Episode 80 Homes Under the Hammer

Hello, now people get involved in buying property

for all sorts of different reasons,

either as a place to live in or work in, or to rent out or sell.

But the main concern is getting value for money.

Now, how do you go about doing that?

Well, maybe buying your next home under the hammer.

Now, you do need to do your homework before you buy at auction.

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

So here are the potential money-spinners that went

under the hammer on today's show.

This purchase in Deal, Kent, proved a big surprise for our buyer.

And when I got it, I couldn't believe it.

In Crewe, this huge terrace surprises me.

Head upstairs and you suddenly get a lightning bolt.

While in Derby,

the best reason I've heard yet for getting into the property game.

It's made me feel young again, something to get up for.

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.

# It's a done deal... #

This is Deal in Kent, just eight miles from Dover

and the south coast. And what a beautiful spot it is, too.

Miles of beach, a castle, narrow winding shopping streets,

just lovely.

And I reckon, if you are after traditional seaside charm

with a boutiquey vibe, then Deal is your destination.

Deal does seem, well, ideal.

So, how long would it take to paddle from here

to today's property opportunity?

50 seconds.

Yep, that's right, you can walk

from the beach to the property I'm here to see in under a minute.

Which is amazing!

And the property itself, well, it is a three bedroom maisonette,

and it had a guide price of £85,000.

This maisonette is on the first

and second floor of this bay-fronted period property.

First things first, this place feels huge. It is huge! Wow!

It's incredibly dated. Look, there is woodchip wallpaper for days.

This will take you for ever to get off but it will be a worthwhile job.

The kitchen towards the back, again, that will need to be ripped out.

You have got a little bathroom through here.

I'm just wondering whether you have got any nice spindles here.

So far, all the character has been stripped out of this place.

Nice big room, you could have it as a bedroom, living room,

not quite sure what you would do with it.

You have the stairs leading to the upper floor and wow,

look at this room!

At the front of the property it's really sunny and bright

and on a day like today, it really is fantastic.

It would be great for entertaining.

Look at this amazing bay window, although on closer inspection,

you might want to get that refurbished.

Check that out, a seaside view, marvellous.

Well, the kitchen is tiny but there is room for a reconfiguration.

And as a major bonus in a seaside location, it is a bright

and sunny flat.

# Everybody loves the sunshine...#

I think this property has lots of potential

if this floor is anything to go by.

So what about upstairs?

I do love this maisonette but upstairs,

it does get less exciting, and again,

I know I keep going on about woodchip wallpaper,

but it is everywhere and it will be a big old exercise to get off.

Not a bad master bedroom. Again, needs a bit of work.

It gets worse as you go on. The blue room through here is very eaved.

Lots of wallpaper falling on the floor

so I would want to inspect the roof space.

And the beigey room, well, very small.

So you do have three bedrooms but they all need work,

so whoever takes this on better have their cheque-book handy.

And one of the things I would splash the cash on is an upstairs bathroom.

You could also tweak the layout.

That kitchen is quite small for such a large property.

Maybe it could be moved into the bigger downstairs room.

But really, that's all a lifestyle and a budget decision.

The property is in a great location,

so you wouldn't miss the absence of a garden.

I think there's a lot going for it at that guide price of 85,000.

Did a local estate agent agree?

It is in a basic state of repair.

But offers larger than average accommodation than most other

maisonettes or flats in this area.

What value would he put on this after a refurbishment?

With a decent refurbishment and updating,

I would estimate a value between 150 and £160,000.

Wow!

So if you were able to get it at anything like the guide price,

there could be a significant profit to be made,

even after refurbishment costs.

Would it be a good buy-to-let investment?

Could it achieve a decent rental?

I would anticipate in the region of £650 per calendar month.

On a sunny day, it is so easy to get carried away

and just fall in love with a property by the seaside.

But in this instance, it makes sound business sense, too.

Let's see who else fell for this one at the auction.

Good-looking property. It is a large maisonette.

Three bedrooms, needs some improvement.

But close to the seafront and good for the town centre as well.

I guess we would like to start at £85,000.

Where'd you want to start me? Ever the optimist.

Where are you going to start me?

85 I've got, straight in, £85,000, to the lady at the back.

At 85,000, at 85. Now 90. At 90.

I've got a bid of £85,000 from the lady

sitting at the back on the aisle, at £85,000 I've got then.

Maiden bidder. £85,000 sitting at the back for the first time.

If there's no other bids? It would be a good buy at £85,000 or 88.

-Second time that 85...

-86.

-86,000, you heard his voice. £86,000. 87 now?

At 87. And eight. 88.

At 89,000 I'm waiting.

At £88,000, standing then by the entrance, 89 it's against you.

If you're done, for the first time at £88,000? She's not, 89. Make it 90?

At £89,000, it is back with you, then for the first time,

second time at £89,000...

Third and final time at 89,000, sold. £89,000.

And the bidder with the red hat on is Mary.

# Show me Mary

# How does it go?

# Show me Mary

# Show me Mary...#

Mary is a retired housekeeper from London, where she currently lives

in a rental property and she has bought this maisonette for £89,000.

That's only 4,000 over the guide price.

Well, I said this was a business opportunity.

