Episode 30 Homes Under the Hammer


Episode 30

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Transcript


LineFromTo

Hello and welcome to the show.

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We're always being told you need to save for the future.

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That's even more true these days.

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Because people are looking to supplement their pensions.

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Yes, and property can be a very attractive option.

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So there is a bit of a stampede to the auction rooms.

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If you're like us and you're hoping property will be a safe investment,

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you've got to make sure you buy wisely.

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And that means doing your research to seek out the bargains.

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So is that what happened to the buyers on today's show?

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Let's find out.

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First up, in Derby, I discover some devilish DIY short cuts.

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You can't reach it with a spanner, so what do you do?

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You take the bricks out of the wall.

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But in London, I find some heavenly inspiration.

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You know what, this flat is a miracle waiting to happen.

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And in Wales, a brave man lives for the moment and takes a chance.

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When the hammer went down, I though, oh, yeah. What do I do now?

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All these properties have been sold at auction.

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

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when they went under the hammer.

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Well done, sir. It's yours.

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I'm in Cotmanhay in Ilkeston, Derbyshire.

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And this is the Erewash Canal. Absolutely beautiful.

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And great news, the property I'm here to see is just over there.

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This picturesque canal was completed in 1779,

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transporting goods in and out of this industrial area,

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known for its coal mining, steel works and textiles industry.

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Today, having avoided closure, it's been preserved

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and developed into this scenic waterway.

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While its industrial use is in the past,

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it's now a great amenity, providing a wonderful place to

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cruise along in your boat and enjoy lovely walks along its banks.

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Sharing its peace and quiet with your new feathered neighbours.

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So, great location. What about the property itself?

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Well, 40,000-plus was the guide price.

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And it's this little sort of terraced cottage.

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Not sure I like the outside.

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OK. Well, nice little front room area here.

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Open fire. That would be absolutely beautiful.

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Especially on a freezing cold day like today.

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I like those original beams.

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I think they are original. I'd like to see them stripped back.

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But they certainly give a kind of cottage-y feel to the place.

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What's that?

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That is outstanding.

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Perfect!

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Bit of Heath Robinson design to stop the draughts coming in through

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the front door. And when you've done that, you can just...

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Oh, I suppose I have to do that first. OK, put that back.

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I think it's... Here we go.

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Absolutely superb.

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Right, um...

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HE LAUGHS

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I'd like to somebody who would keep that but I don't think they will.

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A few signs of damp here and there.

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And I guess the floors are solid. I doubt there's a damp proof course.

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So you are going to have to factor that into your renovation costs.

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I've already started looking at this place with rose-tinted spectacles.

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I don't care about the damp. I'm charmed by the little thing by the front door.

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I like the fact it's got an open fire. The back area here,

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it's the kitchen. It's got stairs up to the bedrooms.

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It's small but a rustic little kitchen in here,

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replacing the units that are here at the moment,

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and you've got the makings of a real charming little place.

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# I-I-I-I'm hooked on a feeling. #

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There are some feelings that just can't be explained.

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Undeniably, there is a lot of work to be done here,

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but the place has got my attention.

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So, upstairs. And even these are quite cute.

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HE LAUGHS

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That is a classic of needs must.

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This little drain plug at the bottom of the hot water cylinder.

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You can't reach it with a spanner so what do you do?

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You take the bricks out of the wall.

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Course you do! Practical solutions to real problems.

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# All in all you're just another brick in the wall... #

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Oh, dear. Not the cleverest way to get the plumbing sorted.

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But my semi-crush on this property forbids me to be too critical.

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Will the upstairs plant some seeds of doubt?

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The good news is, the bathroom is at least upstairs.

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The bad news is, it's not really ideal, is it?

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You've got this little shower area there.

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And then this raised wooden platform on which the toilet sits.

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And there's a little hand basin there.

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I think that's going to limit what you could do here.

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You'd like to have a bath somewhere.

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But I think you're really limited by space.

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But, you know, it's a small cottage.

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Small, yes. Full of character, absolutely.

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What treasures await us outside.

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Well, the back of the property, it's in a bit of a state.

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But nice surprise. A brick-built outbuilding.

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It's not actually attached to the house.

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So that kind of limits its use. But a great little shed.

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Or possibly you could put some kind of roof in between the house

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and that, and then turn it into a utility room.

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Either way, for a small cottage like this,

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a nice additional bit of space. And likewise with the garden.

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You don't expect that. It's lovely. It goes right back there,

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although you can't quite see where the end is cos of all the foliage.

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But it's big. Love it.

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Leaving aside my obvious soft spot for this house,

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at a £40,000 guide price it's a property with huge potential.

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Every inch of this cottage has something to

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offer for first-time buyers, landlords and investors alike.

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Or is that my heart speaking?

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A man sure to use his head is the auctioneer who sold it.

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He came along to run his experienced eye over this little beauty.

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The property that we're in is a typical terraced house.

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It's not large.

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Thankfully the upstairs goes over the entry at the sides

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so you've got a bit more space up there.

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But this has been rented out for many years.

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It's not been particularly well maintained.

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So obviously there are traits of neglect in it.

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It's very tired and it needs a thorough make-over.

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My estimate in what you'd have to spend on this to bring it up

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to a good, modern standard would be

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probably in the order of £15,000 or £16,000.

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Hmm. £15,000 is no small change.

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Assuming you got it for anything like that guide price

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of £40,000, would an investment of 55,000 be justified?

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I would say, on today's market, it would have a

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value of around 60,000 to £65,00.

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You need to be a little bit careful about your spend on it.

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Because there is a ceiling value for a property in this area.

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Hmm. So it's tight. Potentially a £10,000 return is available.

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But a little over the guide price, a little over on the refurbishment,

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and there's isn't much of a profit left.

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Could you get a better return by renting it out?

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Once renovated, this would have a rental value of between 425

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and £450 a calendar month.

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Well, £40,000 doesn't buy you much in the property world in 2013.

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Apart from here, where it could buy you the most charming little place.

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Let's see who fell in love with it when it went under the hammer.

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Start me on this one where you like. I'd say 38 again for it.

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Lot 54. Start me where you like.

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Thank you. £35,000.

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At 35,000. 36 someone else? 35 is the opening bid. 36 I've got here.

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36. 37 is bid at the back.

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37. 38.

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At 38. 500.

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38.5. 39.

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39.5. 40,000.

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40,000. At 40. And a half again.

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It's going to go at £40,000. You're out in front of me.

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At 40,000 once.

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£40,000 twice. Third opportunity.

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Sold at 40,000. Thank you.

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The successful bidder getting the cottage at bang on the guide

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price was Wallace.

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He came along to meet me with one of his three children, Karen.

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She'll be helping him renovate the property,

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which he's bought to add to his pension.

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Wallace, Karen, great to meet you both.

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-Congratulations.

-Thank you.

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This is a great house for £40,000, isn't it?

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Mm-hmm. Yeah. Hopefully got a bargain but...you know...we'll have to see.

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Well, it's charming. I loved it the moment I walked in.

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It needs a bit of work but it just has that something, doesn't it?

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We felt the same, didn't we, when we first saw it.

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We just liked the area. And all the neighbours came out

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when we were waiting for the estate agent.

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They were so friendly. We had a little walk to the canal

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and just thought it was a beautiful little spot.

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It's got a nice feel about it.

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Yeah, without a doubt. So why did you want to buy it?

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It's an investment, really. Just something for me to do up.

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A bit of a hobby, if you like.

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-How about you, Karen?

-The same.

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I've got two houses and we've done them up, haven't we?

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One similar to this.

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So, between us, we've probably managed at least

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-houses in as bad a state as this, haven't we?

-Well, yeah.

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So a bit of experience on both Wallace and Karen's parts.

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Which should certainly help them get the most from this property.

