0:00:02 > 0:00:03Welcome to the show. Now, over the years,
0:00:03 > 0:00:05Lucy and I have met literally thousands of people
0:00:05 > 0:00:07who have decided to invest in property.
0:00:07 > 0:00:11Whatever the market's doing, whatever the conditions of the economy,
0:00:11 > 0:00:13people don't seem to lose their passion for it.
0:00:13 > 0:00:16Sometimes it's hard to keep up with all the action.
0:00:16 > 0:00:18It is, Martin, but help is at hand.
0:00:18 > 0:00:21Somebody who loves property as much as we do - Mr Dion Dublin.
0:00:21 > 0:00:24Yes, it's great to be here.
0:00:24 > 0:00:26I have been involved in property for some years.
0:00:26 > 0:00:30I've done up, I've sold, I've rented, but there are some pitfalls as well,
0:00:30 > 0:00:33as we often find out on Homes Under The Hammer.
0:00:58 > 0:01:01Well, before you buy property at auction,
0:01:01 > 0:01:03you really need to do your homework.
0:01:03 > 0:01:07And even then, sometimes you have to expect the unexpected.
0:01:07 > 0:01:10So let's see who rose to the challenge on today's show.
0:01:12 > 0:01:16First up in Croydon, south London, budgets are being squeezed.
0:01:16 > 0:01:20- Lower than £1,000.- 500 quid! - Probably about that, yeah. - Seriously? Whoa!
0:01:22 > 0:01:26In Donnington, Telford, another buyer is also feeling the pinch.
0:01:26 > 0:01:30- Have you got a budget in mind? - I'm completely skint at the moment.
0:01:30 > 0:01:31Not a lot at the moment!
0:01:31 > 0:01:36And in Derby, a substantial three-floor property boasting six bedrooms
0:01:36 > 0:01:40is going to need someone with deep pockets to get it operating again.
0:01:43 > 0:01:45All these properties have been sold at auction.
0:01:45 > 0:01:48We'll find out who bought them and what they paid for them
0:01:48 > 0:01:50when they went under the hammer.
0:01:50 > 0:01:51It's yours, well done.
0:01:54 > 0:01:57Situated in the south of Greater London,
0:01:57 > 0:02:00Croydon, it is claimed, gets its name from the crocus
0:02:00 > 0:02:04from which saffron can be harvested for culinary and medicinal purposes.
0:02:04 > 0:02:07With excellent transport links and shopping amenities,
0:02:07 > 0:02:10Croydon's property market is in excellent health.
0:02:10 > 0:02:14# Your love is like bad medicine
0:02:14 > 0:02:17# Bad medicine is what I need
0:02:17 > 0:02:18# Whoa-oh-oh... #
0:02:18 > 0:02:23Well, I'm here to see what has been listed in the auction catalogue as a two-roomed flat.
0:02:23 > 0:02:28Now, it had a guide price of £90,000.
0:02:28 > 0:02:31Now, that's not a two-bedroom flat, no,
0:02:31 > 0:02:36just a two-roomed flat so what does that actually mean?
0:02:36 > 0:02:40Better keep my eyes peeled and find out. Well, it's just up here.
0:02:40 > 0:02:43The flat is on the first floor at the end of this terrace
0:02:43 > 0:02:45and it has 73 years left on the lease.
0:02:45 > 0:02:49And this is an area that is seeing a bit of regeneration.
0:02:50 > 0:02:55East Croydon station can have you to Gatwick Airport in a little over ten minutes
0:02:55 > 0:02:57and to Victoria in less than 20.
0:02:57 > 0:03:02All music to a developer's ears! So could two rooms be tempting?
0:03:05 > 0:03:09Hmm, much smaller than I imagined inside!
0:03:09 > 0:03:15So, two rooms... Well, actually I'm counting one, two, three,
0:03:15 > 0:03:18but that's a bathroom. Very small indeed.
0:03:18 > 0:03:23In fact, this is so tiny, you'd hardly call that a bedroom.