I wanted to find out from Mary if that is what made her come to Deal.

-Mary, congratulations.

-Thank you.

-You got a deal here.

I mean, it is amazing that this was not that much over the guide price.

-No.

-Was it just a lucky streak, do you think, on the day?

I think so.

I mean, when I looked at this place, I fell in love with it straightaway.

To be honest, I didn't think I'd get it.

I said, "oh, no, there'll be so many people after it, it's hopeless."

-And when I got it I couldn't believe it.

-What about the price?

I think it is quite good for the money.

I know things to be done

but when you go to auction that is what you go for because it's cheaper!

You sound like a lady that has experience.

-Have you ever done anything like this before?

-Oh, yes.

Years ago I bought out some small places and I sold them,

made a profit. And I got a place in London.

And I only got it wallpapered.

And the floor done and I did the kitchen,

and I sold it on for a good profit.

Mary got started by selling her own home in Forest Gate,

London, which she originally bought in 1977 for £9,000. Blimey!

As we speak, Mary owns and rents six properties in different

parts of Kent, so what are her plans for number seven?

I would probably let it out.

Eventually, I'll sell it but I will let it out first,

maybe move in to it.

Obviously, it does need a bit of work, does that put you off?

-Most people would run a mile.

-No, no, it is a challenge.

It's exciting.

You see what it is like now, and what it is going to look like.

Have you got a vision in your mind of what this place is going

-to look like?

-Oh, yes. It will be a lovely new kitchen,

a new shower, new carpets.

What sort of budget have you put aside for a job like this?

-Maybe 10 to 15,000.

-Really?

-Do you think you will get it done for 15 grand?

-I hope so.

Mary plans to finance the project through the rentals

she collects from her other properties.

She has estimated a time frame of just two months to complete

the work. But where to begin?

I think the walls first, before anything else.

The kitchen then the bathroom.

I'll leave the carpets last.

Now you have got a very small kitchen in a very big maisonette.

Are you just going to have to live with that or you could

think about relocating the kitchen?

No, I think I'll keep the kitchen but they are very good,

when they put in new kitchens nowadays, they can do anything.

They can make they can make it much more spacious looking, really.

Mary certainly knows her own mind and as cool as a cucumber.

She plans to source local tradesmen to do the work

and will visit from time to time.

Is there nothing that concerns Mary?

You don't seem fazed by any of this or stressed at all.

-No, no, I just love property.

-What is it about property you love so much?

It's a challenge.

It's an interest.

Mary, congratulations, good luck with this project.

Thank you very much.

Well, Mary has got a cracking deal here in Deal, and I'm sure

with her experience, she will get it sorted out in no time at all.

You can find out how it goes later in the show.

I'm in Crewe in Cheshire, a town with lots of railways and trains

passing through, literally linking North, South, East and West.

But interestingly, it was 1837 when the first railway junction

was built, but the town itself wasn't built until six years later.

So this is strangely a town that was named after the railway

rather than the other way round.

Things are looking up in Crewe with a recent regeneration programme

helping to boost the town.

But rolling stock is still prepared and maintained here so the

railway continues even today to be an important element in the economy.

Well, with the expansion of the railways came an inevitable

property boom. With some very fine houses built around that time.

And arriving on time at the auction, was this place.

It is on this fairly busy road which isn't ideal,

but the house itself looks pretty impressive.

£65,000 was the guide price, three bedrooms with room up top,

let's take a look.

Now, that's interesting.

Not that sort of imposing from the outside, but the moment you

walk through the front door,

a few hints of what might be in store, because whenever you

see lovely ceramic work like this, and I know we are near the

Potteries here, but it's still the upper end of the housing market in

its day, that would have been fitted out like that, so that's great.

And lots of lovely little features.

The fact that they've gone to the trouble on these bits of plasterwork

to have a face on both sides, you know, this is really exciting.

I wonder what's hidden behind some of the modern stuff that's

been put up? What have we got?

Basically, a big entrance hall area here.

Front room there, a really good size.

Bit of an odd little space under the stairs there.

Heading through the property into a really nice-sized rear lounge.

Big ceilings.

I'm just a bit confused because odd stuff like this catches my eye!

Why is there a window there?

It is throwing light into that strange area under the stairs.

Modern fireplace, that's a bit of a shame, put something else there.

But lots of light in here, partly due to that big window

and then that very strange sort of, roof light, not really a roof light,

an odd window thing. I say I'm a bit confused

because I've never seen anything like that before.

But it does throw loads light into this room.

And then carrying on through, a really nice-sized kitchen area.

Who'd have thought it from the outside, eh?

In its time, this house might have been occupied by someone with

a reasonable rank in the railways. Possibly even with live-in servants.

So that could explain the original features and the light and space.

# Can't you see what's wrong with the world ain't me

# Ain't nothing like it used to be

# Ain't nothing like it once was

# Ain't nothing like it ought to be

# Nothing right no more... #

It is a shame we don't build them like this any more.

Head upstairs and you suddenly get a lightning bolt of realisation,

of the potential of this place.

Cos you've got the staircase there,

you've got access to some attic space up there.

That could be a bedroom if you had the right building regulations

and things sorted out for it. The corridor goes down there.