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

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First of all, we've got to put a new fire in. That sort of thing.

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Get rid of the beams. Cover them up.

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These beams, don't you think they're original?

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-No, I don't think so. No.

-They add a bit of character, don't they?

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I think so, but you disagree, don't you?

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-Yeah.

-I quite like them.

-I do, but...

-Yeah.

-You don't, do you?

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You hate them.

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-Yeah.

-Why do you hate them? What is there to hate about them?

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I think beams are more suited to cottages. Not to...

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Don't you think this is a cottage? I think this is a cottage.

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-Not to a mid-terraced house.

-I think this is a little cottage.

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-Do you?

-Yeah. Sort of. It's like a lock keeper's cottage, isn't it?

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-Yeah.

-I think they're nice, but we'll wait and see.

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-Yeah.

-At the moment, they're definitely going.

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I think that's the first thing you're going to get rid of.

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HE LAUGHS

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OK.

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Karen and Wallace will battle it out about the beams.

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But in the meantime, they plan to replace the bathroom,

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the central heating system and boiler.

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And of course, a total redecoration.

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They seem pretty confident about tackling this house.

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But don't forget, margins in this property could be quite tight.

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So I hope they've taken that into account.

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What's the budget for all the work?

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-We've got a budget of ten grand.

-OK.

-Hopefully that will do.

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There's a little bit damp that has to be seen to.

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But not a great lot. That shouldn't cost too much. But there is a bit.

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The bulk of the spending will be the kitchen,

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the bathroom and the new boiler.

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-What about how long it's going to take?

-About six weeks.

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Not a lot of time, with such a long list of jobs to complete.

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But with a solid budget of £10,000, it will surely give them

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a very good chance.

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So the idea is to rent it out then, is it?

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At this moment in time, yeah. Unless we make a fantastic profit.

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But, you know.

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What kind of profit would tempt you to sell, do you think?

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Anything, say, 15 to 20.

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# What about Daddy Cool? #

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Wallace is being quite cool about his wait and see approach.

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In the meantime, he has something else in his diary.

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-You've got a trip to New Zealand?

-Yes. Yeah.

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-My son lives in Christchurch so...

-Right.

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I'll go and see him for a month or so, you know.

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-Wow.

-Yeah.

-Nice. You want to get it done before that?

-Yeah.

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Yeah. That's the idea. Yeah.

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Then when I'm away they'll be getting someone in here.

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-Good. Listen, congratulations. Good luck with it.

-Thank you.

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-Nice to meet you.

-Thank you very much.

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-I look forward to seeing how you get on.

-Thank you.

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# Daddy, Daddy Cool... #

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So, a good purchase for father and daughter team, Wallace and Karen.

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Will those beams be here when we come back?

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Jury's out. You can find out later in the show.

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You couldn't get more of a contrast to that charming waterside terrace

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than here in Hammersmith, West London.

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It's right at the heart of city life, with plenty of tube lines

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and road links. And house prices here, well, I think you know

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what I'm going to say, are on the rise.

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And actually, about a mile from the centre of Hammersmith, you can

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find the odd charming terrace.

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Isn't that lovely?

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Now, look to your right. Yes, that's where we're going.

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The 1960s block. Sorry.

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The property I'm here to see is a studio flat.

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I have a guide price of £160,000.

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I know that sounds like a lot of money for a studio flat, but not when

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you're in pricy Hammersmith where the average flat costs around 474,000.

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Let's head inside and see what you get for your money.

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It's on the fifth floor so I hope there's a lift.

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# You raise me up

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# So I can stand on mountains... #

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Ah-ha, yes, there's a lift.

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And a newly modernised one by the looks of it.

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More about that later.

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'Doors closing.'

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This might not be the prettiest of buildings,

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but purpose-built blocks like this do provide a more affordable

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alternative for people who want to live in the city.

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Being so high up, love it or hate it,

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it's exactly as I would expect on the inside.

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Needs a bit of work.

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You've got your bathroom here, and off to right, the kitchen.

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Now this has taken me by surprise.

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I would not have expected a kitchen this large in a studio flat.

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But I'm just wondering how big the lounge-sleeping area is.

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Lovely! A kitchen to shout about.

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But it's clear already that a bit of modernisation is going to be needed.

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New kitchen units for a start.

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There is double glazing and central heating.

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# I'm living in a box

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# I'm living in a cardboard box... #

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Well, this is how you can make your money.

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You've got to think outside the box with this studio flat.

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I actually think you could turn this into a one-bedroom flat.

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Look at all this space out here.

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It's not a lot of space, but it's certainly enough to house a kitchen.

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I would block up this area here.

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Put another little doorway in through here.

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And you could have all your kitchen units...

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Knock this out. All the kitchen units housed along this back wall.

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You could then use the kitchen as a bedroom,

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because you can go right the way as far back as this wall.

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The bed can all be house in this little alcove here.

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I really believe this room can take it. It's huge.

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It's got a fantastic view of London on the other side.

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You know what, this flat is a miracle waiting to happen.

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# I believe in miracles... #

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OK, so maybe miracle is going a bit far.

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But the space in this property has been a great surprise to me.

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As well as its very reasonable £80 per month service charge.

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One should also remember that its lease-hold status means any

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structural changes will need permission of the free-holder.

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And of course, you'll have to do the maths on where the fairly big

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structural changes, like moving the kitchen,

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would actually make you any money.

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I know there's a strong rental demand here.

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And I think this flat would fly off the shelves.

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But it's all about the money. Do the figures add up?

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Let's say you buy for around the guide price of £160,000.

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You spend ten grand on renovations. And you rent for £860 per month.

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That would give you a return of 6%. Not bad at all.

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And that's as a studio flat.

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If you did create a separate bedroom here then that yield could

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increase to 7%.

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Well worth doing for that extra five grand that it would cost to do

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the renovation.

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It's great that the rental income works here.

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As unfortunately, capital growth will always be

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limited by the stigma of purpose-built blocks.

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# Oh Sussudio... #

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Well, if you've got a fear of heights,

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this might not be the flat for you.

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But if, like me, you love a good London view, that is epic.

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How I love a good old view. And that's really a cracking one.

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And I've got more positive news to report about this property.

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I know this might not be the most attractive of buildings, but the

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good news is that there are plans to improve the exterior and

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the communal parts over the next few years.

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Modernisation of the lifts has already taken place.

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And there are further plans in 2017 and 2018 to overhaul the windows,

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improve the lighting and repair and redecorate the block.

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So, if you look at this property in the long term,

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it could be a good place to put your money.

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Lots going for it then, as long as purchaser doesn't mind heights.

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Time to find out what a local property expert thinks.

0:18:150:18:18

# Send me to work in tall buildings... #

0:18:190:18:22

Having had a look around this property,

0:18:240:18:26

at the moment it is laid out as a studio flat.

0:18:260:18:29

There is the potential to turn this into a one-bedroom flat.

0:18:290:18:32

Which is, without a doubt, far more saleable, far more lettable,

0:18:320:18:37

and you're going to get a much better price

0:18:370:18:39

when you come to resell or rent it.

0:18:390:18:41

There you go, we are in total agreement on that one.

0:18:420:18:45

But let's look at the numbers.

0:18:450:18:47

What would a refurbished studio flat resell for?

0:18:470:18:50

If I was to post this on the open market as a studio flat,

0:18:500:18:54

once it's been completely renovated to a fairly high standard,

0:18:540:18:57

I would expect to market it around about £230,000.

0:18:570:19:01

And what if you decided to splash the cash

0:19:010:19:04

and make it a more desirable one-bed flat?

0:19:040:19:07

If I was to sell this as a one-bedroom flat tomorrow,

0:19:070:19:10

once it's been renovated, I would put it on the market for £260,000,

0:19:100:19:15

looking to achieve just under the £250,000 stamp duty threshold.