0:03:23 > 0:03:27And just a bit of partitioning so you could get that down
0:03:27 > 0:03:29and effectively open this space up.
0:03:29 > 0:03:32Kitchen - not really, is it?
0:03:32 > 0:03:34Very small indeed.
0:03:34 > 0:03:37It's more of a sort of studio flat feel, I'd say, up here.
0:03:37 > 0:03:41You've literally just got a hob, a couple of cupboards over there.
0:03:41 > 0:03:45It feels like we're up in the eaves in a loft space, really.
0:03:45 > 0:03:47This is where it gets rather interesting.
0:03:47 > 0:03:49So I'm just going to my bedroom. Good night, everyone!
0:03:49 > 0:03:53I'm going down the stairs. That's it, this is my bedroom.
0:03:53 > 0:03:56But then I'm coming up the stairs to go to the loo
0:03:56 > 0:03:59to go back down the stairs to get into the bathroom.
0:03:59 > 0:04:03Finished all of that, back up the stairs to go back into the bedroom.
0:04:03 > 0:04:06Gosh, I'm exhausted and all I've done is get up
0:04:06 > 0:04:08and have a shower and go to the loo!
0:04:08 > 0:04:11It's not really working for me up here.
0:04:11 > 0:04:16I'm really uncertain about these floor levels. Why are they so low?
0:04:16 > 0:04:19I don't really know if there's that much going for this property.
0:04:19 > 0:04:22Oh, yes - a rather low guide price.
0:04:22 > 0:04:25# Save your money, baby
0:04:25 > 0:04:28# Save your money, baby... #
0:04:29 > 0:04:33The guide price of £90,000 is very attractive,
0:04:33 > 0:04:35but a prospective buyer not doing their homework
0:04:35 > 0:04:41or not reading the catalogue carefully could get caught out as this flat is TINY
0:04:41 > 0:04:44and it's not in pristine condition either.
0:04:45 > 0:04:48Now, are there ways we can improve it? Yes, of course!
0:04:48 > 0:04:51There are always ways to improve property.
0:04:51 > 0:04:53First of all, take a look at that.
0:04:53 > 0:04:57Now, is that just the window frame that's been put in wrong
0:04:57 > 0:05:00or is there something more sinister going on? Is it structural?
0:05:00 > 0:05:03I'd certainly get that looked at.
0:05:03 > 0:05:07Also there's a few rather odd bits and pieces lying around here.
0:05:07 > 0:05:11Now, look at this. There's an old box here with a wire going into it.
0:05:11 > 0:05:13I can't figure out what that is.
0:05:13 > 0:05:16Also, as I walked around here earlier,
0:05:16 > 0:05:21I noticed the floorboards are just a little bit spongy
0:05:21 > 0:05:24so I'd certainly get those few bits and pieces looked at.
0:05:24 > 0:05:28And again, I said earlier, this room, well, what is it?
0:05:28 > 0:05:30It could be a nursery, I suppose,
0:05:30 > 0:05:34but I think if you took down the partition walls, you opened the space up,
0:05:34 > 0:05:38you'd then have two really nice bright windows looking out onto the road.
0:05:38 > 0:05:41It would just be a much better use of space.
0:05:42 > 0:05:44I knew I could find the positives
0:05:44 > 0:05:47and all I had to was ignore a dodgy window.
0:05:47 > 0:05:49And a minuscule kitchen.
0:05:49 > 0:05:51And a mystery box.
0:05:51 > 0:05:54And a spongy floor and weird floor levels and...
0:05:54 > 0:05:57Oh, come on, Lucy, you're getting negative again.
0:05:57 > 0:05:59Well, I think it's time for a second opinion
0:05:59 > 0:06:02so we've asked along a local estate agent to see what he thinks.
0:06:02 > 0:06:08# It's getting better all the time... #
0:06:08 > 0:06:10I think the recommendation would definitely be
0:06:10 > 0:06:13to do something about the configuration of the kitchen
0:06:13 > 0:06:16and the smaller bedroom and that would make the living area
0:06:16 > 0:06:18and kitchen a much more pleasant space to live in.