You've got bathroom, more bedrooms, another bedroom here

and so you start thinking about this, as not just a house,

there's possible flats, possible house of multiple occupation...

Erm, yeah. Whoa-hoo-hoo!

It's sad to think the days of these big family houses are gone,

but they are very adaptable to how we live now.

With some good planning and decent renovations, so far, I'm thinking

this could be a very profitable lot, or have I spoken too soon?

Whoa. That's not good.

Here in the front bedroom, just look at that skirting board.

I think that's been cut in the middle to allow for what is

clearly a potentially quite serious sagging of this part of the house.

I don't know, somebody has obviously pulled these floorboards up already.

The same concerns as me perhaps.

Erm, my guess is that a bit of water ingress,

maybe the joists here have sunk in the wall.

Whatever happens, you've got to sort this out, because at the moment,

this whole floor dips quite severely to this point in the room.

Not ideal.

'I think it's always wise to get surveys done

'before you plunge into bidding.

'But in this case I would absolutely definitely get a structural survey,

'just to ensure this house isn't going to be sliding

'even closer to that busy street than it is already.

'Personally, I prefer this place

'the further you get away from the front.'

Well, at the rear of the property,

you've got this really good sized rear yard,

beautiful forest flame there, and this little shed area.

I mean, it's good. If that was it, you know, I'd be fairly pleased.

But, no, there's a lot more, because out of the rear gate

and you've suddenly got this huge great area, including a garage.

Fantastic for parking and, well, I don't know, d'you reckon you could

maybe apply for planning permission for another house on here?

It suddenly opens up the potential for this place massively!

'This is a lot of property, a lot of garden,

'and a lot of opportunity for that guide price of £65,000.

'What does a local estate agent think?'

It's a very spacious property, nice high ceilings,

and it's got large reception rooms.

There's lots of potential for the property to, uh,

you could either convert and split into two apartments for an investor

or do the property up and rent it out.

'It seems unlikely as the preferred option,

'but what if this house was to be kept as a family home and renovated?

'What would it fetch on the market?'

We would look to market the property at around £105-£110,000.

'And what about the rental returns?'

If the property was rented,

I would say you would be looking £550 to £575 per calendar month.

So it really is property that just keeps on giving,

a great little opportunity for someone, and I just hope that

whoever takes it on keeps the forest flame, one of my favourite plants.

Let's go to the auction and see who bought it.

'We join the auction for this lot late in the day.'

Lot 78, so, what's this?

60 to start?

55, then?

55 bid, thank you.

At £55,000.

60 can I say now?

60, lady's bid seated.

At £60,000. 65?

£65,000. 70?

£70,000 seated. 75?

D'you want to go one?

71.

72? 72, half.

72,500.

73. No?

That's 73,000, your bid, madam, at £73,000.

Another 500 anywhere else?

If not, £73,000 for the first time.

£73,000 for the second time.

Third and final time, £73,000.

HE BANGS GAVEL You bought it, well done.

'And that successful bidder getting the lot for £73,000 was Amy,

'who was there with her father, Peter, a former builder.

'Amy, at the tender age of five, used to go to the auctions,

'and has been inspired by her father to make property her career.

'She bought her first property when she was 19, and she's now an

'estate agent as well as buying and managing properties for clients.'

-Amy, great to meet you.

-Great to meet you too.

-Congratulations.

-Thank you.

-Why do you want to buy the place?

Well, we bought it on behalf of an investor purely for a job

specifically here in Crewe for social services,

so it's a type of sheltered accommodation.

Wow, what a worthwhile project.

Explain your involvement in this, then?

I'm a property consultant

and I am in charge of the investment on behalf of an investor client.

So the investor client wants to put some money into property

but wants something interesting to do with it.

I find the client, find the property,

pull the job together and set up the contract of let.

And for an investor, they get what?

The investor gets a whopping yield,

so he produces a property which is fairly unusual for area,

so this building, if we converted it, would be worth, say, 90,000.

But we're going to spend a little bit more.

So it's a fair risk in terms of we're spending more to be able to

house those specific requirements.

So the contract is already put in place for the let,

we've already agreed the spec of the property,

so it's produced for that job, and the yield therefore is much higher.

In terms of return, then, on investment, what will that be?

-About 20% yield, the property.

-20%?!

SHE LAUGHS Yes!

-Yeah.

-Wow! So, this building and all the investment

-will be paid back in five years?

-It should be.

Is that because of the rents that can be commanded,

given the extra facilities you're putting in are higher?

That's right, yeah. Given the type of client,

and the risks involved with it,

the specific requirements they need on the property,

it's paid per room, so we're able to get a much higher yield.

'This sounds like a really worthwhile sort of investment.

'The people who will move in will be given the chance to lead

'an independent life for the first time, but with the support

'they need, and at the same time, it's a good business opportunity.'

So the investor has to buy the property in the first place.

-That's right.

-And then pay for the refurbishment.

-That's correct.

But then...and you mastermind the whole thing, or...?

Absolutely, so I'd see it from start to finish.

So why this house particularly, then?

Its size and its location, so we'd look for somewhere

that's on a busy road so they can get about into town on buses, etc.

And we've got a precedent here of flats and shared houses in the area.

