Episode 26 Homes Under the Hammer

Hello, and welcome to the show.

All sorts of people buy property at auctions -

they attract buyers from all walks of life.

And that's because there are bargains to be had under the hammer.

Well, there are all sorts of buyers

and a wide variety of properties available at the auctions.

Yes, there's a race to get the best bargains and you have to be

in it to win it, so let's see what's featured on today's programme.

First up, in Newham, London,

it's pretty clear what the first job should be.

Main thing is you need to get rid of it!

Whilst in Margate, Kent, I won't be giving up the day job any time soon.

Bit of a gag here - sofa bed. Ha-ha! You like that?

And in Corby, Northamptonshire,

it looks like the jobs will be left to the pros.

Unfortunately, I'm not very handy.

Only thing handy about me is I live around the corner!

All these properties have been sold at auction

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

when they went under the hammer.

All done, sir - it's yours.

This is Newham - a borough of East London

and our auction lot is not far from Newham Hospital,

which could mean lots of potential hospital staff as tenants.

Well, if you're hoping for somewhere that is close to transport links -

well, Tube ones anyway - you might be disappointed.

It is a 20-minute walk to the Tube.

However, let's just talk about prices,

because the average price of properties around here

is £246,000. Mm-hm.

This place behind me had a guide price of 180,000 - three bed,

mid-terrace - that's interesting, isn't it?

A property guided below £200,000 in London

has got to be worth investigating.

Let's hope it doesn't disappoint.

So, whenever there's that level of discrepancy between average

property prices and the guide price, you've got to be thinking,

"What am I going to be faced with?"

Well, actually...

Doesn't smell damp.

Obviously in need of a bit of tender loving care, but good size.

I like the front room - nice feature fireplace.

Bay window, double glazing.

I'm looking around though

and it doesn't look like there's central heating.

You'll have to factor that into your budget.

Fairly standard layout - stairs up to your bedrooms,

into your rear sitting-room. Poke behind here...

Slightly disappointing!

I was hoping for something a little more elaborate than that!

But at least it's an open fire - I love open fires.

Make a bit of a feature of that.

Door out to your garden there

and then from middle-of-the-road,

"It's OK", kind of scenario, to

"Oh, no!", when you come in here.

This, sadly, is the kitchen.

Built into an extension on the rear of the property

and as you can see, it is pretty inadequate.

Sadly, it gets worse, because THAT

is your bathroom.

I say bathroom, there's no bath in it,

but there's a separate loo and this shower area.

Obviously they've also got signs of damp as well,

so from what was a reasonably hopeful start,

eurgh!

It all went a bit wrong!

It's a shame, because the rooms

and the main body of the property are great, with bags of character.

Then the kitchen and bathroom are crammed in the back,

almost as an afterthought.

# Shame

# Ooh ooh ooh... #

And with modern living demanding or maybe requiring a big,

modern kitchen, this just doesn't hack it.

# Shame

# Ooh ooh ooh... #

But hang on - look at this!

A very substantial garden indeed - in London, no less!

This is a massive bonus.

You could easily fit a bigger and better extension in here to house

a kitchen, maybe even a two-storey one with a bathroom above.

Or am I getting ahead of myself here?

Maybe there's room upstairs for the bathroom, so all the space

in the current extension could be given over to the kitchen?

Let's see.

So, upstairs, what are we going to find?

Well, a little landing area here, you could make it feel a lot less

claustrophobic by getting rid of that cupboard.

First of the bedrooms, that's not a bad size.

It's nice it's got another original fireplace, gives real character.

We like that.

But once again, the house gets you all excited

and then as you progress a little further

it goes horribly wrong,

because these are the second and third bedrooms.

This is the second one - as you can see, it's really small -

what's that all about?

It's all stud partition walls. Um...

The clue as to what is going on can be found, bizarrely,

through the stud partition.

Clearly this isn't an original feature, but it does give you

a chance to do a masterclass in construction and stud partitions.

Main thing is you need to get rid of it!

It's divided what was a fairly decent front bedroom into two

really unacceptable smaller bedrooms.

You may get a bit more rent for the property with three bedrooms,

but really - it doesn't work, does it?

# We belong together

# We belong together

# Always true... #

These rooms definitely need to be reunited

and I reckon a few hours with a sledgehammer should achieve that.

The house would be all the better for it and for me,

this property is a bit of a curate's egg - good in parts,

with nice period features and some good-sized rooms,

plus that attractive £180,000 guide price.

But the layout is really holding it back.

But what does a local estate agent think of what's on offer here?

Does she have any thoughts about the layout?

As a personal preference,

I would leave the big bathroom downstairs to have a family bathroom

and have even an en-suite shower room

upstairs or a separate shower room.

That's not a bad idea, even if the bathroom remains in the same place -

perhaps the attraction of an en-suite would entice buyers in.

But that would mean it would have to be a two-bed house

and not the pretend three as we have at the moment.

What effect would that have on the value?

Once renovated, and in its current layout,

this property can resale in between 270 and £280,000.

If this property would be renovated

and changed to a two-bedroom house,

this property could be resold

to a price in between 240 and £260,000.