0:06:18 > 0:06:22I think this flat in another area of London may sell very well
0:06:22 > 0:06:25and may actually be marketed as a two-bedroom flat,
0:06:25 > 0:06:28but being in Croydon, I think people would like a little bit more space
0:06:28 > 0:06:30and that's what the market really wants in this area.
0:06:30 > 0:06:35More space required then. And how much is that going to cost?
0:06:35 > 0:06:39The cost would probably be somewhere around the region of £20,000
0:06:39 > 0:06:41to get it up to a really nice standard.
0:06:41 > 0:06:42If the owner was looking to rent it,
0:06:42 > 0:06:44you may consider spending slightly less.
0:06:44 > 0:06:48Remember the flat had a guide price of £90,000
0:06:48 > 0:06:51so would spending a further £20,000 still make it profitable?
0:06:51 > 0:06:54Let's hear the numbers.
0:06:54 > 0:06:56If this flat was converted to a one-bed,
0:06:56 > 0:06:59it would sell for in the region of £175,000
0:06:59 > 0:07:01and if it was to be rented as a one-bed,
0:07:01 > 0:07:03it would rent for approximately £850 per calendar month.
0:07:03 > 0:07:07Ah, there you go, it certainly didn't take me very long to look around today.
0:07:07 > 0:07:09It's not the biggest flat I've seen
0:07:09 > 0:07:12and it's certainly not a two-bedroom flat.
0:07:12 > 0:07:15In fact, it is a very small one-bedder.
0:07:15 > 0:07:18But we are talking a good potential return here
0:07:18 > 0:07:22if you get it anywhere near that very low guide price.
0:07:22 > 0:07:25You know, I think the numbers could stack up on this pad.
0:07:25 > 0:07:27Let's see what happened when it went to auction.
0:07:32 > 0:07:36Right, lot 74. Hot area of Croydon, I'd invest there.
0:07:36 > 0:07:43Start 90,000, not going to go below 90. 90,000 with you. 95 anywhere?
0:07:43 > 0:07:46'The bidding started slowly, but rose steadily
0:07:46 > 0:07:50'until significantly higher than the £90,000 guide price.
0:07:50 > 0:07:54'We rejoin the bidding at £123,000.'
0:07:54 > 0:07:58123. 124 over on my left.
0:07:58 > 0:08:01If not, 123, first time, second time,
0:08:01 > 0:08:04third and last time if you're all done?
0:08:04 > 0:08:09124. 125, yeah?
0:08:09 > 0:08:12126. 127.
0:08:14 > 0:08:18There's only two bids. 127. Another go?
0:08:18 > 0:08:22If not, 126, first time, second time,
0:08:22 > 0:08:26third and last time if you're all done?
0:08:26 > 0:08:27Sold, 126.
0:08:31 > 0:08:35The successful bid of £126,000 came from Michael,
0:08:35 > 0:08:37a chef currently working in Guildford.
0:08:38 > 0:08:42Having had some previous experience in property development,
0:08:42 > 0:08:45I was keen to hear what ideas Michael had cooked up for this place.
0:08:45 > 0:08:48# Stir it up... #
0:08:50 > 0:08:52- Michael, congratulations. - Thank you very much.
0:08:52 > 0:08:55A nice bijoux little property here.
0:08:55 > 0:08:57Now, interestingly, in the auction catalogue,
0:08:57 > 0:08:59- it was described as two rooms. - Right.
0:08:59 > 0:09:02- Did you view this property before you bought it?- No, I didn't.
0:09:02 > 0:09:04- You didn't view it?- No. - So you saw it as two rooms.
0:09:04 > 0:09:06Well, actually, you've got a bonus room then, haven't you?
0:09:06 > 0:09:09Exactly that, yeah. It was a surprise when I came in.
0:09:09 > 0:09:13- I didn't expect two bedrooms, to be honest.- So why didn't you view the property?- There was no time.
0:09:13 > 0:09:16It came up, it looked quite exciting so we went along to the auction.