'But before this house can start serving its worthwhile purpose,

'it needs a good overhaul.

'With her experience in creating these types of homes,

'Amy hopes to have it ready in four to six months,

'and though there's a few structural issues to contend with,

'reckons a budget of £50,000 should be enough to renovate

'the place to the standard required.'

We're going to do an awful lot in here but that's the best thing.

If we find something that we can get back to a shell very quickly,

we can really give it a redesign.

So we'll be moving the kitchen, create a social area, moving

all the bathrooms, we'll be placing en suites through all the bedrooms.

New plastering, new electrics, new plumbing, new windows.

We're insulating the building

because the bills will be inclusive in the tenancy.

-Right.

-So, landlord's paying the bills.

We obviously need to be able to keep it really warm

for the particular type of client that we're talking about.

So we're doing extra jobs

in order to prevent bills in future, as well as those now.

Right, and it will end up being how many bed,

or how many sort of self-contained bed, if you like, rooms?

We should have five self-contained rooms in this building.

One for the carer and four for those that are learning.

Well, listen, congratulations.

It sounds like a very good win-win situation all round,

and, er, look forward to seeing how you get on.

Thank you very much.

Well, what a great story.

Who would have thought this fairly unassuming

but big once you get inside property in Crewe

could end up being put to such a good use,

and deliver some lucky investor one of the biggest returns

I've come across in quite a while.

Still, work to be done before we get to that point.

You can find out how it goes later in the show.

Later on, in Derby, well...

I couldn't have said it better myself.

If it makes a profit, he's done a fantastic job.

If you're losing money, he's an idiot!

And back in Crewe, Amy has reached her limit.

The budget is over, we've blown the budget.

What could be better than to be beside the seaside in a light

and airy place with a sea view?

Well, that's what we found

when, earlier, in the coastal town of Deal in Kent,

we saw this three-bed maisonette that was just seconds away

from the seafront and with a sea view from its bay window.

The first floor definitely had a touch of charm about it.

Unfortunately, the top floor was more "ugh".

It was bought at auction for 89,000 by Mary, a retired

housekeeper from London who was surprised to land the property.

-So was it just a lucky streak, do you think, on the day?

-I think so.

I mean, when I looked at this place, I fell in love with it straightaway.

To be honest, I didn't think I'd get it.

I said, "Oh, no, there'll be so many people after it. It's hopeless."

And when I got it, I couldn't believe it!

So smitten was Mary with the maisonette,

she was even contemplating moving in.

But the first two floors needed to be spruced up and revitalised,

and Mary had 10,000 to 15,000 to spend on what she hoped

would be a two-month renovation job.

But it was eight months later we caught up with Mary to find out

if her place in Deal was now ideal.

The front room, with that lovely, big bay window,

is certainly looking good. And to help the place feel more homely,

Mary's placed some items of furniture that certainly add

a touch of class to the surroundings.

Next door, the second reception room has been redecorated with

brand-new carpet.

At the rear of the maisonette, the old shower room has been

replaced with brand-new units and new wall and floor tiles.

But it's the kitchen that has had the major overhaul.

With contemporary new units and tasteful tiling, it was,

for Mary, the most crucial aspect to renovating this maisonette.

When I saw it, it was in a terrible state.

It must have been about 40, 50 years old.

I knew it was a complete write-off. It was horrible, and the windows...!

But I was determined it was going to get done. And it did in the end.

It's a nice place in which to rattle those pots and pans

and cook up a scrummy meal.

Upstairs, the three bedrooms have been redecorated, all in soft,

neutral colours that can look good when bathed in sunlight.

So the maisonette make over is now complete.

The electrics were up to scratch, so no rewiring was necessary.

But several walls needed replastering, and some still had on

that dreaded woodchip wallpaper for Mary's builder to contend with.

The horrible woodchip, it all had to come off.

And I even came back once and watched him.

And what a job they have to do to get it all together!

Ooh, I wouldn't like to do it, I tell you.

Neither would I, Mary, neither would I!

Stripping woodchip wallpaper is one of the worst jobs

when renovating and, more importantly, it's so time-consuming.

But surely that didn't account for the six-month overrun?

I had to get permission to get the place done as it was a leasehold.

And, unfortunately, it took about two months to go through.

I was nearly giving up, but I got the permission in the end.

It took longer even to get the right builder.

I went through quite a few builders, you know, giving quotes

and different things, until I got this one.

And luckily enough, he did everything.

And Mary's verdict on the final result?

I am really delighted with the place now. I think it's fantastic.

And to get that pleased look from Mary,

it took more than she expected,

with her original budget of 10,000-15,000 pushed to £17,000.

With her purchase price of 89,000,

that would take her total spend to £106,000.

And while overspending on the budget is no-one's cup of tea,

the location here certainly makes up for any downsides.

Oh, it's the coast. I've got a thing about the coast.

I've always liked water. I just love...

I mean, I'm born under Pisces, the fish, if you believe in it,

but I've always had a thing with water, you know.

One drawback is that the salty sea air from the seaside

sometimes can play havoc with the paintwork, and Mary does plan

to get permission from the leaseholder to get it seen to.