0:19:150:19:20

# I'm going to work in tall buildings... #

0:19:200:19:25

Small and perfectly formed?

0:19:250:19:27

Mm, I wouldn't quite describe the flat like that just yet.

0:19:270:19:30

But it could be, after some hard work.

0:19:300:19:33

But perhaps a little re-jig with that layout...

0:19:330:19:36

Let's head to the auction

0:19:360:19:38

and find out who had their sights set on the studio.

0:19:380:19:40

I'd like to kick off on this, I don't know, 140.

0:19:410:19:45

140 down here. 145.

0:19:450:19:48

140. First time. Second time.

0:19:480:19:52

Third and last time.

0:19:520:19:54

145. 150. Behind you, 150. 150.

0:19:540:19:59

155.

0:19:590:20:01

160. 160.

0:20:010:20:03

165.

0:20:030:20:04

170.

0:20:040:20:07

170. 175. 180.

0:20:070:20:10

Have a think. 175.

0:20:100:20:12

I'll take a thousand. 176 now.

0:20:120:20:15

If not, 175 down here.

0:20:150:20:18

First time. Second time.

0:20:180:20:20

Third and last time. Are you all done?

0:20:200:20:23

Sold. 175.

0:20:230:20:25

Getting the property in their first auction was Jonathan and Dorothy,

0:20:270:20:31

who secured the flat for 175,000.

0:20:310:20:35

They both have a background in education. Dorothy is retired now.

0:20:350:20:40

But Jonathan is a school vice principal.

0:20:400:20:43

Let's find out if they've done their homework on this property.

0:20:430:20:47

# Let this be a lesson to you... #

0:20:470:20:51

-Jonathan and Dorothy, congratulations. BOTH:

-Thank you.

0:20:510:20:54

What I want to know is, how much did you want to buy this flat at auction?

0:20:540:20:57

Was this the only property you wanted?

0:20:570:20:59

No, there were two properties we were interested in at the auction.

0:20:590:21:02

The first one was one of the earlier lots and it went way,

0:21:020:21:05

way over the guide price. So we're actually quite surprised

0:21:050:21:08

that we managed to get this one at all.

0:21:080:21:10

But we were quite keen on it.

0:21:100:21:12

We've been to see it twice before the auction.

0:21:120:21:14

We were very happy in the end that we got it.

0:21:140:21:16

Dorothy is going to be the one getting her hands dirty

0:21:160:21:19

on this project. But having taught and raised four children,

0:21:190:21:22

it's most definitely a step in a new direction.

0:21:220:21:26

I've been teaching since I left college. I finished in summer.

0:21:260:21:32

I taught home economics, and food and nutrition.

0:21:320:21:35

I'm sort of...

0:21:350:21:38

Having lost my children, they've flown the nest,

0:21:380:21:40

I've decided to do something different.

0:21:400:21:42

How do you feel about your kids having flown the nest?

0:21:420:21:44

It's taken a little bit of getting used to.

0:21:440:21:46

-Really?

-Yeah.

-So you need this to fill your time?

0:21:460:21:49

-I do. I do.

-And it certainly will. THEY LAUGH

0:21:490:21:52

Of course, the time it takes will depend on just how much

0:21:520:21:55

Dorothy decides to do.

0:21:550:21:57

Have these first time developers seen the potential of this property?

0:21:570:22:01

I know exactly what I would like to do.

0:22:010:22:04

But what are you two going to do here?

0:22:040:22:06

We're going to try and make it into a one-bedroom flat.

0:22:060:22:09

Fabulous. Tick! Yeah, well done.

0:22:090:22:12

-We had a couple of plans, didn't we?

-Yeah.

0:22:120:22:14

Plan A - we were wondering

0:22:140:22:16

whether the kitchen could actually be a bedroom.

0:22:160:22:18

But then when we came back and measured it up,

0:22:180:22:21

we thought maybe, maybe not. But in here, it's fairly sizeable.

0:22:210:22:25

So I think there's probably scope here to actually get a bedroom.

0:22:250:22:28

There is more than one way of looking at a property.

0:22:280:22:31

But I still think they should get those tape measures out again.

0:22:310:22:35

But they are on the right lines.

0:22:350:22:37

The other thing to think about with this flat is you get

0:22:370:22:40

past its rather unappealing exterior.

0:22:400:22:42

It is not the most attractive of buildings.

0:22:450:22:47

How are you going to draw in the tenants or the potential purchasers?

0:22:470:22:52

When we see the estate agent, we will ask them

0:22:520:22:56

to take as many photographs as possible of the inside of the flat.

0:22:560:23:00

Because we are doing it up to a high standard, we'll hope that will

0:23:000:23:03

wow the prospective buyers and so they'll hopefully not be too worried

0:23:030:23:09

about the outside and concentrate on the inside of the flat.

0:23:090:23:12

# I am beautiful no matter what they say... #

0:23:120:23:16

Another tick from me there.

0:23:180:23:20

And more marks for a sensible budget of 10,000.

0:23:200:23:23

And a timescale of three months.

0:23:230:23:25

They are both keen DIYers and have sorted out who is doing what already.

0:23:250:23:30

-You're going to be doing all the painting and decorating.

-Yes.

0:23:300:23:34

-Jonathan, you're going to be doing the building.

-Yep. Yeah.

0:23:340:23:37

And a bit of plumbing as well. Any plastering, I can do that.

0:23:370:23:41

Any electrical work, we'll have to get someone in.

0:23:410:23:44

But otherwise, you know,

0:23:440:23:45

we'll probably do most of the work ourselves.

0:23:450:23:48

It's going to be five minutes away from your school,

0:23:480:23:50

which is going to be so handy if you ever want to nip back here.

0:23:500:23:53

Yeah, don't tell the boss that though.

0:23:530:23:55

THEY LAUGH

0:23:550:23:56

What was the point of your guys buying this flat?

0:23:560:23:59

Is this purely an investment opportunity to flip, to sell on?

0:23:590:24:02

Or would you like to rent it out?

0:24:020:24:03

We'd like to sell it on.

0:24:030:24:06

And then we can buy another one at another auction,

0:24:060:24:08

and repeat this procedure later on in the year.

0:24:080:24:11

I'm really excited to see how it all turns out.

0:24:110:24:14

-Congratulations and well done.

-Thank you very much.

-Thank you.

-Thank you.

0:24:140:24:17

Jonathan and Dorothy are good at teaching,

0:24:170:24:20

but will they be as adept at learning with their first investment property?

0:24:200:24:25

Let's hope they make the right decisions and a profit will be

0:24:250:24:28

made at the end of all this hard work.

0:24:280:24:31

Join me later on in the show and we'll reveal all.

0:24:310:24:34

Still to come...

0:24:360:24:37

In Wales, the perfect property...if you want to shed a few pounds.

0:24:370:24:41

Oof! It would certainly keep you fit living in this house.

0:24:410:24:46

And down in Hammersmith, West London, did Jonathan

0:24:480:24:51

and Dorothy make a few pounds?

0:24:510:24:53

It's not bad, is it?

0:24:530:24:54

We return to Ilkeston in Derbyshire now where, earlier,

0:25:010:25:05

I met father and daughter team Wallace and Karen.

0:25:050:25:08

Wallace bought this two-bedroom terrace for £40,000.

0:25:080:25:13

And Karen, she was going to lend some moral support.

0:25:130:25:16

And boy was Wallace going to need it.

0:25:160:25:19

Because, although the house was in a lovely setting,

0:25:190:25:21

it really did need the works.

0:25:210:25:24

However, I thought this house had bags of charm.

0:25:240:25:27

It had some fairly quirky features, some of which I hated,

0:25:270:25:31

but then, there were things I loved.