Wow! So losing that third bedroom could mean lessening the value

by 20 or even £30,000.

That has to be the most expensive partition wall ever!

However, the agent thought that as a two-bedroom house, it would

sell faster than a three-bed.

So, what about the rental values?

This property can be rented out for

£1,300 per calendar month.

As a two-bedroom house, this property can rent out for £1,200

and it can go up to £1,250 per calendar month.

So, not particularly close to the Tube, but a nice quiet area

and I think potential to add real value to this one.

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

Mid-terraced, five-room house. 180.

Must be worth 180. Standing up. 180.

181? 181. 182.

183.

184.

-185.

-Well, not surprisingly, this was a popular lot.

We rejoin the bidding at £200,000.

200. 201.

202.

203.

204.

205.

206.

205 on my left.

206 elsewhere?

If not, £205,000, first time...

Second time...

Third and last time, are you all done?

-BANGS GAVEL

-Sold, 205, on my left.

Hidden from our view,

but catching the auctioneer's eye,

for that final bid of £205,000 was Raj.

We met at the property so she could tell me what she has planned.

-Raj, great to meet you.

-Hi.

-Congratulations.

-Thank you.

Tell me why you wanted to buy the house.

I think it's affordable round here

and it's good for the rent.

That's the plan, is it? Rent it out?

-Yes.

-What is it about the area that particularly appeals?

I've got a few properties around here, so I know the area quite well.

Newham Hospital is quite close by and

the East London University is round here, so...

Raj used to be a hospital supervisor,

so she knows well the market that could be tapped here.

However, property is now where she earns her living.

I've got a son with special needs and after he was born,

I couldn't go back to work and then, thinking about his future

and mine as well, I started my own business.

Raj has refurbished properties for resale as well as building

a rental portfolio in this area, which has helped her find

a more flexible way of life to meet her 14-year-old son Aaron's needs,

as well as look after her two daughters, Riya and Hannah.

What's the sort of goal?

So my son can have after us about £5,000 monthly

coming in from somewhere, he doesn't have to rely on somebody,

so he's got enough money coming in to look after himself.

I quite enjoy it myself, as well, doing these things.

I get to relax because sometimes you do get stressed thinking

about him, but when I'm working I just get relaxed, because I love it.

I've never thought of property developing as relaxing!

You can sure get passionate about it, excited by it, frustrated by it!

But relaxing?! Each to their own, Raj!

I assume she's got a very relaxing project plan for this

stress-free property?

So what are you going to do with it?

All the decorations, everything - replastering, rewiring,

-new kitchen, new bathroom.

-Bathroom, keeping it where it is?

Temporarily, I think so. I've got a few ideas I need to get around.

I'd like to have a big kitchen

-because the kitchen is quite small at the moment.

-Yeah.

I'm not doing any planning permission at the moment.

Because I'm renting, I don't want to keep it for eight weeks empty.

-OK.

-Maybe for the future, I'll move the bathroom upstairs.

What about upstairs?

Obviously, three bedrooms, but one that's very small.

It's originally a two-bedroom house, I know that because most of

the houses on this road are two bedrooms,

-so we are turning back to two bedrooms.

-You are, OK.

What difference does that make in terms of the rent?

It's not a big difference.

If it's a two bedroom, nice, good-sized,

-people like that more than having a small three-bed.

-Yes.

So what budget have you got for this place?

Around 18,000.

£18,000 is a pretty healthy budget

and should mean even if the kitchen and bathroom

remain in the same place, they will be of much improved quality.

Her husband Jagdash

and daughter Riya have come to look around Raj's new project.

She'll also be getting plenty of help from her other daughter, Hannah.

The girls normally like doing the painting, stuff like that.

-Oh! How old are they?

-One is ten, one is seven.

-Oh, great!

They get involved - want to know what colour I'm doing,

-what's happening.

-Listen, congratulations. Good luck with it.

-We'll see how you get on.

-Thanks, bye.

Well, people get involved in property developing

and investing for all sorts of reasons, in this case

Raj using it to secure the financial future for her family.

Good stuff.

In terms of not building an extension above the existing one

straightaway, is that the right decision?

And how about that tight timescale?

Will she get it done in time?

You can find out later in the show.

Now, do you fancy leaving London behind for a trip to the seaside?

Well, traditionally, when Londoners wanted to do just that, they

made the short trip here, to Margate.

I've visited it a lot over the years and I've watched it transform

in front of my eyes with the help of various regeneration schemes,

it's now a smart seaside town with blue flag beaches.

# Down by the seaside

# See the boats go sailing... #

As with all regeneration,

the hope is the benefits will spread to surrounding areas.

About a mile and a half from the centre of Margate is

Cliftonville, which has seen some hard times.

It's a place with some gorgeous buildings,

so my hope is that we'll see this area get a new lease of life too.

Oh, how I do like to be beside the seaside!

No, I know you might not be able to see it on a foggy day

like today, but it is actually just at the end of the road.

The property I'm here to see is THIS - it looks a little shabby

from the outside, but it's already been

converted into five dwellings, all for a guide price of 115 to 120,000.

I'm going to head inside and take a look around.

Well, this is actually a fairly pleasant hallway.