But after all this time, has Mary come to a decision about

what to do with the maisonette - to let, to sell or move in?

Mary?

Well, I'm going to let it first and then just play it by ear.

You know, along the way,

if property prices go up in the next couple of years,

I may sell it on or move in myself.

Mary is really pleased with the maisonette

and she's keeping her options open.

A smart move in a very uncertain market.

What do two local estate agents make of her £106,000 investment?

Starting with the agent who saw the maisonette before the renovation.

The property has been updated

in a neutral colour and format

which is well-suited to the property, making it light and airy.

This is a nice-sized apartment. It's all very tidily decorated.

You've got nice, high ceilings. There's a lot of space here.

But, could the layout here have been improved?

Whilst the maisonette offers substantial accommodation,

I would consider a second bathroom or shower room would have better use

of the space to the top floor.

If it were mine, I'd have adapted the layout

slightly differently and probably made it two bedrooms

and put a bathroom and maybe an en-suite upstairs.

What rental returns can Mary now get for her spruced up apartment?

I think if this property were let now in the current market,

it would have a rental value of about £650 per calendar month.

I would recommend a rental value in the region of £650 to £675

per calendar month.

If I can get even 650, 680, that would be good.

If either those valuations could be met,

then Mary would get a healthy annual yield of around 7.5%.

But having spent £106,000 on the maisonette,

what sort of resale value could Mary achieve?

I think the value of selling this one now is going to be

something in the order of £140,000 to £145,000.

I would consider a market value for this property in the region of £150,000.

If Mary could get either of those figures,

then she could stand to make a pre-tax profit of 34,000-44,000.

Oh, that's not bad. Not bad at all.

So it's another successful addition for Mary's portfolio,

but even now, she's got no intention of putting her feet up and relaxing.

When I'm selling the property, then I'm going to use the money to

buy another property at auction and see if I can get that done up.

See what... See what I can make out of it. I mean, any...

Even 15, 20 grand is OK without killing yourself, isn't it?

Derby, with a population of just under a quarter of a million,

is a thriving city.

With a history of local manufacturing,

it has been key since the Industrial Revolution.

The property I am here to see is just a mile-and-a-half south

of the city centre.

A two-bedroomed, ex-local authority property which, according to the

auction catalogue, requires a scheme of renovation and improvement.

That could explain the relatively low guide price of £30,000 plus.

Now, of course, renovation

and improvement can mean a whole lot of different things to

a whole lot of different people, from a quick lick of paint to

knocking down walls and taking out fireplaces.

And it comes back down to that old question that you have to start out with -

"Why am I doing this renovation? Is it for me to live in?"

In which case, go for it and do whatever you want.

Or is it a property which I'm going to rent out or sell on?

In which case, you have to think about how much you'll spend.

So, with that in mind, what are we going to do here?

Again, it starts, "Are we going to rent it or live in it?"

So let's assume we're going to do the middle ground.

We're going to maybe live in it, maybe rent it,

so we want to get it just nice.

First thing I'd say is strip the floorboards back. I like those.

That would be beautiful.

Um, you're going to have to do something with the roof,

but the layout is quite nice.

Basically, large living room here and then through to the kitchen.

You could contemplate taking out this wall here to create

a real nice, open-plan living space, which would be quite pleasant.

The kitchen itself, whatever you do, is going

to need total refurbishment.

Um, uh-oh! As will the electrics, by the look of it.

Of course, that's something you need to be looking at

when you come to see a property.

Look to find where the electric board is.

Old, cartridge-type fuses with a bit of fuse wire in them,

that indicates the whole thing is going to have to be ripped out and replaced.

But, doing the renovation, you'll probably want to do that anyway.

At least you'll know the house is then sorted.

One thing I don't notice down here is a loo, which is good news,

because it means it's upstairs. Fantastic.

And, yes indeed, there it is - complete with a fine example

of that great bathroom favourite, an avocado suite.

So, a completely new refit is needed here, I think,

to bring it up to modern standards.

The bedrooms are both a good size,

although when you have installed your new central heating,

you could get rid of that hot water tank and make this room even bigger.

And the garden has space in spades.

The only slight issue is, only half of it's yours.

At the moment, it's very sort of communal.

Either you think about keeping it like this,

if you get on with the neighbours, or you put a fence in here.

Other than that, it needs a bit of tidying up.

Useful little old air raid shelter there, which you can store stuff in.

But what I'm much more interested in is this.

It's basically access to an outside loo. At the moment,

you can't actually get in there because it's full of stuff.

Now, much as I love outdoor loos, I think that space

could be much better utilised in the kitchen.

So, basically, knock down that internal wall,

open up the kitchen, that'd be great.

Other than that, just a few hours with a Strimmer

and a hedge trimmer and you'd be well set.

It's an overall modernisation, then, but then again, if this

is going to be a rental project or a quick resale, it's important to

work out costs beforehand and factor them into the potential end value.

Let's find out what a local property expert thinks about this house.

The whole house needs a complete refurbishment scheme

from electrics to plumbing, probably for some damp-proofing.

So you're replastering, putting a new kitchen, a new bathroom in it,

you're putting a central heating system in it.

The list is endless, really.

Because it's a local authority-built house,

it's actually quite utilitarian and quite spartan.