0:25:310:25:35

These beams, don't you think they're original?

0:25:350:25:37

-No, I don't think so. No.

-They add a bit of character, don't they?

0:25:370:25:41

-I think so, but you disagree, don't you?

-Yeah.

-I quite like them.

0:25:410:25:46

-I do, but...

-Yeah.

-You don't, do you? You hate them.

0:25:460:25:49

In the end, family commitments meant Karen had to reluctantly take

0:25:520:25:57

a back-seat. Wallace certainly knew what he wanted.

0:25:570:26:00

Although, when it came to the issue of whether to rent or resell,

0:26:000:26:04

he seemed less sure.

0:26:040:26:07

-So the idea is to rent it out then, is it?

-At this moment in time, yeah.

0:26:070:26:11

Unless we make a fantastic profit. But, you know.

0:26:110:26:15

What kind of profit would tempt you to sell, do you think?

0:26:150:26:18

Anything say from 15 to 20.

0:26:180:26:21

Wallace had a holiday to New Zealand planned, to fit around this project.

0:26:210:26:27

For which he had a budget of £10,000

0:26:270:26:29

and a timescale of six weeks for the work.

0:26:290:26:32

Well, nearly six months later, we're back.

0:26:320:26:35

Wallace wanted to keep himself busy.

0:27:010:27:04

And given the long list of jobs completed, he has.

0:27:040:27:07

The kitchen is obviously a totally new kitchen.

0:27:070:27:10

All the walls have been plastered.

0:27:100:27:12

Ceilings have been done.

0:27:120:27:14

New fire. Carpets throughout. New windows and doors.

0:27:140:27:19

It wasn't on the original budget but, you know.

0:27:190:27:22

Outside work, obviously the bit of wall at the front.

0:27:220:27:26

The chimney was repaired. The garden done.

0:27:260:27:29

I can't really think of...

0:27:290:27:30

I'm sure there's a load more that we've done

0:27:300:27:33

but I can't think of them just at the minute.

0:27:330:27:36

I'm not surprised, Wallace. A thorough job done throughout.

0:27:360:27:40

And to, clearly, a high standard.

0:27:400:27:42

There are many things to admire about what's been achieved here.

0:27:420:27:45

Nowhere more so than in the bathroom.

0:27:450:27:48

This is the room where most of the work had to be done.

0:27:480:27:52

The sink was in the corner there, we had to take the sink out of there.

0:27:520:27:56

Put the boiler in there.

0:27:560:27:58

The shower, that whole cubicle had to be taken out and a new one put in.

0:27:580:28:03

Heating, new floor. Had to take the old platform out that was in here.

0:28:030:28:08

The raised floor, took that out. Replaced it with a lower floor.

0:28:080:28:11

Obviously a new suite in here.

0:28:110:28:13

Radiators, pipes, tiles, everything else,

0:28:130:28:17

all the old chipboard off the walls that was on it.

0:28:170:28:21

It was really old-fashioned, you know.

0:28:210:28:25

I've never seen a bathroom like it in my life

0:28:250:28:29

and I hope I never see one like it again.

0:28:290:28:32

You may never have to one again like it, Wallace,

0:28:320:28:35

but on Hammer, I've got a funny feeling I will.

0:28:350:28:37

He might be relieved about having got that bathroom challenge

0:28:390:28:43

sorted, but it wasn't the only one.

0:28:430:28:45

The main challenge with the house, obviously it's an old house.

0:28:470:28:51

Nothing is square, nothing is level.

0:28:510:28:54

It's very difficult to get things to fit properly.

0:28:540:28:57

Wallace also underestimated the level of damp in the house.

0:28:570:29:01

Which didn't do his schedule or budget any favours.

0:29:010:29:05

With the budget being stretched,

0:29:050:29:07

it meant not everything in the plan could be achieved.

0:29:070:29:09

With the brick building, eventually we'll turn it into a utility room.

0:29:110:29:15

To do it now would have put us way over the budget,

0:29:150:29:17

so we've just left it for now.

0:29:170:29:19

Wallace might have discovered more work than he expected,

0:29:190:29:23

but there was also a very pleasant surprise.

0:29:230:29:26

The garden was overgrown. I didn't realise there was a patio there

0:29:270:29:30

until we started to clearing it.

0:29:300:29:32

Then, all of a sudden, we found a patio. Cleared it all out.

0:29:320:29:36

Put a new fence up. Returfed it. Jet-washed the patio.

0:29:360:29:39

And that's how it is at this minute in time.

0:29:390:29:41

But there's still work to be done there, as well.

0:29:410:29:44

It's 100% better than it was.

0:29:440:29:46

I reckon it's closer to 110% better, Wallace.

0:29:460:29:50

But that looks like an awful lot of work.

0:29:500:29:53

And he hasn't stinted on the finish.

0:29:530:29:55

So could it really have come in on Wallace's budget of £10,000?

0:29:550:30:00

We initially set out 7,000 to 10,000. But it was about 10,500.

0:30:020:30:07

We have gone over but not drastically.

0:30:070:30:11

I think Wallace has done really well for that money.

0:30:110:30:13

However, his timescale of six weeks has taken a bit of a slide

0:30:130:30:17

to six months.

0:30:170:30:19

And it turns out the list of things he had to do outside the project

0:30:200:30:25

was pretty long too.

0:30:250:30:27

Just before Christmas I had to have a hernia operation,

0:30:270:30:31

and I was out for six weeks. So that was a bit frustrating,

0:30:310:30:35

cos you're thinking what you could be doing here and what have you.

0:30:350:30:38

Went to New Zealand for a month.

0:30:380:30:40

Came back from New Zealand, went to a funeral and that was another week.

0:30:400:30:46

So the last couple of weeks have been a bit frantic.

0:30:460:30:48

And after all that hard work, is Wallace hoping to sell or rent?

0:30:480:30:53

I'm leaning more to renting than selling.

0:30:550:30:59

But if someone wants to give me a shed-load of money, well,

0:30:590:31:02

I'll gladly take it off them.

0:31:020:31:04

That is the name of the game, Wallace.

0:31:040:31:06

With his purchase price of £40,000 added to his £10,500 refurbishment,

0:31:060:31:13

Wallace has invested just over £50,000 in this property.

0:31:130:31:17

This was a place where margins were quite tight.

0:31:170:31:20

With a resell value reckoned to be around the £60,000-£65,000 mark.

0:31:200:31:25

I can't imagine Wallace could have done any more to this house.

0:31:260:31:29

What did two local estate agents think?

0:31:290:31:32

This is the first time I've been to the property

0:31:320:31:34

since it was refurbished.

0:31:340:31:35

I think it's been done to a really good standard throughout.

0:31:350:31:39

I think the property is finished to a high standard.

0:31:390:31:42

There is a high demand for properties like this.

0:31:420:31:44

You are looking towards the investor market that can immediately

0:31:440:31:47

rent it out. But also, the first-time buyer market

0:31:470:31:49

is incredibly strong at the minute.

0:31:490:31:51

So I don't think it would take long to sell.

0:31:510:31:53

So, clearly impressed with Wallace's achievements.

0:31:530:31:56

But how does that translate in terms of value?

0:31:560:32:00

If this property was to be placed on the market in its current condition,

0:32:010:32:04

I would recommend an asking price between £80,000 and £85,000.

0:32:040:32:08

If the owner of the property was to sell, we would put

0:32:080:32:11

the property on the market at £85,000 to achieve £80,000.

0:32:110:32:15

Hmm. That's a little more than I was expecting.

0:32:150:32:21

But, yeah, that's good. I like that.

0:32:210:32:23

You might like it, Wallace, but I love it.

0:32:230:32:27

A profit of almost £30,000 is no mean feat.

0:32:270:32:30

Will rental estimates bring more good news?