It is a bit dated with the old woodchip,

but it's a good size and there's still a bit of character left here.

I know that flat number one at the back is already tenanted,

so I'll pop into flat number three and have a look around.

# Cos I'm free... #

This lot also comes with the freehold of the whole building,

so if you want to alter it or clean up that shabby exterior,

or those communal areas, any planning issues aside,

you have a lot of freedom.

# I'm free to do what I want

# Any old time

# I said I'm free... #

So, into flat number three and, er...

this is it. It is just one room.

So what have we got in here?

Nice, high ceilings, beautiful cornicing, nice fireplace.

Fabulous bay window, a very small kitchenette,

couple of cupboards and a sink.

And a bit of a gag here - sofa bed.

Ha-ha! Do you like that?

I know the washing facilities are upstairs on the first floor.

This really is it. I'm going to check out the flat number two now.

So, like next door, it's just one room, not that much space.

Another sofa bed(!) We've got a nice fireplace here...

I'm just thinking it might be worth knocking these two little

studios into a one-bed flat.

You might not get as much rent, but I think you'd get a longer

term tenant and it would just be a much nicer property to live in.

At the moment, they're only divided by partition walls,

so it would be easy to take these down and rearrange the space.

As you know, I would always recommend having a chat

with your local planning authority to get their guidance in case

you come a cropper.

Now, I already mentioned the one-bedroom tenanted flat

on the ground floor.

Moving up onto the first floor,

you have the communal facilities for the two bedsits I've just

looked at, including shower, toilet and washing machine.

There's another one-bed flat on this floor

and then you head up to the top floor

and a fifth one-bed flat.

Replacing the dated carpets and giving the walls

a lick of paint would really brighten up these communal areas.

However, even as they stand, the three currently occupied

one-bed flats bring in an impressive income

of £13,780 per annum.

It's not that often that I visit tenanted properties on this show,

but they do come up at auction.

On the plus side, this means you already have a regular income

from the rent that's being paid

and you're not left with an empty property just sitting there.

But there are also some negatives to consider. For starters, you

could inherit problematic tenants that are behind in their rent.

You may have to honour long-term agreements,

halting any refurbishment plans that you may have.

So there's lots to consider - just make sure you do your homework,

read the legal pack

because it's not always as straightforward as it may seem.

This property has a licence from the local authorities to be

a house of multiple occupancy, or HMO.

Now, the licence is awarded only once all building regs, communal

facilities and safety precautions meet the required standards.

There is a push in this area for more family dwellings,

so HMO licences are difficult to come by -

so already having one is a bonus.

At a guide price of just 115 to 120,000,

we could be looking at a little money-spinner,

so we asked the local property expert for his opinion.

From what I've seen having looked around the property,

it's reasonably clean and tidy, but it is quite dated.

I consider the two bedsits quite small,

so I would suggest that you look at putting that into one apartment.

But that depends on local planning regulations, of course.

Assuming you left them as bedsits, how much rental could you make?

Once renovated, I would suggest this would probably not let for any

more than £200 per calendar month.

If these two were put into one one-bedroom flat, I would

imagine it would let for somewhere around £400 per calendar month.

Those figures confirm what I said earlier -

having it as a one-bed flat wouldn't make you any more money.

In fact, it would cost you to do the conversion back to a one-bed,

but I reckon it would be more likely to rent

and be a much nicer place to live.

And a happy tenant means a happy landlord in my book!

Let's work on the basis that we turned the two studios

into a one-bed flat - what could it sell for?

A one-bedroom flat here could resell for approximately £65,000.

Add that to the three other one-bed flats

and four times £65,000 equates to £260,000.

Much more profitable than the 175 to 180,000 that our agent

estimated the property would be worth

if you were to sell it as one after basic renovations.

If you buy this property for the top end of the guide price,

you still get a rental yield of 11%,

without even lifting a finger to do any work!

This sounds like it could be a great investment for someone -

let's see who that was when we went to the auction.

Good-looking property there, guided at 115 to 120.

Are you going to come in at 115,000?

115? I'd have thought it was worth every penny of that.

Give me 110, then - set me on the way. 110, I'm obliged.

At 115, sitting down. 120, it's against you.

120, if you like.

120, do I see? Take 118 if you like.

If not, 118, second row back.

120, sir. 120, can I say? 120.

And two? 122. And four. 124.

It's against you. 124.

At £122,000, I have for the first time, second row back.

I'm looking for 124. It will be sold for the second time at £122,000.

124 I've got. 126. You were pretty close to it.

Another one? 126. 128?

128, if you like.

If not, at £126,000 going for the first time,

£126,000,

for the second time...

Third and final time, second row back, 126,000, all done.

-GAVEL BANGS

-You bought it, sir - 126.

The successful bidders were husband-and-wife team Steve

and Louise, with a bid of 126,000.

From nearby Sittingbourne, Steve, who runs a shop-fitting company

and his florist wife Louise started up a small property company

around ten years ago and have been gradually adding

to their portfolio once or twice a year.

I met the pair of them

back at their latest acquisition to find out their plans.

-Steve and Louise, congratulations.

-Thank you.

How did you find this property?