0:09:16 > 0:09:18And of course, this road is a lovely road.
0:09:18 > 0:09:21It's really quiet, it's a no-through road.
0:09:21 > 0:09:23Did you do any research and look at the road at all?
0:09:23 > 0:09:28I did a bit of research in the fact that I looked at what properties go for in this area,
0:09:28 > 0:09:30what they can be rented for so that much I did.
0:09:30 > 0:09:32As for where it was, I didn't have a clue.
0:09:32 > 0:09:34- Never been to Croydon before in my life.- Seriously?- No.
0:09:34 > 0:09:37I knew of it, but I'd never been here before.
0:09:37 > 0:09:40So it was quite a brave buy for you on auction day, wasn't it?
0:09:40 > 0:09:43- It was, yes. It's kind of how I live my life.- On the edge? - Yeah, on the edge.
0:09:43 > 0:09:47So what did you think when you walked in through that door?
0:09:47 > 0:09:51- Were you a bit disappointed? Were you pleased?- Bit of both, really.
0:09:51 > 0:09:53I thought it is what it is, it's a small flat,
0:09:53 > 0:09:56but then there's two bedrooms so there's pluses and minuses.
0:09:56 > 0:09:59No, no, no, hold on a minute. It's got two bedrooms?!
0:09:59 > 0:10:03- You're calling that a bedroom? - You can get a bed in it so it's a bedroom.
0:10:03 > 0:10:04Ooh, a very small bed - a cot.
0:10:04 > 0:10:09But I've been talking to local agents in the area and they say keep it as a two-bed.
0:10:09 > 0:10:13Initially, I thought open it up, make it a one-bedroom. That would work more in East Croydon
0:10:13 > 0:10:17- but more so here, two bedrooms would rent a lot better. - I am very surprised at that.
0:10:17 > 0:10:19- I was too. - I am very surprised at that.
0:10:19 > 0:10:23If we were in central London, I would completely agree with you, but we're not.
0:10:23 > 0:10:25This is Croydon and I think that's a very, very small room.
0:10:25 > 0:10:28They're both very small rooms but I think it'll rent OK.
0:10:28 > 0:10:33'Ha! Well, that clang you just heard was my jaw hitting the floor.
0:10:33 > 0:10:36'First, Michael bought without ever having seen Croydon,
0:10:36 > 0:10:38'let alone the actual property.
0:10:38 > 0:10:43'And now he's convinced marketing that tiny space as a bedroom is the way to go.
0:10:43 > 0:10:46'He may not like living by the book, but in my experience,
0:10:46 > 0:10:49'it's best to follow the rules at least sometimes.
0:10:49 > 0:10:53'Still, he's landed on his feet with this wonderful location
0:10:53 > 0:10:57'so how is he going to renovate the property to really make it appealing?'
0:10:58 > 0:11:01- So are you going to update the bathroom at all?- No.
0:11:01 > 0:11:05- So, seriously, you're not even going to update the shower, the sink?- No.
0:11:05 > 0:11:08- No?!- We'll tart it up slightly but not too much, no.
0:11:08 > 0:11:10I tell you what does need a huge amount of tarting up
0:11:10 > 0:11:13and it's that window in that so-called bedroom.
0:11:13 > 0:11:15That's coming away from the wall.
0:11:15 > 0:11:19As soon as I saw the property, I could see it's actually been shortened, the window,
0:11:19 > 0:11:21so we might put the full-size window back in.
0:11:21 > 0:11:25Also a couple of the floorboards in there are very, very spongy.
0:11:25 > 0:11:29Yeah, a bit of underlay will sort that out, I think. A bit of underlay and thick carpet!
0:11:29 > 0:11:31So you're not too worried!
0:11:31 > 0:11:34I mean, the whole idea of you doing this is to get it rented out ASAP.
0:11:34 > 0:11:37Yeah, we hope to have it rented out within a month or so.
0:11:37 > 0:11:39So what's the big ol' hurry-up for you?