0:32:300:32:34

If the property was to be placed on the rental market,

0:32:340:32:37

I think the owner could expect to achieve anywhere within

0:32:370:32:40

the region of 425 and 450 per calendar month.

0:32:400:32:42

I would look to put the property on the market at £425 per

0:32:420:32:46

calendar month up to £450 per calendar month.

0:32:460:32:49

They're a bit under there.

0:32:490:32:51

The going rate around here is 475. Um...

0:32:520:32:58

to 500.

0:32:580:32:59

So, Wallace has done his research

0:33:010:33:02

and thinks more can be achieved in the rental market.

0:33:020:33:05

But whether he sells or rents, this has been a great success.

0:33:070:33:11

So what advice, if any, could he hand over to would-be developers?

0:33:110:33:15

I think you've got to really look into it well, you know.

0:33:160:33:22

Make sure you know what you're doing.

0:33:220:33:24

Never, never buy it without looking at it.

0:33:240:33:27

Couldn't have said it better myself, Wallace.

0:33:270:33:30

# I know a valley... #

0:33:370:33:41

Well, there's no doubt that the valleys of South Wales

0:33:410:33:44

are spectacular. The big question is,

0:33:440:33:47

are there spectacular property bargains to be found?

0:33:470:33:52

# I know valleys of gold

0:33:520:33:58

# Sweet and fair... #

0:33:580:34:00

Well, I'm heading down into that village of Penrhiwceiber

0:34:020:34:05

to see what I can find.

0:34:050:34:09

Claimed to be one of the steepest villages in Wales, if not the UK,

0:34:090:34:12

it certainly nestles into the lush surroundings beautifully.

0:34:120:34:17

In many places, £24,000 would be the sort of deposit you might

0:34:170:34:22

pay on a three-bedroomed house.

0:34:220:34:25

But here in this part of Wales,

0:34:250:34:27

£24,000-plus was the guide price for a three-bedroomed mid-terrace.

0:34:270:34:33

From the outside, well, if you can see it, up there...

0:34:330:34:37

Looks pretty good.

0:34:380:34:39

# Down from the hillside, down to the valley

0:34:390:34:43

# Where the people all stay

0:34:430:34:44

# Down to the valley where the people all stay... #

0:34:440:34:48

Set up against the hillside,

0:34:480:34:50

the scenic backdrop gives the terrace a majestic look.

0:34:500:34:53

Hmm. Relatively new double glazed door.

0:34:550:34:57

It's a good start. A little porch, I always like that.

0:34:580:35:01

Keep the cold out. Although it could do with an internal door.

0:35:010:35:04

Then straight into a really nice sized open plan living area.

0:35:040:35:11

Nice sized windows.

0:35:110:35:12

Obviously got relatively new central heating, which is good.

0:35:120:35:15

Feels lovely.

0:35:150:35:17

I mean, not only does it feel quite deep, it feels nice and wide.

0:35:170:35:20

Which I certainly wasn't expecting. Understairs storage cupboard there.

0:35:200:35:25

Then through into the kitchen.

0:35:250:35:27

It's not bad. Perfectly serviceable.

0:35:270:35:30

The layout, I think, works for that sort of U-shape.

0:35:300:35:33

Replace the units, keep the layout pretty much the same.

0:35:330:35:36

As a starting point...

0:35:360:35:39

Well, we like.

0:35:410:35:43

Outside, you have this concreted area,

0:35:480:35:51

surround the property with a terrace above.

0:35:510:35:55

# To the left, to the right

0:35:560:35:59

# Step it up, step it up... #

0:35:590:36:02

Oof! It would certainly keep you fit living in this house.

0:36:020:36:05

So many stairs.

0:36:050:36:07

Up to it, through it and then out the back,

0:36:070:36:10

up to your little patch of garden.

0:36:100:36:12

And when you get here, something you don't see every day.

0:36:120:36:16

Looks like the lawn's actually been made of carpet.

0:36:160:36:20

DOG BARKS

0:36:200:36:22

Quite bouncy.

0:36:220:36:24

Quite hardwearing too.

0:36:240:36:26

Could almost say it's going to be quite tough. Turf.

0:36:260:36:30

DOGS BARK

0:36:300:36:32

# Who let the dogs out? #

0:36:320:36:34

Hmm. Interesting roof. Solar panels, need to look into that.

0:36:340:36:37

Anyway, back to the inside of the property.

0:36:370:36:40

So, equally spacious upstairs, he says hopefully.

0:36:420:36:45

Looking good, actually. Rear bedroom there. Not a bad size.

0:36:480:36:52

The loo, not only where it should be - as in, upstairs -

0:36:520:36:55

but in not bad nick.

0:36:550:36:57

But of refurbishment required here and there.

0:36:570:36:59

Nice little landing. Second bedroom there. That's not a bad size either.

0:36:590:37:04

And then, third bedroom here. Oh.

0:37:040:37:07

HE GROANS

0:37:070:37:08

That's a bit of a shame.

0:37:080:37:09

Looks like we've had a bit of water coming in there

0:37:090:37:12

and that's what it's created on the floor.

0:37:120:37:15

Hmm. Cos you don't know what kind of damage that's done underneath.

0:37:150:37:18

That needs checking out.

0:37:180:37:20

Apart from that, this is a good sized room.

0:37:200:37:22

And yes, the upstairs just caps it off. Literally.

0:37:220:37:27

This is everything you could want really from a three-bed

0:37:270:37:30

terraced house.

0:37:300:37:32

Well, nearly everything.

0:37:320:37:34

There's a bit of floor missing in a really important place.

0:37:340:37:38

So mind your step on your night-time visits to the loo.

0:37:380:37:42

Talking of waterworks,

0:37:440:37:45

I found something quite interesting that I was looking for.

0:37:450:37:49

Now, on the landing here, you've got an airing cupboard which

0:37:500:37:54

contains lots of good industrial stuff.

0:37:540:37:58

I love this kind of thing.

0:37:580:37:59

This does answer one slight question I had

0:37:590:38:03

about the solar panels on the roof.

0:38:030:38:05

Cos at first glance I thought, oh, are they electricity-creating

0:38:050:38:08

solar panels or are they hot-water-creating solar panels?

0:38:080:38:11

Because there are some issue with houses electricity-creating ones

0:38:110:38:16

by them entering into long-term contracts in some instances.

0:38:160:38:18

That's definitely something to check out.

0:38:180:38:21

However, what we've got here is something which

0:38:210:38:23

I understand was done by the local authority.

0:38:230:38:25

And it's basically hot water.

0:38:250:38:27

So what it's doing is supplementing the boiler here.

0:38:270:38:30

On a sunny day, it'll warm the water up,

0:38:300:38:32

which will keep your electricity bills down. Good news.

0:38:320:38:36

I love it. Who says it's not easy being green?

0:38:380:38:42

However, you do need to check out who owns the panels

0:38:420:38:45

if you buy a property with them installed.

0:38:450:38:48

Best case scenario is you own them outright when you buy the property.

0:38:480:38:52

Then all you have to do is wait on the sun coming out.

0:38:520:38:56

# Sun shine on a rainy day... #

0:38:560:39:00

OK, so it's not quite a rainy day, but definitely a bit grey.

0:39:000:39:04

So while I wait for the sun to come out, we ask a local property

0:39:040:39:08

expert to come and have a look at the property.

0:39:080:39:10

What did he think the place had going for it?

0:39:100:39:13

The property would appear to have benefitted from a local

0:39:140:39:17

council grant.

0:39:170:39:18

Specifically, there are solar panels to the roof.

0:39:180:39:21

It would appear that it's got a brand-new

0:39:210:39:23

central heating system here.

0:39:230:39:25

And some very modern glazing. Double glazing as well.