We look through the local auctions, see what's coming up

and we identified five properties in the area on that particular auction.

Came down and this was our preferred choice,

-so we're delighted to be successful.

-What was it that appealed so much?

Mainly the yield.

That was quite interesting -

even with this empty property, we're still managing 11%

potentially, subject to what we finally paid at the auction.

And what do you like about Margate?

We've just seen how up-and-coming

it is and watch your programme quite a lot!

Good!

Down on the seafront, all the little shops

and boutiques are really quite pretty.

It really has changed over the years.

-Do you feel this is a great place for you guys to invest at the moment?

-We're certainly interested.

Our main property portfolio is in the Medway towns, but we have

seen that we're achieving better results in this part of the world,

so it's certainly where we're focusing our attention going forward.

So what can you tell us about the tenants

and tenancy agreements of the people that were already here?

I know a lot of people might have been put off by the fact that

-people already live in this building.

-It was a concern.

We don't know too much about how long they've been here, so that was a

risk we factored in to the deal, but we consider it a risk worth taking.

So now you've bought the property at auction, do you think that will

pose any problems, the fact that people already live here?

So far, since we took the property on Monday,

two of the tenants have been and introduced themselves, so we're only

waiting for one other tenant to go into our agent and liaise with them.

Steve and Louise still have some things to go over,

as although they read the legal pack,

some details were marked out for data protection purposes.

So that will need checking through,

but the couple employ a local agent to look after their properties,

who they think can organise things quickly.

Do you have any plans to move the tenants on or are they free to stay if they want to?

-Are you going to be upgrading all their properties?

-We'd like them to stay, most definitely.

If it's their home, we'll upgrade it for them, make it a nicer environment.

-We certainly would welcome them staying.

-So that's a win-win situation all round.

-That's good news to hear.

-Let's hope so.

Smiles all round, then - especially for the existing tenants!

# Ooh, baby

# Something tells me

# I'm on a winner with you

# Ooh... #

So, what are the couple's plans for the property?

This is currently situated as two bedsits,

which...potentially the yield would be better,

but it's not really for us, so Louise and I have discussed it

and we're going to turn this into another one-bedroom flat.

We aim to do that over the next six to eight weeks.

We'll look at all the common areas and bring them

up to something a little nicer,

give the outside facade a face-lift, as well.

Steve and Louise have a budget of 15 to 20,000

and plan to use contractors to do the work.

But it will still be a team effort.

So who's going to play what role here?

I'll be overseeing what the builders are doing

and how they're getting on and Steve will basically be doing the rest.

As I'm down here today, I'll do the designs, take the measurements

so we can order the materials and get everything ready for the guys

so there's no delays on that part.

Guys, I'm really excited for you, congratulations.

-This has been a good purchase - well done.

-Thank you very much.

Thank you.

Well, Steve and Louise might have done this before,

but it's certainly still not without its risks.

Let's hope there aren't any complications along the way.

You can see how the couple get on later on in the programme.

Still to come, in Corby, Northamptonshire,

an old favourite of mine turns up.

Polystyrene tiles! Don't you love them?

Whilst beside the seaside in Margate,

will the sun be shining down on Steve and Louise's project?

But first, it was in the London Borough of Newham where

I came across a mid-terraced, three-bedroomed house.

Well, I say three-bedroom, but this was originally a two-bed house

that had been divided up to create an extra bedroom.

You may get a bit more rent for the property with three bedrooms,

but really - it doesn't work, does it?

Yes, that dividing wall needed to go.

The downstairs layout wasn't too clever, either.

With the bathroom only accessible by passing through the kitchen,

it was a house with issues.

But for property developer Raj,

this was nothing she hadn't tackled before.

Indeed, she owned similar types of houses in the area.

She snapped this one up for 205,000 to add to her burgeoning

property portfolio.

Tell me how you got into it.

I've got a son with special needs

and after he was born I couldn't go back to work,

and thinking about his future - and mine as well -

I started my own business.

And the aim was that her rental portfolio would generate

enough income to look after her son.

This was also to be a family affair, with her husband, brother

and two daughters all lined up to help,

alongside her regular team of professional tradesmen.

And with a comprehensive renovation and layout change planned,

it was going to be all hands to the pump,

with a budget of £18,000

and a timescale of just four weeks!

And now we're back with Raj to check on progress.

Oh, my goodness! What an unbelievable transformation!

The lounge has been knocked through

to take some space off the rear reception room.

And remember that sorry kitchen extension with that shower room

at the end of it?

Well, it's not so sorry now!

The kitchen now occupies all of the rear extension

and has doors leading out to the garden.

And the bathroom - where's that?

Well, that now has its own access in what was the rear reception room.

What a clever layout change!

And upstairs, remember that back bedroom

that had been divided in two?

Well, it isn't any more.

# Reunited and it feels so good

# Reunited cos we understood... #

And with the other bedroom finished with similar finesse,

upstairs is oh, so much better.

And if the house itself wasn't amazing enough, look at the garden.

Truly stunning.

And get this - all these changes were done

in just 3½ weeks.

Whoa!

So is Raj pleased with the outcome?

I think it's turned out quite good.