On the other hand, it's solid and it's well-built,

so you've actually got quite a lot of potential here.

The big question is, with a guide price of £30,000, is it worth

spending a lot on refurbishing this house for sale or rental?

Once renovated, this would have a value, in this location,

of probably no more than about £75,000.

In terms of rental value,

you would rent this out all day long at £475 a calendar month.

Hmm! Well, a bit of renovation required indeed with this one but,

intrinsically, a good house.

So, let's see who fancied it when it went under the hammer.

Lot number one is in the Cavendish area of the city.

It's a two-bedroomed town house.

Would somebody like to start me at 25,000? 25,000 for it.

Who's got 20 to start me? Thank you, sir. £20,000 is the opening bid.

21 somewhere?

21 I've got at the back. 22 is bid.

23, 24, 24, 25, the lady has bid.

26,000, 27 is bid.

28 I've got.

£29,000. 30 is bid here.

At 30,000... 31...

'Plenty of interest for this one, then,

'and bidding continued at a fair old pace in £1,000 increments

'until it reached £46,000, which is where we rejoin it.'

£46,000, I'll take five...

46,500, 47,

47,500, 48,

48,500, 49,000,

49,500, 50,000...

£50,000... 500, 51 is bid.

£51,000, 500 elsewhere?

At 51,000, it goes for the first time, for the second time...

500, 52.

At 52,000... At five again?

500, 53, 53,000.

Definite? £53,000, going once, going twice, third time...

Yours, sir, well done. 53,000, thank you.

Well, that was a frantic auction, but the man who got it

when the gavel finally fell was retired civil engineer, Pat.

Pat retired four years ago

and he bought this property with an eye to enhancing his pension.

He came to meet me back at the house with his eldest son,

also called Pat.

-Pat, Pat...

-Yeah.

-..great to meet you both.

Tell me why you wanted to buy this place.

I was bored out of me face sitting at home,

because I retired two or three years ago,

and I bought a caravan in Skegness, I've still got it

and I'm still bored, so I thought I'd go and buy a house and do it up.

Right, so the money side of things didn't come into it?

-The money side, I obviously do want a profit.

-Right.

I haven't done it to lose, but if I break even, I'd be still happy.

Right. And what's your involvement going to be?

He's going to replaster, rewire, plumb radiators,

-and then they're getting the blokes in to redecorate...

-Right.

..skirting boards and everything like that.

-So whose house is it going to be?

-My dad's. It's yours?

-Mm-hmm.

-Fantastic.

With a view to renting it out, or selling it on?

No. If it's successful, I'll want to sell it straightaway.

I'm going to put it on the market for two months,

and if it doesn't sell, it's going back to the auction.

-Right.

-With a reserve on.

Buying a house because you're bored is something I've heard before.

But their devil-may-care attitude about being happy

if he breaks even is definitely a new one on me!

What do you think about what your dad's up to?

If it makes a profit, he's done a fantastic job. If you're losing money, he's an idiot.

But can't you convince him to, like, take a bit more of a leisurely life, kind of thing?

-He's a young 69-year-old.

-Right.

-68.

-Well, I nearly said... 69 soon!

But you can't tell him. You can't tell him what to do.

-He does his own thing, he always has done.

-Right.

But surely there are less stressful ways of keeping busy.

What about, like, hobbies like golf or... You know?

-I don't want to be playing golf.

-No?

It's not my sort of hobby, no, definitely not.

Walking in the countryside?

-I do a lot of walking, still, but I'm still bored.

-Gardening?

I bought a caravan, I go to clubs in Skegness, which is fantastic.

-Like nightclub-type places?

-Yeah, yeah...

-An entertainment club, yeah.

-Your dad's a raver, is he?

-Yeah, bit of a raver.

-He has done all his life!

-Yeah, yeah!

And a nutter!

THEY LAUGH

Good, fantastic.

So, you're off partying down in Skegness, but this is home, is it?

-It is home, yeah.

-Tell me what you're going to do to the place.

New windows, new doors externally, all new doors internally,

architrave, skirting board, kitchen, central heating...

-New radiators, central heating.

-It's all been ordered now.

And as for the open-plan situation out the back,

there are plans to put up a fence.

And who's going to begin the work, then? Are you going to be...?

-I've got contractors in.

-I'll be here as well.

So, hang on a minute, hang on, you've got contractors in?

-Yeah...

-You see, I thought you'd be here, like, slaving away,

doing stuff, but you'll be sitting here reading the paper while other people do it?

Nothing wrong with that, is there?! You just told me to take a leisurely life and you've convinced me!

So I'm going to do it. Have you got a chair, please?

THEY LAUGH

Oh, brilliant. OK. You are going to...

Are you going to get your hands dirty a bit?

Oh, without a shadow of a doubt.

I can decorate and paint and I can do quite a few things.

And in terms of internal layout changes, any plans for that?

Just the kitchen. We're knocking a couple of walls down on the far side

-and one wall where there's an outside loo.

-Right.

We're knocking that down.

What amount of money are you going to spend on it, do you think?

-I'd say...

-No more than 12.

-Definitely...

-No more than 12,000.

-No, no more than 12,000, no.

-A timescale?