0:39:250:39:28

Overall, it's going to benefit greatly from that.

0:39:280:39:31

Boilers and windows are two of the common things that can

0:39:310:39:34

quickly affect your budget. So it's always good

0:39:340:39:37

when those things have already been done recently.

0:39:370:39:40

The property generally, other than the work carried out via

0:39:400:39:44

the council grant, is in fairly poor condition.

0:39:440:39:48

Once renovated to a fair standard, I would estimate the rental

0:39:480:39:52

potential value to be in the region of £375 per calendar month.

0:39:520:39:57

And the potential sale value to be in the region of £50,000.

0:39:570:40:00

Well, I like the location. I like the house.

0:40:000:40:03

And I like the guide price.

0:40:030:40:06

Let's see who was equally enthusiastic

0:40:060:40:09

when it went under the hammer.

0:40:090:40:11

Start me somewhere sensible. Guide at 24.

0:40:130:40:16

Start me at £20,000, will you?

0:40:160:40:17

20 I've got. Thank you. 20 I've got. And one now.

0:40:170:40:20

21. Thank you. 21. Two.

0:40:200:40:22

22. 23. 24.

0:40:220:40:24

25. 25. Right, it's 25,000 for the first time.

0:40:240:40:28

25.5. 26.

0:40:280:40:30

And a half.

0:40:300:40:31

27. And a half.

0:40:310:40:32

28. And a half.

0:40:320:40:34

29. And a half.

0:40:340:40:36

30.

0:40:360:40:38

32. And a half.

0:40:380:40:40

33. No? At 32.5 then for the first time.

0:40:400:40:44

Second time. Third and last time. 33,000.

0:40:440:40:47

33. And a half.

0:40:470:40:49

33.5? No. At 33,000. With you, sir. For the first time.

0:40:490:40:54

Second time. Third and last time. £33,0000.

0:40:540:40:58

Yours, sir. Thank you.

0:40:580:41:00

Game, set and match. With a neat serve by Darren.

0:41:000:41:03

Darren, who's from the other side of the Valleys,

0:41:030:41:06

runs a security business.

0:41:060:41:08

And this is his first time in the property game.

0:41:080:41:12

-Darren, great to meet you.

-Hello. Nice to meet you.

0:41:150:41:18

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

0:41:180:41:21

Investment purpose.

0:41:210:41:23

I've got some money sitting in the bank.

0:41:230:41:26

I always thought about looking to do some property development.

0:41:260:41:29

-So decided to go to an auction to see how it works.

-Right.

0:41:290:41:32

-This is number one, is it?

-This was number one.

-Right.

0:41:320:41:34

Yeah, this was number one.

0:41:340:41:36

-It was interesting.

-It's a good house for the first one, isn't it?

0:41:360:41:39

-Good, yeah. Not too bad.

-Yeah. What was it that appealed to you?

0:41:390:41:42

-I don't know, never saw it before.

-You didn't see it?

0:41:420:41:44

-Nope.

-How did that work out then?

0:41:440:41:46

Turned up at the auction, just wanted to see how the auction works.

0:41:460:41:50

And ended up buying it.

0:41:500:41:52

So, you didn't read the legal pack either, presumably?

0:41:520:41:55

Nope. Didn't know how the auction process works.

0:41:550:41:59

And eventually when the hammer went down I though, oh, yeah,

0:41:590:42:02

what do I do now?

0:42:020:42:04

Did you find anything nasty that you weren't expecting?

0:42:040:42:08

Yeah, there's a couple of damp patches.

0:42:080:42:11

And a hole just in front of the toilet.

0:42:110:42:13

Yes. So this is the first time you've seen it today?

0:42:130:42:15

-Yes.

-So what do you think?

-Um, yeah, bit of work to do.

0:42:150:42:19

HE LAUGHS

0:42:190:42:20

It'll be interesting. Looking forward to it.

0:42:200:42:23

Interesting? Believe me,

0:42:230:42:26

buy a property sight unseen and things could get interesting fast.

0:42:260:42:30

And not in a good way.

0:42:300:42:32

Darren was lucky to get away with what looks like just a few

0:42:320:42:36

damp patches. You might not be.

0:42:360:42:38

But it probably takes a lot to faze Darren.

0:42:380:42:41

He's run a security business for the last 21 years.

0:42:410:42:46

What kind of security do you do?

0:42:460:42:48

We work in the film industry and event industry,

0:42:480:42:51

from crowd management to the sporting industry.

0:42:510:42:54

What did you do before you were in the security industry?

0:42:540:42:56

I was in the army for 11 years.

0:42:560:42:58

Yes, that may explain a lot of his cool, calm demeanour.

0:42:580:43:01

So has he got his battle plan worked out?

0:43:010:43:04

Put a new kitchen in. New bathroom suite.

0:43:040:43:07

Tidy the back up.

0:43:070:43:09

Basically strip everything back to the bare wood and do a re-plaster.

0:43:090:43:14

Darren has a budget of £6,000 to £8,000.

0:43:140:43:16

And a timescale of six to eight weeks.

0:43:160:43:18

-Then once it's done, rent it out?

-Yeah.

0:43:180:43:21

Any idea what the rentals around here are?

0:43:210:43:24

I've been looking this morning. Anything between 320 to 390

0:43:240:43:29

-is the sort of budget that's happening.

-Right.

0:43:290:43:32

So anything between that, I'll be quite happy with it.

0:43:320:43:34

So how is Darren feeling about his first auction experience?

0:43:380:43:42

Is this the first of many or...?

0:43:420:43:45

I'm going to see how this one goes.

0:43:450:43:47

If it's successful then yes, I'll look at investing some more.

0:43:470:43:51

-But buy from the auction, perhaps.

-Buy from the auction but, yeah,

0:43:510:43:54

I think I'll go to view the property and read the legal pack.

0:43:540:43:57

LAUGHTER

0:43:570:43:58

-And yes, back to auction.

-Good.

0:43:580:44:00

-Listen, congratulations.

-Thank you.

-Good luck with it.

-Excellent.

0:44:000:44:04

-I look forward to seeing how you get on.

-Excellent.

0:44:040:44:06

Well, Darren seems to have been fairly lucky with this house.

0:44:060:44:11

Not seeing it beforehand, not reading the legal pack...

0:44:110:44:14

-HE LAUGHS

-Oh boy!

0:44:140:44:16

Anyway, yes, it's a good house.

0:44:160:44:18

He's got the right plans for sorting it out.

0:44:180:44:21

And hopefully it will be a successful start

0:44:210:44:24

to his property investment portfolio.

0:44:240:44:27

How will he get on? You can find out later in the show.

0:44:270:44:29

Doing up a property always seems to take longer than you imagine.

0:44:330:44:38

-Or hope.

-There are all sorts of reasons why delays happen.

0:44:380:44:41

So, do you think our buyers have been held up or have they raced ahead?

0:44:410:44:45

Let's find out.

0:44:450:44:46

From their home in Ryslip, husband and wife team, Jonathan

0:44:470:44:52

and Dorothy, travelled to Hammersmith to survey this studio apartment,

0:44:520:44:56

which they purchased at auction for 175,000.

0:44:560:45:00

It's an exciting time for the couple as this is their first venture

0:45:000:45:05

into the sometimes treacherous world of property development.

0:45:050:45:08

Jonathan, the vice principal of a local school

0:45:090:45:12

and Dorothy, a retired home economics teacher

0:45:120:45:15

had spotted an opportunity

0:45:150:45:17

to turn this unloved duckling into a very profitable swan.

0:45:170:45:21

First important decision, what to do with the space.

0:45:220:45:26

We're going to try and make it into a one-bedroom flat.

0:45:270:45:30

Fabulous. Tick.

0:45:300:45:32

THEY LAUGH Yeah. Well done.