I'd like to have a bigger lounge, but there wasn't any other way

we could do a bigger kitchen and nice bathroom as well.

But if it's a nice kitchen, nice bathroom,

you get a lot more money as well.

Yes, definitely kitchens and bathrooms sell properties

and make it easier to get good tenants.

But usually, more bedrooms add value too,

so is she worried about losing the extra bedroom?

At the moment, because we're keeping the property,

there's not a big rental difference between two and three bedrooms, but

in the future, if we want to sell it, then we will extend and then sell.

Raj employed a team of builders she has used on other projects to

do the bulk of the work, but her family also helped,

particularly with the decoration and the dressing of the house.

And not only did she complete the work under her four-week timescale,

she also did it under budget,

spending just £17,000, which on top of her £205,000 purchase price,

takes Raj's total costs to £222,000.

I think it's all incredible,

but what did two local estate agents think?

Starting with the agent who saw it in its previous shape.

I do like the layout of the property.

I like the kitchen, because it is modern and new.

I like the bathroom, as well - they've put a bit of a style

and the living room as you go in, looks very nice.

Where they've manoeuvred things around,

the bathroom is now in a much better position.

The finish is exceptionally good, as well.

I like the contrasting colours they've used and think it

will appeal to most people in this marketplace at the moment.

Raj wants to hang on to the house, adding it to her rental portfolio.

But how would a property she's invested £222,000 on so far

fare on the current resale market?

This property could resale under current market conditions

in between 270 and £280,000.

The resale value on the property, I think with how the work has

been carried out, you're looking at around 270 to £280,000.

I was thinking it might be 250,

so I'm really happy with that.

So a potential pre-tax profit of between 48 and £58,000.

But what about those all-important rental values?

The property could be rented at a price range between 1,100

and £1,200 per calendar month.

You'll be looking around about £1,100-£1,200 per calendar month.

So what does Raj make of those rental valuations?

I'm confident that by the end of the week it'll be rented at 1,250.

If she manages to get 1,250 per calendar month,

that would mean a yield of nearly 7% -

not bad for a four-week project!

I can't get over how much she's managed to achieve

in such a small time.

So what is Raj's secret, apart from a team of very reliable builders?

My advice is, if you want to do something, you can do it.

So...if you go 100% your heart and brain into it,

you can do anything.

# You can do magic, magic, magic

# You can do magic, baby... #

And Raj's philosophy has won through.

As we've just heard, she's let the house as predicted

for £1,250 per calendar month.

# You can do magic, magic, magic

# Like you can do magic, baby... #

Meet the steel man,

a monument to the industrial past of Corby in Northamptonshire.

Corby grew from a village in the 1930s

when a new steelworks drew people from all across the country,

especially the west coast of Scotland.

The Scottish community thrived here and in the 1950s,

expansion of the town led to a further influx of Scots

from across the border,

earning the town the nickname "Little Scotland".

Today, the steelworks have long gone, but the town is still

thriving and in 2010, was set to be the fastest-growing

town in England - sounds like a good place to invest in property.

So, what property made it into the auction catalogue

and onwards to a happy buyer?

Well, it's this neat '60s mid-terrace and already I'm thinking

I like that tiled frontage!

Guide price was £65,000 plus.

In we jolly well potter!

There's a nice little entrance area here

and through that way to the kitchen area.

This way through into the lounge.

I do like that little front bit - it's somewhere to put your stuff

when you come in - your hats and coats and bags.

Lounge, not a bad size,

gas-fire - loads of light pouring in which is good to see.

Through to the back.

Little dining area over that way with some nice patio doors

out into the garden.

You immediately sort of start thinking I wonder if there's

some walls that could come out to make it a bit more open plan?

Especially in here - this is the kitchen. As you can see,

it needs a bit of work, but it's a nice-sized space.

This wall, though, would be number one candidate to go,

because you've got this strange little utility area there.

Open that up to give a much nicer space.

But before you start knocking any walls out, there's one feature

of the property that does need to be addressed.

Polystyrene tiles! Don't you love them?

This house is actually a bit of a museum to them.

Different polystyrene tiles on the ceilings in most of the rooms

and you may well be staring at these in your property, in which case,

they need to come off - they are a massive fire risk.

If you do have a fire in your house, what happens is they basically

just melt, dripping plastic, foamy whatever-it-is onto whoever is in...

They are a disaster.

Seriously, if you're just living in a house,

please think about getting rid of them.

And if you're a landlord, there are guidelines to follow which

will be checked if your property requires a fire certificate.

They are only permitted IF they meet relevant fire resistant standards,

IF they aren't on an escape route or stairs,

IF the tiled area doesn't exceed more than half of the floor area

and IF it isn't more than 20m squared.

Too many ifs already -

in my opinion, they're not worth the bother.

Moving on upstairs, there is

a small landing that leads off to four bedrooms.

Two slightly larger rooms and two smaller.

But all good, usable spaces.

The bathroom is, again, functional.

Not much space to manoeuvre, but you can fit in all the basics -

sink, toilet and bath,

which can't be said for all the properties I see!

All in all, it's a good standard property.

It has everything you could need including this rather

colourful downstairs toilet.