0:11:39 > 0:11:43I just got engaged recently in Goa, I've got a beautiful fiance so the wedding's planned for next spring
0:11:43 > 0:11:46so yeah, we need to get it on the market and get some income from it.
0:11:46 > 0:11:48Cor, there's a lot to do,
0:11:48 > 0:11:52but Michael wants a quick turnaround so he can start generating income
0:11:52 > 0:11:55and there's certainly nothing wrong with that.
0:11:55 > 0:11:59I just wonder if he thought longer term, could he get greater rewards?
0:11:59 > 0:12:03Still, at least this is one rebel with a plan and besides,
0:12:03 > 0:12:05he's got a wedding to pay for!
0:12:05 > 0:12:09So tell me, how much money do you think you are actually going to spend here?
0:12:09 > 0:12:13Initially, it was going to be in the region of £5,000,
0:12:13 > 0:12:16- but now it's going to be nowhere near that.- Oh!
0:12:16 > 0:12:19I'm just going to tart it up, I'm just going to get it ready for rent
0:12:19 > 0:12:23and then away we go - get some tenants in and get it rented.
0:12:23 > 0:12:26So, £1,000? £2,000? Stop me.
0:12:26 > 0:12:28- £3,000? £2,000? - Go lower than £1,000!
0:12:28 > 0:12:31- Go lower than £1,000?- 500 quid? - Probably about that.- Seriously?
0:12:31 > 0:12:35- Maybe about 500 quid, yeah.- Whoa! - Maybe a bit of flooring, some paint.
0:12:35 > 0:12:38- That's about it. - And my next question - timescale?
0:12:38 > 0:12:40Probably about three or four weeks, max.
0:12:40 > 0:12:45Three or four weeks and it's going to be you and your fiance doing the work then?
0:12:45 > 0:12:48Yeah, I think so. Ripping up a few carpets and doing a bit of painting
0:12:48 > 0:12:51and maybe even do something about that little kitchen.
0:12:51 > 0:12:54Really, YOU might do it? The chef in the house!
0:12:54 > 0:12:56I might even do something about that kitchen, but who knows?
0:12:56 > 0:12:58- Lovely to meet you today. - Nice to meet you.
0:12:58 > 0:13:02Michael is delighted with this little flat that he bought blind.
0:13:02 > 0:13:06I'm not sure though about renting out the tiny boxroom.
0:13:06 > 0:13:10Can he sway his tenants with a sparkling new kitchen?
0:13:10 > 0:13:15Will Michael cook up a storm or will this flat be as dull as dishwater?
0:13:15 > 0:13:19You can find out how he gets on later in the programme.
0:13:22 > 0:13:27MUSIC: Seven Nation Army by The White Stripes
0:13:27 > 0:13:30It started off as a small village,
0:13:30 > 0:13:35but Donnington in Telford, Shropshire began to grow in the '30s when the MOD moved in.
0:13:35 > 0:13:39In fact, the base here had the largest military stores in Europe at one time.
0:13:39 > 0:13:42Today, the base is still a vital source of jobs
0:13:42 > 0:13:44and business to the town.
0:13:46 > 0:13:53The property I'm here to see today is a three-bed semi-detached with a guide price of £60,000+.
0:13:53 > 0:13:57Now, the first thing I can see are these two huge trees in the front garden.
0:13:57 > 0:14:01They'll be blocking out a lot of light going into the house,
0:14:01 > 0:14:03but the worst thing for me is that flat roof.
0:14:03 > 0:14:06But I'll get into that a little bit more from the back of the house.
0:14:06 > 0:14:08Well, let's take a look.
0:14:08 > 0:14:14# You got to accentuate the positive
0:14:14 > 0:14:17# Eliminate the negative
0:14:17 > 0:14:21# And latch on to the affirmative
0:14:21 > 0:14:25# Don't mess with Mr In-Between... #
0:14:25 > 0:14:29But maybe this house has what it takes to turn from caterpillar
0:14:29 > 0:14:33to gorgeous butterfly. So let's accentuate the positive.
0:14:33 > 0:14:37This house is well maintained and has a driveway. Time to look inside.