-Three months.

-Three months.

So, bearing in mind you paid 53 for it and your maximum spend is 12,

that stands you for 65 plus your fees and everything like that.

How much are you hoping you might be able to move it on for?

-Well, I'm hoping it goes between 80 and 85.

-Right.

-Up to 20 grand, then.

-Mm.

And what will you do if you sell it? Will you do another one?

Oh, definitely. Unless I get real hassle on this one, like.

If he gives me as much help as he's promised, definitely!

Yeah, occupy me mind until I die!

But this is... You've got a caravan down in Skeggy.

This is going to be a summertime...

This is going to be a wintertime thing.

It is going to be a winter project every year,

as long as I'm fit enough to do it.

And while I've got him around me, I'm plenty fit enough.

So, all in all, excited about taking it on?

Yeah, I'm...

It's made me feel young again.

-It's made me feel something to get up for.

-Good, well, congratulations.

-Lovely to meet you both.

-It's nice to meet you as well.

-Good luck with it, look forward to seeing how you get on.

-Nice to see you as well, like.

Well, the two Pats certainly seem to have got it off pat

when it comes to doing the renovation.

Will it be pats on the back at the end of it all?

Well, you can find out later in the show.

Well, it has been quite a few months since we last saw those properties.

Do they look any different?

Has all that time and money been well spent?

Let's go back and find out.

It's back now to the railway city of Crewe where, earlier,

we saw this Victorian three-bed house that had charm,

lots of light and, most importantly, space.

It was the perfect property to be an HMO, a house in multiple occupancy.

In stepped Amy who had bought the house at auction for 73,000.

Amy runs her own estate agency and has a huge portfolio of properties.

But this wasn't to be another addition to her books

because she hadn't bought this with her own money.

-Explain your involvement in this?

-I'm a property consultant.

I'm in charge of the investment on behalf of an investor client.

So the investor client wants to put some money into property,

but wants something interesting to do with it.

I find the client, find the property, pull the job together

and set up the contract of let.

And in this case, Amy had brought together an investor

and social services with the aim of turning this house into a care

facility which would be designed to help residents be

prepared for independent living.

And with the tenant contracts already signed,

it was Amy's duty to get this place in shape on a budget of £50,000

and a turnaround of four to six months.

And when we returned six months later, there were new windows

and doors installed. So kerb appeal was looking good.

And inside, though it wasn't the finished article,

work was well under way in the living

accommodation from the former living room, soon to be one of the bedrooms

to the rear dining room that is halfway to being the new kitchen.

Everywhere there is plenty of signs of activity,

from the plumbing to the new wiring and the decorating.

And Amy was on hand to tell us about the story so far.

We are having a complete renovation. We've replaced absolutely everything.

We've done work on the exterior of the building,

structural works to it, replaced windows, dry lined, replaced

the electrics, plumbing, put in additional bathrooms, new kitchens.

Basically, spot the thing that hasn't changed.

It's almost a completely new interior

and not just on the ground floor.

Upstairs the three bedrooms are going through the same process,

each a single bedroom and each with their own en suite facilities,

providing privacy for the new tenants.

While at the top, the loft room has also been renovated.

For such a major overhaul,

the work here has fortunately been straightforward.

Remember, there was a problem with the rotten skirting boards in the master bedroom.

The lintel was original and was wooden. It had rotted away, so we replaced it with a steel.

Simple as that.

Amy reckons this will be a lovely house, providing top-notch

accommodation for the tenants.

But they've also got an eye on the future as to

when the investor decides to sell the house on.

The owner of the building wanted it to be in perfect shape

just in case the original tenant didn't work out.

So we've gone for two sides, capability of professional lets

and the capability of the long-term tenant that was originally lined up.

It's a good safety net to invest in a high level of finish

for the house to attract future clients should

the care facility decide not to sign up,

but in this case the contracts have been signed

and the house should soon be ready for its new tenants in a few weeks.

Amy reckons this is a place to be proud of.

I'm really pleased with the job. I couldn't have asked for more.

I gave the builders a spec, they've come up with the spec exactly.

We've got a really super building.

We should expect not to have to do

any maintenance here for a very long time.

But providing the high spec finish and giving the house a longer

shelf life means a bigger investment and Amy now anticipates

the original £50,000 budget expanding up to £80,000.

It is over, we've blown the budget, but we've absolutely

excelled the condition of building as well. We've gone over

the odds of what we expected to do in the beginning so we've ended up with

a building which is a much better quality than we originally thought.

The budget is over.

The time is slightly over, but we're still on target for

the tenant we've got ready for the property.

With the renovation budget of £80,000, added to the

purchase price of 73,000, the total spend here will be £153,000.

So, what do two local estate agents make of this new HMO in Crewe?

Quality first impressions of this property, some nice finish,

definitely some more work to be done,

but should produce a good finished product in the end.

The owner's maximised the space in this big old Victorian house,

which is great.

And managed to get five bedrooms, all having en suites.

The property represents a unique investment opportunity,

and with the client lined up,

the rental income is already established for Amy's investor.

But what could the house achieve as a normal HMO

on the rental market?

I would suggest each room would fetch a rental income

of £50-£60 each week.