A bit more space would always be nice

and maybe knocking down walls could open things up a bit, but that

means additional costs and this property does function quite well.

So, with a guide price of 65,000,

what did a local property expert think of it?

I think with the layout of the home,

it's already got a very good flow.

Certainly upstairs with the bedroom accommodation,

the landing space works extremely well.

Ground floor wise, you could open up between the dining room

and kitchen. The kitchen/breakfast room is already a good size.

Having a separate utility area,

you could incorporate either one of those two areas into it,

giving it an open-plan kitchen/family room, which is very popular at the moment.

And what other work does he think needs doing to the property?

To start with, it would be the central heating system,

there doesn't appear to be any form of heating in the home.

The polystyrene ceiling tiles are an issue,

they would need to be removed and the ceilings re-skimmed.

In terms of the wiring system in the home as well,

it seems to be dated,

so the new consumer unit and a rewire in the property would be required.

So what can all this work convert into in terms of profit?

In the current marketplace,

I believe this property having been refurbished to a good standard as

described, it would fetch something in the region of £120-£125,000.

Wow! That's nearly twice the guide price.

Can you get such a good return on the rental, as well?

For the rental market, I believe this property would achieve

something in the region of £650-£675 per calendar month.

That's all sounding quite healthy,

so get rid of the ceiling tiles, open up the kitchen

and you could have a nice little bundle of profit on your hands.

Let's see who got this possible gift of a property

when it went under the hammer.

A three-bedroomed townhouse -

who's got 64 to start me?

64? Thank you.

£64,000.

65? Thank you, 65.

65, seated at 66.

67. 68, sir?

68 is bid. At 68,

500. 68,500?

69. 500?

70,000.

It's not a dear property.

500. 71.

71. 71,500?

71,500.

72? 72 is bid.

It's got to go.

At 72, it's worth one more. at £72,000,

500 somewhere else?

At 72,000, once,

twice, third time.

Sold at 72,000, thank you.

The hammer fell at £72,000.

Buyer John came to Corby when he was 18 months old

and like many before him, worked in the steel industry.

Now he runs a taxi business. I met him back at the property

to tell me more.

-John, great to meet you.

-And you.

-Congratulations.

-Thanks very much.

Tell me why you wanted to buy this place.

Just an investment, really.

It's something I've been looking at for a little while now

and the housing market is starting to pick up a bit, I thought

-it was a good time to invest.

-So of all the ones you could have picked, why this one?

I looked at it three or four days

before the auction and was quite impressed.

It's needing a bit of work done,

but I think there's room for an investment to make a profit.

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

Downstairs, we're looking at maybe knocking the dining room wall

out and making it a kitchen/diner.

-Mm-hm.

-There's a room adjacent to the kitchen -

we'll probably keep that as a utility room, I think. Living room...

Basically everything needs cosmetically tidying up, really.

And electrics, probably!

Well, yeah! Electrics will be the first...

I've got my cousin coming in tomorrow, who's an electrician,

so he's going to start work on that because obviously it'll need rewired.

-Obviously pesky polystyrene tiles everywhere.

-Mm.

-I presume they're coming off?

-Blast from the past, aren't they?

Yes, they've got to come off.

I don't know what state the ceilings will be like under it,

but they'll probably need skimmed. The whole lot will be coming down.

What's the budget?

We're looking between 15 and £17,000 I think.

That should make it nice and respectable, for prospective rentals.

-Yeah.

-The rewiring, I'm hoping for mate's rates from my cousin, so!

I'd HOPE so! It's not mate, it's family!

So I'm looking around about that, I'd be quite happy.

And are you going to get your hands dirty? Do you do a lot of the work?

I'd like to say I was, but unfortunately I'm not very handy!

The only thing handy about me is I live round the corner!

I'm not a trader or anything,

so I'll be calling friends in and local tradesmen

will do most of the work in here.

I'll probably help ripping the garden up and sorting that out,

but no - a project manager, I think!

Sometimes it is best to leave it to the professionals!

It's always handy if you are handy,

but it's always good to know your limits.

You might begrudge getting the professionals in, but you've

got to weigh up how long it will take you

and how good a finish you would do.

A bad finish can cost you money and time is money in property.

John has a timescale of four to five months

and I think he's making a wise choice.

And then, once it's done, on the rental market.

-And you, back in the auction?

-Possibly! I've got the bug, now.

I found it really interesting.

It was the first time I'd ever been and I really found it interesting.

I was there with my brother-in-law

-and we were joking about being on the show, actually!

-Were you?!

So I was quite shocked when I was approached!

-Were you happy with what you paid for this?

-Absolutely, yes.

I mean, I went there with the thought of... I think the guide price was 65.

-I would have kicked myself if I hadn't gone.

-Good. Congratulations.

-Thanks very much, Martin.

-Look forward to seeing how you get on.

Cheers.

Well, I think John's got a good house for his first investment property.

How's he going to get on sorting it out?

A reasonable budget,

reasonable timescale - it should all go to plan.

You never know! You can find out later in the show.

Well, it's been several months now since we last saw those properties.

Has any work been done? Do they look exactly the same?

Let's go back and find out.