0:14:38 > 0:14:41Right, the stairs are the first thing that hit you,
0:14:41 > 0:14:42going up to the three bedrooms.
0:14:42 > 0:14:45The kitchen as well seems to be of a decent size
0:14:45 > 0:14:48with a nice big window overlooking the back garden.
0:14:48 > 0:14:51This is a concern to me - downstairs bathroom.
0:14:51 > 0:14:53I don't like bathrooms downstairs.
0:14:53 > 0:14:56If it's possible, I'd like to lift that up the stairs,
0:14:56 > 0:15:00put it up there with the bedrooms - so much more convenient.
0:15:02 > 0:15:04Bathrooms upstairs or downstairs -
0:15:04 > 0:15:07it can be a question of convenience vs profit.
0:15:07 > 0:15:10And oof, those stairs look steep.
0:15:10 > 0:15:13But let's hope there's some positives at the top of them.
0:15:13 > 0:15:17Nice space - living room/lounge, double aspect windows,
0:15:17 > 0:15:21a big one to the back and a smaller one to the front of the house.
0:15:21 > 0:15:23Gas fire there - if it's possible,
0:15:23 > 0:15:25I would replace that and take it off the wall,
0:15:25 > 0:15:29see what was behind it and if you can go into the chimney breast, I would.
0:15:29 > 0:15:32Put a feature in there, something a bit prettier.
0:15:32 > 0:15:36You've got your radiator here. A silver radiator, that's new to me.
0:15:36 > 0:15:40I'd possibly go white if you could or I'd box it in with a little bit of wood,
0:15:40 > 0:15:42something a bit prettier with a nice bit of shelving.
0:15:42 > 0:15:45You could put some plants there or whatever you need,
0:15:45 > 0:15:47but this is a decent space.
0:15:47 > 0:15:50With a bit of creative thinking and a makeover,
0:15:50 > 0:15:52this house could really come to life.
0:15:52 > 0:15:54And the upside of that silver radiator
0:15:54 > 0:15:59is that there is central heating and you are not reliant on that gas fire.
0:16:00 > 0:16:04But we know the change I really want to make here, don't we?
0:16:06 > 0:16:10So the big question is can we get that bathroom upstairs?
0:16:10 > 0:16:14There's a big bedroom there and another decent-sized bedroom there.
0:16:14 > 0:16:16This is the third bedroom.
0:16:16 > 0:16:21For me, this is perfect to bring that bathroom from downstairs up here.
0:16:21 > 0:16:25Get a bath in here, get a shower in here and it would be a lovely, decent-sized bathroom.
0:16:25 > 0:16:31But what I have noticed is this tree here is blocking out all the light coming into this room.
0:16:31 > 0:16:34You've got to do something with that tree.
0:16:35 > 0:16:39Bathroom issue solved but I did say trees could be a problem.
0:16:39 > 0:16:41And I wasn't expecting them at the back as well.
0:16:44 > 0:16:47OK, this is a nice big space they've got at the back of the house.
0:16:47 > 0:16:50Decent-sized back garden and as I can see
0:16:50 > 0:16:54that must be the tree that's blocking out the light to the back bedroom.
0:16:54 > 0:16:55Now, in my experience of flat roofs,
0:16:55 > 0:16:57I'm not a massive lover of them at all.
0:16:57 > 0:17:00Having had them in properties myself,
0:17:00 > 0:17:03they do tend to leak if you don't maintain them correctly.
0:17:03 > 0:17:05They can affect your insurance premiums, so buyer beware
0:17:05 > 0:17:07if you're buying a flat-roof property.
0:17:07 > 0:17:11As with anything when it comes to properties,
0:17:11 > 0:17:13there's always a solution.
0:17:13 > 0:17:16Just make sure you account for any extra work and costs involved
0:17:16 > 0:17:19before you buy, especially when it comes to flat roofs.
0:17:19 > 0:17:21Believe me, I've been there.