And a rental income of £1,000-£1,300 per calendar month.

The rental market is very strong at the moment, so in my opinion,

this property would rent for £1,500 per calendar month.

£1,500 a month would be OK.

It would still stack up to be a 10% yield.

As it happens, our yield would be about 17 to 18% at 26,000 a year.

So I am very pleased with being able to nail that deal.

And should the investor decide to sell the property,

would there be any profit from that £153,000 spend?

On today's market,

a property in this location would be in the region of £150,000.

In my opinion, this property would sell for offers over £150,000.

I'm really pleased with that.

It'd obviously be worth more money with the tenants in

and the income coming in.

So the second the tenants arrive, we are then go into

going concern territory rather than property territory.

That not quite break even figure is clearly not a worry as this

property is, as Amy says, about creating a home for residents

and with that in mind, we decided to call back

and see the finished result a couple of weeks later when the final

touches had been made so we could see just how the rooms had panned out.

With the kitchens and bathrooms all fitted

and some furniture in place, it is

clear to see this house is going to be a great first step home for the

tenants as well as a very profitable investment for Amy's investor.

We're returning to Derby now, and this two-bedroom mid-terrace which

was bought at auction by retired civil engineer Pat for £53,000.

The property itself has seen better days

but that wasn't daunting for Pat.

I was bored out of my face sitting at home cos I retired two, three years ago.

Pat had had enough of sitting around and wanted a project to keep

himself busy.

Pat Senior, together with his elder son Pat,

planned to renovate property with a budget of £12,000.

We came back after just two months to see how they'd got on.

In here, as you can see, there's a big transformation.

There was a big brick wall there which we knocked down.

There was a wall across here which was a brick cupboard which

we knocked down.

Got everything back to the bare brick and re-boarded and re-plastered,

and fitted a new kitchen, which I think worked out pretty well.

So, that outside loo we couldn't even get into has been

incorporated to help make this a bigger, brighter kitchen.

Upstairs too, they've given each room a complete overhaul.

I done the whole thing, tiled it,

new bath and new toilet and new sink. Tiled the floor.

Decorated it. I done the whole thing. I'm very pleased with it.

The central heating has been refitted throughout the house,

freeing up space in the second bedroom where the old water

tank and immersion heater were.

We painted all the paintwork and obviously the new windows and everything.

Done all the garden. Moved the shed.

-The air raid shelter is still there, actually.

-Yeah.

I took the gate off the shed and put it on the air raid shelter,

two solid posts, so at least they've got somewhere to put the lawnmower.

And Pat has also erected a fence between his property and next door.

So how did the budget pan out?

The original budget, I said I wouldn't go over 12,000

but it's got to about 14, I think.

It went to 14,200, but it takes what it takes.

And I'm still delighted with it anyway.

-Still a bit of profit in there.

-Yeah.

Pat's total spend is £67,000 and although he said he'd be

happy to break even, his son thinks there's a bit more profit in it.

Would two local estate agents agree?

We invited two along to ask their thoughts.

The house looks really tidy, really smart now,

it's like a brand-new house inside.

It has everything done to it, new heating, new windows, new doors,

new timber work, re-plastered. It's like a brand-new house.

It's a really good job.

It's done to a fairly good standard.

It's not the best, but it will certainly do.

Nice and clean so, yeah, looks good.

'I really like the clean, smooth lines.

'Because the property has been re-plastered,'

everything looks really tidy.

With the white kitchen, the white bathroom, it looks very clean.

The sort of house somebody would want to move straight into.

'Properties in this area usually get

'sold fairly well if they're in poor condition.'

I think people like to be able to add the value

themselves rather than to have had someone already do that for them.

There is a strong demand for first-time buyer

type of property like this in such good condition.

It would let or sell very quickly.

Conflicting thoughts on this property's rental

and selling capability.

Let's see if they can agree on what it would be worth

if Pat chose to sell it.

I think if we were to put this property up for sale,

I'd be looking at achieving around about £80,000.

I think we would put the property on the market at £79,950.

I've already been quoted 85 to 90.

Well, that didn't impress Pat much.

Let's see if they fare better with their rental appraisals.

If we were to rent this property out, I think

£450 per calendar month would be achievable.

I think this property would rent at £450 per calendar month.

It would never be rented anyway.

-It's not bad that, is it?

-No, it ain't.

Pat's been clear all along that he bought his house with

the intention of fixing it up and selling it.

With that auction price of 53,000,

plus the £14,200 renovation costs,

even if they sold at the estate agent's valuation of £80,000,

it's a profit of around £13,000 minus taxes and expenses.

So, how has the whole experience been for the two Pats?

It's the same as father and son working anywhere.

You have your fallouts, but we still get on all right

and we still walked out the house every night happy enough.

-We come happy enough and then we started.

-Yeah.

Pat bought the property as a cure to his boredom,

has it done its job in that respect?

I've enjoyed it thoroughly.

I'll just be bored from now till March when the caravan opens.

But I'll keep my eye open at the auction.

Well, Lucy and I hope you enjoyed watching Homes Under The Hammer

and we'll have lots more stories for you next time.

Yes, join us then for some more hot properties and maybe

-some not so hot properties. Goodbye.

-Goodbye.