SEAGULLS CRY

Back now to a spot I used to holiday at as a little girl. Sunny Margate!

It was here that I met Steve and Louise,

who had bought this property for 126,000.

Consisting of three one-bed flats and two bedsits,

it already had tenants in the three flats,

so we were only able to see the two bedsits.

But what I did see showed real potential

and experienced renovators Steve and Louise agreed.

What are you going to do to change this?

This is currently situated as two bedsits, which potentially,

the yield would be better, but it's not really for us.

Louise and I are going to turn this into another one-bedroom flat,

which we aim to do over the next six to eight weeks.

We'll look at all the common areas and bring them up to

something nicer, give the outside facade a face-lift, as well.

Having existing tenants could be problematic,

but Steve and Louise were relaxed about it,

plus they own the freehold to the building, which was a big bonus.

We've returned two months later to see how the couple have progressed.

As promised, the two poky bedsits have been

turned into a desirable one-bed flat, as Louise explains.

So originally, this would have been the entrance hall to bedsit two

and three.

So the doors were here, this is bedsit two, bedsit three.

Partition wall here and here, which we've taken down.

We've put the beautiful kitchen in

and the new en suite. So we've made it a beautiful one-bedroom flat.

Along with the new kitchen and en suite, they've also created a nice

outdoor decked area

that leads off the bedroom, which is a lovely bonus.

True to their word,

Steve and Louise have also repainted the corridor and communal stairway,

as well as re-carpeting throughout,

therefore improving it for the existing tenants.

The communal area, which once housed the toilet

and shower for the bedsits has now been turned into a kitchen,

thanks to a discovery that Steve wasn't expecting.

We're in the communal area. Our plans slightly changed here

because previously there was a WC and toilet in this room.

We realised that behind that wall,

there's actually a complete bathroom, so that's no longer required.

We've had that all removed.

Turns out one of the locked doors we couldn't get access to

on the first floor housed a shower room used by flat five,

so that has changed the way they're now looking at this space.

If they carry out a plan to put a shower room in that flat,

then they can turn the current utility area,

newly-discovered shower room, toilet and hall into a small,

separate fifth unit, meaning five units rather than four -

potentially improving any possible rental yield for Steve and Louise.

As with our first visit, flat one, four and five are occupied,

although flat four did have a change of tenant - which gave Louise and

her sister the opportunity to nip in and give it a quick lick of paint.

The whole building now is looking brighter, fresher

and more desirable -

perfect for the rental market that the couple want to attract.

# Now come and meet me

# On the sunny road... #

I'm most pleased with the property.

I couldn't really visualise how it was going to look

and when we came down and the wall had been knocked down...

The guys have worked so hard and we just walked in and it's...

We're so pleased with all of it. It looks absolutely fantastic.

I took the role, originally I did the drawings of the kitchen

and bathroom and layout

and then I very cleverly passed it all on to Louise who's been down here

running around after materials, making sure it all happens.

-Done a fantastic job!

-Thank you!

Yeah, quite right, too!

Louise and the team of contractors have done a great job.

But how is their original timescale looking?

Our initial thoughts were it would take six to eight weeks

to do the property.

We started a little bit behind because of having to renovate

flat four and then my main business has been really busy

and I used the contractors that we employed here to

work on my main business, so in fact, we did start late,

but this whole property was done in just under two weeks.

When we initially purchased the property,

we set ourselves a target of between £15-£20,000 as a budget

without really having a good look at the property.

We've incurred a little bit of extra expense

because we have now done flat four, which we weren't expecting to

at that point, but we're coming in around about the £13,500 mark.

But we have still got some bills to come in and we've still got

some more works that we intend to do to further improve the property.

So, as it stands, Louise

and Steve have invested a total of £139,500

and their plans to rent the properties out are going really well,

with all the flats being tenanted -

including the newly-renovated one-bed,

which has a tenant moving in shortly.

So, with these seaside properties bobbing along nicely,

it will be interesting to see what two local property experts

think of the renovation - based on the bits they have access to, of course.

It's my second time to the property.

The changes they've made have been very good, they're quite basic

but they've improved the property immensely.

So, the agent who first saw it thinks the property has improved,

but improved ENOUGH? What about values?

If the whole property were to be sold with the four dwellings, I

would expect it to achieve probably no more than about £200-£210,000.

If the owners were considering selling this property as a whole,

I would consider a marketing value of £270,000.

We had an initial offer just after completion of 250,

so I think somewhere between 250 and 270 now we've done the work,

considering the yield, would be a reasonable figure.

210 may be a little on the low side!

So, if we take that offer of 250,000, that would mean

a potential pre-tax profit of a huge £110,500,

minus taxes and expenses.

But even in the face of that stunning profit,

the pair still only have eyes for rental.

In terms of this particular flat for rental, I would expect it to

achieve approximately £400-£450 per calendar month.

For rental income per month, it would be £400.

So, that would boost the already impressive yield

of 11% for the other flats in the property

to a whopping 13%,

making this project a HUGE success -

and Louise a very proud lady.

I've really enjoyed it, actually.

Steve's done a lot of them in the past and this has been...

I've had more of a rein on this one,

so it's been my little project, really. So it's been really good.