0:17:23 > 0:17:27# I-I-I-I
0:17:27 > 0:17:29# Once bitten, twice shy, babe... #
0:17:30 > 0:17:32We've invited along a local estate agent
0:17:32 > 0:17:34to have a look at this three-bed semi.
0:17:35 > 0:17:39My first impression of this property is that it has got great potential
0:17:39 > 0:17:41and someone could really make a go of this one.
0:17:41 > 0:17:43It's got a very good back garden.
0:17:43 > 0:17:45The main bedroom is a very good size as well
0:17:45 > 0:17:49and it's got driveway parking to the front.
0:17:49 > 0:17:51The house has a guide price of £60,000+
0:17:51 > 0:17:55so what does our expert think it would be worth on the market?
0:17:55 > 0:17:59Once renovated, the property could sell for £95,000.
0:17:59 > 0:18:02It would also rent for £595 per calendar month.
0:18:02 > 0:18:07With regards to converting the property into a two-bed but having an upstairs bathroom,
0:18:07 > 0:18:10I don't think it'd have an adverse effect on the end price.
0:18:10 > 0:18:11It would actually work quite well
0:18:11 > 0:18:14cos it would create a small room downstairs as well.
0:18:15 > 0:18:19That's great that it wouldn't affect the selling price, but what about rental?
0:18:19 > 0:18:22If the property were a two-bedroom property,
0:18:22 > 0:18:26I think the rental figure might come down slightly to £550 per calendar month.
0:18:26 > 0:18:31OK, the issues for me are do you keep it as a three-bedroom
0:18:31 > 0:18:33or do you change it into a two-bedroom
0:18:33 > 0:18:35by moving the bathroom upstairs?
0:18:35 > 0:18:38You've also got the flat roof issue as well,
0:18:38 > 0:18:42but let's see who was brave enough to take it on when it went under the hammer.
0:18:44 > 0:18:48Three-bedroom semi-detached house in need of modernisation.
0:18:48 > 0:18:5050 to start me here.
0:18:51 > 0:18:5450, 50 bid. Thank you. £50,000.
0:18:54 > 0:18:56At 50,000, 52 I've got to see now.
0:18:56 > 0:18:59At 50,000. 52 seated. 52.
0:18:59 > 0:19:0154.
0:19:02 > 0:19:0656? 56, took it there. 56.
0:19:06 > 0:19:0758...
0:19:07 > 0:19:11'The bidding started briskly enough, but stalled at £60,000,
0:19:11 > 0:19:13'bang on the guide price.'
0:19:13 > 0:19:17If not, I'm selling it at 60,000 in the room then for the first time...
0:19:17 > 0:19:19New bidder, 61.
0:19:20 > 0:19:2362, 63, 64.
0:19:23 > 0:19:2565, 66.
0:19:25 > 0:19:3067, 68, 69, 70, 71.
0:19:30 > 0:19:32A half?
0:19:32 > 0:19:3570 and a half. 71. Shaking his head.
0:19:35 > 0:19:3771, still with you, madam, at £71,000.
0:19:37 > 0:19:40Another 500 anywhere else?
0:19:40 > 0:19:43If not, I'm selling it at 71 for the first time...
0:19:43 > 0:19:4571 for the second time.
0:19:45 > 0:19:49Third and final time at £71,000...
0:19:49 > 0:19:51Your lot, madam, well done.
0:19:51 > 0:19:54Securing the property for £71,000 was Cheryl,
0:19:54 > 0:19:59sat here with her partner Richard on the left, who she was actually bidding for.
0:19:59 > 0:20:03He works in the motor trade and has a small property portfolio.
0:20:03 > 0:20:05However, this is his first auction purchase
0:20:05 > 0:20:09and it seems bidding on the day wasn't the only work Cheryl did.
0:20:11 > 0:20:13- Richard, congratulations. - Thank you very much.
0:20:13 > 0:20:15Did you actually go to the auction yourself?
0:20:15 > 0:20:18- I sent the girlfriend, Cheryl, to do...- A recce?
0:20:18 > 0:20:20A recce to start with so she found out what it was like,
0:20:20 > 0:20:22what the procedure was and everything.