0:45:320:45:33

-Well, we had a couple of plans, didn't we?

-Yes.

0:45:330:45:36

Plan A, we were wondering whether

0:45:360:45:38

the kitchen could actually be a bedroom

0:45:380:45:40

but then when we came back and measured it up we thought,

0:45:400:45:42

hmm, maybe not.

0:45:420:45:43

But in here, it's fairly sizeable,

0:45:430:45:46

so I think there's probably scope here

0:45:460:45:48

to actually, you know, get a bedroom.

0:45:480:45:50

For me, deciding on this route was a masterstroke.

0:45:500:45:53

Turning it into a one-bedroom

0:45:530:45:55

would open up so many more opportunities for them

0:45:550:45:58

both in the sales and rental market.

0:45:580:46:00

Just as important was the design, because, unfortunately,

0:46:010:46:05

outside, this flat had little going for it in the looks department.

0:46:050:46:09

I think it will probably be very minimal and very up-to-date.

0:46:110:46:14

We're just going to try and do everything to a high standard.

0:46:140:46:18

To create a good spec one-bed flat the couple had a budget of 10 grand.

0:46:180:46:23

That sounded a tad ambitious to me

0:46:230:46:25

but I am more than happy to stand corrected.

0:46:250:46:29

So...?

0:46:290:46:30

The original budget was 10,000 and we've...

0:46:470:46:51

In terms of materials

0:46:510:46:53

and labour costs

0:46:530:46:55

it's been about 11,200

0:46:550:46:59

but, of that, then we have spent...

0:46:590:47:04

Well, the best part of 1,000 on sort of professional fees

0:47:040:47:08

and structural engineer,

0:47:080:47:10

building rigs and so on.

0:47:100:47:12

So, I suppose just in terms of materials and labour

0:47:120:47:14

then we weren't too far out in terms of the estimation.

0:47:140:47:17

What a transformation. Huh, wow!

0:47:240:47:27

Three gold stars.

0:47:270:47:29

Two for Dorothy and one for Jonathan.

0:47:290:47:31

It's only fair.

0:47:310:47:32

I think it was a little bit harder than we imagined, but obviously,

0:47:320:47:36

we had hiccups along the way where we had to actually

0:47:360:47:41

deal with the council and that sort of delayed us a little bit.

0:47:410:47:44

Every project has its challenges.

0:47:460:47:48

It's how you deal with them that matters.

0:47:480:47:51

Jonathan and Dorothy, I must say,

0:47:510:47:53

you've given us a very good lesson

0:47:530:47:55

in how to make the most out of a little space.

0:47:550:47:58

The main change was to put up a partition,

0:47:580:48:01

splitting the single room into two.

0:48:010:48:03

And we were quite pleased with the partition

0:48:030:48:05

because we thought rather than putting in just a straight wall,

0:48:050:48:08

we'll put something in with an alcove in it

0:48:080:48:10

so it gives more interest

0:48:100:48:12

and it looks quite good from both sides.

0:48:120:48:14

And we're pleased with the eventual bedroom.

0:48:140:48:16

It's a nice, usable space and it's ended up quite nice.

0:48:160:48:20

Quite nice? It looks fantastic.

0:48:210:48:23

Jonathan and Dorothy were keen to do as much of the work as possible.

0:48:230:48:28

So, how did this impact on their schedule?

0:48:280:48:30

We estimated two to three months,

0:48:310:48:33

and so, here we are six months later,

0:48:330:48:36

so it's more or less doubled and...

0:48:360:48:38

Um,

0:48:390:48:40

I think...

0:48:400:48:41

I think we just underestimated the time it would take,

0:48:410:48:44

given the fact that I was only available

0:48:440:48:47

for a certain amount of time.

0:48:470:48:49

Well, it's not uncommon

0:48:510:48:53

to underestimate the time it's going to take,

0:48:530:48:55

and not everyone completes the task to such a high standard.

0:48:550:48:58

What, if anything, has the process taught them?

0:48:580:49:02

I've learnt that to make more of the month

0:49:020:49:04

between buying the flat and completion,

0:49:040:49:07

to look for, uh, reputable people to help,

0:49:070:49:12

to find and source materials.

0:49:120:49:15

So, you know, we've learnt an awful lot from it

0:49:150:49:17

which we'll take with us on our next venture.

0:49:170:49:20

Good on you, Dorothy.

0:49:210:49:22

Another gold star for you and a smiley face.

0:49:220:49:25

And already looking forward to the next project. Fantastic.

0:49:250:49:29

But, with a total spend of 186,000,

0:49:290:49:33

will all their hard work have been enough

0:49:330:49:35

to ensure that this new venture will become a reality?

0:49:350:49:38

We've asked two local agents along to find out.

0:49:400:49:44

Coming back from the second visit,

0:49:440:49:45

it's a complete transformation from when I was here before.

0:49:450:49:48

The excellent place on offer has been well used by the developer.

0:49:480:49:51

He's proportioned rooms out very well

0:49:510:49:52

to make it an excellent living space.

0:49:520:49:54

The kitchen and bathroom they've put in is very high standard,

0:49:540:49:57

especially for a property at this sort of level.

0:49:570:50:01

It's nice to see. Very good job.

0:50:010:50:04

Very good job indeed.

0:50:040:50:05

And with a purchase price of £175,000

0:50:050:50:09

plus overall expenditure on transforming the place - £11,000,

0:50:090:50:14

what kind of return can our couple hope to achieve?

0:50:140:50:17

One and two-bedroom flats are high in demand at the moment

0:50:190:50:22

and there's a limited supply.

0:50:220:50:24

I would anticipate it selling very quickly

0:50:240:50:26

and I would think that it would sell for £275,000 in the current market.

0:50:260:50:30

If I was to place this property onto the market for sales,

0:50:300:50:33

then I would market it at £275,000.

0:50:330:50:39

I would expect to get offers pretty close to that.

0:50:390:50:42

We may even get in excess of asking price

0:50:420:50:44

because we are experiencing such a fantastic market at the moment

0:50:440:50:48

and I have had a number of properties

0:50:480:50:50

which have gone to best and final offers,

0:50:500:50:52

so, this could well very be another one.

0:50:520:50:56

Well, well, amazing.

0:50:560:50:59

If it sold for 275,000,

0:50:590:51:02

that would leave our first timers with a potential profit

0:51:020:51:05

nearing £90,000

0:51:050:51:08

minus the usual taxes and expenses, of course.

0:51:080:51:12

That's not bad, is it?

0:51:120:51:13

Um, no, that sounds pretty good.

0:51:130:51:16

I mean, it's a bit more than we expected initially, so, yeah.

0:51:160:51:20

-We're pretty happy with that, I think.

-Yeah, definitely.

0:51:200:51:23

And so they should be.

0:51:230:51:25

I'm thrilled for them both.

0:51:250:51:27

The couple have shown great focus and determination throughout the project.

0:51:270:51:30

Does this mean that they have now caught the property bug?

0:51:300:51:33

It would depend on the market

0:51:350:51:36

because, obviously, property prices in London are rising very quickly,

0:51:360:51:40

so we may well be priced out of the market soon,

0:51:400:51:42

so we may be forced to buy something a bit closer to home,

0:51:420:51:45

which might enable us to actually buy something a bit bigger, um,

0:51:450:51:49

and work on that...

0:51:490:51:51

at a slower pace.

0:51:510:51:54

Yes, I can confirm,

0:51:540:51:55

they have caught he property bug.

0:51:550:51:57

So, it was first time lucky for our couple in Hammersmith.

0:52:030:52:06

Will it be the same here in Penrhiwceiber,

0:52:060:52:09

in the Welsh valleys,

0:52:090:52:11

for another first timer to the auctions, Darren,

0:52:110:52:13

who owns his own security company?