Really enjoyed it.

A great result in Margate, there.

So, will it be the same story here in Corby,

where earlier I met John,

who was also hoping that the rental market would provide healthy

returns for him when he bought this four-bed, mid-terraced house?

The housing market is starting to pick up a bit and I thought it was a good time to invest.

So of all the ones you could've picked, why this one?

Just price, really.

I looked at it three or four days before the auction

and was quite impressed.

It's needing a bit of work done,

but I think there's room for an investment to make a profit.

Five months later, we've returned to find out how it all went.

I'm glad to see that John took my advice

and got rid of that wall between the kitchen and the dining room.

No expense has been spared - the finish is lovely,

with high-quality fixtures and fittings and it's

great to see that those polystyrene ceiling tiles are no more.

It was a necessity to get rid of them anyway, because they're a fire

hazard, so we had no choice other than to get rid of them.

It's been a lot of hard work and I've had some good help from friends

and family and that.

A lot of professional builders have been in, friends of mine

and they've done a great job, and it's been great to watch it from

being a bit tired looking to what it's turned out to be

so I'm really pleased with it.

But it hasn't all been plain sailing.

The biggest challenge had to be the garden - it took us

five or six skips to empty the place.

We had roots to dig out, three trees to bring down, bushes and of course

when we brought the bushes down, we had the high winds in January.

That took all the fencing out so added more to the budget,

having to replace the fences. But I'm pleased with the result,

really pleased with the way it's finished.

John is right to be pleased, it's a cracking job.

So I'm wondering if he turned out to lack handiness, as he claimed?

I done a wee bit - I was out in the garden,

helping a couple of times and knocking the walls down.

Just generally tidying up, really. But I've enjoyed it.

It's the first time I've ever done anything like this and whether I've

got the bug, I don't know - I might have, but I really enjoyed doing it.

Yes, he's got the bug, all right!

John intended this house as a rental, so is that still the plan?

I've got somebody moving in next week,

so I've got a tenant ready, which is pleasing.

We're probably going to look at the next ten years, I'd imagine,

renting it out if we can.

Possibly selling from there and dare I say, semi-retirement? I don't know!

-We'll see.

-I like John's thinking.

Now, he'd given himself a budget of between 15 and £17,000 -

how did he get on with that?

On the budget side, I went over, but we had the hidden extras to pay

for - some of the windows needed replaced, some of the exterior doors.

The fencing after the wind had blown it down in January...

It took me up to the £20,000 mark.

Oops! These things quickly add up,

but at least he stuck to his five-month timescale - just.

It took us the full five months,

in fact we only finished it about ten hours ago!

Touching up the paintwork and things like that.

A general tidy up, really,

because a lot of dust with the plastering being done.

But ten hours ago we finished, so we couldn't be much nearer!

So, yeah, happy.

So, that £72,000 sale price added to £20,000 renovations costs

come to £92,000.

Did local property experts think all that hard work was worth it?

The fittings are immaculate throughout.

The flooring, the kitchen, the bathroom,

-all the fittings are second to none.

-The finish is very, very high.

In fact, I would say he's gone a little bit over-the-top for the area

that the property was within, but the finish is outstanding.

High-class and he will get the money that he deserves for the home.

I think that the kitchen/diner is far better this way

than it would have originally been with a separate dining room.

So, we're all in agreement, then.

John has spent a total of £92,000 on this property

and he does intend to rent, but we have to ask what it could sell for.

I mean, it would be rude not to.

I would place this property for sale onto the market for £130,000

to achieve a figure very close to that.

If I was to market this property, I'd place it onto the market

for £130,000,

with a view of achieving anywhere between £125,000-130,000.

Yeah, pleased with that. That's a good profit.

I mean, the amount of work we put into it, I think it's a

realistic price. That's round about what we thought, anyway.

Even that lowest estimate would give John a potential profit

of £33,000,

minus the usual taxes and expenses.

But as he already has a tenant lined up,

what do our experts think he could achieve on the rental market?

For rental, I would place this property onto

the market at between 625 and £675 per calendar month.

I think the landlord could achieve on the rental market

anywhere between 625 and £675 per calendar month.

At the lowest figure,

that would give John a healthy yield of 8%.

Yes, that's fair enough.

I've got a tenant moving in very shortly who's offered more money than

that, so I'm quite pleased with those sorts of figures.

We've got a bit more and I think the house proves it was worth a little bit more.

Yes, that high-end finish has obviously paid its way

by helping John to get the best possible rental income.

He's done well, with his first foray into the property market.

I'm very pleased with it.

A lot of people, friends and family, put a lot of hard work into it

and a lot of efforts have come to show

we've got a nice wee property here and I'm very, very pleased.

Very pleased.

That's great to hear. Will he be going back to the auction, then?

Yes, I think I've got the bug now!

I've really enjoyed doing this and I'm looking at a couple of houses now

in the three-bedroom, two-bedroom range.

They're at auction as well, so you never know!

I think I've got the bug!

So join us next time for more auction ups and downs.

Yes, from bungalows to basements to building sites...

-It's all here on Homes Under The Hammer.

-See you next time.

-Goodbye.

-Goodbye!