremely well.

The experts think the property would sell for between 115 and 120,000,

which, when you factor in tax and expenses,

could actually mean a loss for Martin and Julia

if they sold now.

But they are in this for the long term

and are purely interested in rental valuations.

Rental value is 475 to £500 per calendar month.

It should achieve around £495 per calendar month.

It's about what we thought. We thought around 495.

We've got other houses in different areas that rent out at that rate.

Yeah.

An income of £495 per month

would result in a yield of around five per cent,

which is respectable.

So, are Martin and Julia happy with what they've achieved here?

Yeah, I think so.

It's been a lot of hard work.

We could do with a rest. But we'll just let it now, won't we, and move on to the next.

We hope you've enjoyed watching Homes under the Hammer

and learnt some useful lessons along the way!

Join us next time for more hot properties, and maybe some a little more lukewarm!

-See you next time.

-Goodbye.

-Goodbye!

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