0:52:130:52:16

This was his first foray into property development.

0:52:160:52:19

What was it that appealed to you?

0:52:190:52:21

I don't know. I'd never saw it before.

0:52:210:52:22

-You didn't see it?

-Nope.

-How does that work out?

0:52:220:52:24

Um, turned up at the auction,

0:52:240:52:26

just wanted to see how the auction works

0:52:260:52:29

and ended up buying it.

0:52:290:52:31

-So, this is the first time you've seen it today?

-Yes.

0:52:310:52:33

-So, what do you think?

-Um...yeah.

0:52:330:52:35

Bit of work to do. HE LAUGHS

0:52:350:52:37

So, it'll be interesting. Looking forward to it.

0:52:370:52:40

Has Darren's enthusiasm survived through a refurbishment?

0:52:400:52:44

Six weeks later, we're back to find out.

0:52:440:52:47

The main challenges of it was to get attuned to it first of all.

0:52:470:52:51

First time I've ever done anything on this scale.

0:52:510:52:53

Bought the house blind, so I didn't see exactly what it required,

0:52:530:52:56

so the day I came in then we decided what it needs.

0:52:560:53:01

So, biggest challenge was looking for tradesmen, finding them.

0:53:010:53:04

And how did the challenge to find tradesmen work out?

0:53:250:53:29

Apart from a friend of mine who is a carpenter,

0:53:300:53:32

so he came along and helped out with the...fitting the kitchen

0:53:320:53:36

and sort of helping with the bathroom side of it.

0:53:360:53:38

But, yeah, a lot of the painters, the plasterers,

0:53:380:53:42

a lot of the electricians were people who work for me on a full-time basis,

0:53:420:53:45

which I didn't realise that I have these tradepeople working for me.

0:53:450:53:49

Well, that's a stroke of luck.

0:53:490:53:51

So, with his tradesmen lined up,

0:53:510:53:53

how did Darren tackle the renovation?

0:53:530:53:56

When we come into the house,

0:53:560:53:57

we decided to do the house from top to bottom.

0:53:570:53:59

Took the kitchen out, ripped the kitchen up,

0:53:590:54:01

put a brand-new kitchen in.

0:54:010:54:02

The bathroom - exactly the same. Complete bathroom in.

0:54:020:54:05

We had a hole in the floor, hence, new floor, new bathroom suite

0:54:050:54:10

and new tiles in the bathroom.

0:54:100:54:12

There was a lot of water damage throughout the house

0:54:120:54:15

in the ceilings,

0:54:150:54:16

so we decided to redo all the ceilings,

0:54:160:54:18

replaster everything, and then at the same time

0:54:180:54:20

we decided to replaster the whole house from top to bottom

0:54:200:54:23

and hence then, fully paint it.

0:54:230:54:25

Brand-new carpet throughout.

0:54:250:54:27

And at the same time it was my father-in-law, Dave,

0:54:270:54:29

who decided to get out the back garden as he loved gardening,

0:54:290:54:32

so that was his project to take care of.

0:54:320:54:34

A lot of mattresses, a lot of carpets and laying all the grass.

0:54:440:54:48

A lot of brass objects about, old beds,

0:54:480:54:50

so we decided to take the whole garden apart,

0:54:500:54:53

take it down to the earth,

0:54:530:54:55

put a new lawn in,

0:54:550:54:56

and then we decided to put a wooden security fence around

0:54:560:54:59

to make a more enclosed area.

0:54:590:55:01

So, with his team of tradesmen and his father-in-law,

0:55:010:55:04

how did Darren's original timescale and budget hold up?

0:55:040:55:08

Initial timescale when we came first of all, was six to eight weeks,

0:55:080:55:12

however, I think once we got the tradesman on site

0:55:120:55:15

and I was overseeing the product side of it and them, um...

0:55:150:55:18

So, yeah, we managed to take it down to four weeks overall

0:55:180:55:21

from... That's start to finish.

0:55:210:55:23

And how about the original budget of £6,000-£8,000?

0:55:230:55:27

Just slightly over the £6,000 mark we've managed to complete the house.

0:55:270:55:32

And, yeah, so, quite pleased overall

0:55:320:55:34

keeping within the budget range.

0:55:340:55:36

Darren has done well on his first project

0:55:360:55:39

but how satisfied is he with the end result?

0:55:390:55:42

I'm most pleased with the overall concept of the house itself,

0:55:420:55:45

you know, from top to bottom.

0:55:450:55:46

A lot of work has been put into the house

0:55:460:55:48

and I'm pleased with ALL the house, should I say.

0:55:480:55:51

Will the appraisal of two local agents also please Darren?

0:55:520:55:56

After you've got your breath back, gentlemen.

0:55:560:55:58

There are few issues here with regard to access to the property.

0:56:000:56:03

We have a lot of steps to the front of the property

0:56:030:56:05

and quite a steep garden to the rear.

0:56:050:56:08

There's no question,

0:56:080:56:09

it will limit those who want to rent or buy this house.

0:56:090:56:12

But what are the plus points?

0:56:130:56:15

The selling point of this particular property, um,

0:56:150:56:18

are the fact that it has been refurbished.

0:56:180:56:20

It's got UPVC double-glazed windows,

0:56:200:56:23

a new central heating system,

0:56:230:56:25

a new kitchen and a new bathroom.

0:56:250:56:27

Standard of finish is very good here.

0:56:270:56:29

I mean, depending on whether they choose to sell or rent

0:56:290:56:32

this property, it's been done to a good standard.

0:56:320:56:35

The new doors have made a big difference to the potential -

0:56:350:56:37

both sale and rental of this property.

0:56:370:56:39

I think it's been a very successful development.

0:56:390:56:41

The transformation from our first visit has been quite extensive,

0:56:410:56:44

so it's pushing it into a decent sort of first-time buyer market.

0:56:440:56:48

And what kind of return could Darren expect

0:56:480:56:50

on the resale of this property?

0:56:500:56:53

I would suggest marketing it for sale at £50,000,

0:56:530:56:57

with offers in the region of £45,000 to be given consideration.

0:56:570:57:01

If this property was put to the sales market

0:57:010:57:03

I would expect a figure of no more than £50,000.

0:57:030:57:07

Those prices would give Darren a potential profit before taxes

0:57:070:57:11

and expenses of between £6,000 and £11,000.

0:57:110:57:15

My intention is to long term rent.

0:57:150:57:17

I can't see any reason why I should do the house up

0:57:170:57:20

and sell it for quick money.

0:57:200:57:22

So, therefore, my decision will stay the same,

0:57:220:57:25

it is long-term rental.

0:57:250:57:26

The rental value of this property would probably be in the region

0:57:260:57:29

of 390 to maybe £420 per calendar month.

0:57:290:57:33

I would expect to achieve up to £400 per calendar month.

0:57:330:57:37

Those rental figures would give Darren

0:57:370:57:39

a yield of between 12% and 13%.

0:57:390:57:42

It sounds very good to me, the £400 mark for rental value.

0:57:420:57:46

That's what it'd be about.

0:57:460:57:48

Well, Darren seems to have achieved his goal with this property.

0:57:480:57:51

But overall, has he learnt anything from the process?

0:57:510:57:55

Enjoy the experience, have a bit of fun doing it

0:57:550:57:57

but also do your research first before you dive in.

0:57:570:58:01

That's a lesson I've learnt

0:58:010:58:02

and it will be taken on to my next investment.

0:58:020:58:05

Well, that's it for today's show.

0:58:080:58:09

We'll have more tales of thrills and spills from the auction rooms

0:58:090:58:13

for you next time.

0:58:130:58:14

So, make sure you keep watching Homes Under The Hammer.

0:58:140:58:17

-Bye for now.

-Bye.

0:58:170:58:18

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