0:20:22 > 0:20:25I was interested in a house just down the road from here,
0:20:25 > 0:20:28I'd done all my costings on it and basically I was just a bit fed up
0:20:28 > 0:20:30because it'd gone way, way more than I wanted.
0:20:30 > 0:20:33Cheryl had already been and had a look at this house.
0:20:33 > 0:20:34She said, "Are you interested?"
0:20:34 > 0:20:38I just said, "Yes." I was aware of her putting a hand in the air the first time
0:20:38 > 0:20:40and then it must have just been nodding of the head
0:20:40 > 0:20:42cos I didn't see her body move.
0:20:42 > 0:20:46'Well, I think it looks like Cheryl's forward-thinking has paid off here.
0:20:46 > 0:20:49'But more importantly, what does Richard think?'
0:20:49 > 0:20:52After my initial look around the property,
0:20:52 > 0:20:54I'm actually quite pleased so far,
0:20:54 > 0:20:57but obviously ask me that in a few months' time.
0:20:57 > 0:20:59But no, it seems nice and straightforward.
0:20:59 > 0:21:03And your intentions for the property itself, what do you want to change if you want to change anything?
0:21:03 > 0:21:06I'm going to rent the property out.
0:21:06 > 0:21:09I'm going to obviously clean it, change the carpets,
0:21:09 > 0:21:13get this redecorated, just make it a nice comfortable house for somebody.
0:21:13 > 0:21:17Will you do anything with the bathroom? Are you going to move it, are you going to keep it as it is?
0:21:17 > 0:21:21Cos I'm going to rent the property out, I'm going to re-tile it.
0:21:21 > 0:21:24I'm not sure whether I'll be able to salvage the three-piece,
0:21:24 > 0:21:25- but I'm going to do my best.- Yep.
0:21:25 > 0:21:28It's all going to be nice new flooring, new tiles.
0:21:28 > 0:21:29I've got to put a shower in there.
0:21:29 > 0:21:32OK, so you're going to make good of what you've got downstairs,
0:21:32 > 0:21:35not going to move it at all and keep your bedrooms upstairs, correct?
0:21:35 > 0:21:37No, interesting idea, but no, I've no plans to do that.
0:21:37 > 0:21:41'Richard is renting so is probably making the right decision.
0:21:41 > 0:21:44'It might be hard to recoup the cost of moving the bathroom
0:21:44 > 0:21:47'as it would have to be reflected in the rental charge.
0:21:47 > 0:21:49'Sometimes you have to take your personal preferences
0:21:49 > 0:21:51'out of the equation and think it through.
0:21:53 > 0:21:56He's also aiming to just clean up the kitchen units,
0:21:56 > 0:21:59'which is fair enough as they don't seem too dated.'
0:22:02 > 0:22:05So, the trees, the one at the front does block out a lot of light.
0:22:05 > 0:22:07The one at the back's really close to the house.
0:22:07 > 0:22:10Are you intending doing anything with them at all?
0:22:10 > 0:22:13The one at the back's definitely got to go.
0:22:13 > 0:22:15It's too close to the house, it's blocking a lot of the light
0:22:15 > 0:22:18as you mentioned and I think it'd please the neighbours.
0:22:18 > 0:22:20One of my concerns was the flat roof.
0:22:20 > 0:22:23Now, do you have any concerns about the flat roof at all?
0:22:23 > 0:22:27I've got a few flat-roof properties and there's quite a few in the neighbourhood.
0:22:27 > 0:22:30There's no obvious signs of any leakage on this wall,
0:22:30 > 0:22:34but they seem a lot easier to fix nowadays cos the resin just comes in a sheet.
0:22:34 > 0:22:37- OK. - Andy, my builder, is pretty good
0:22:37 > 0:22:39so he'll keep an eye on that for me, anyway.
0:22:39 > 0:22:41'Richard's looked at the type of roof he has,
0:22:41 > 0:22:43'is aware of the potential problems,
0:22:43 > 0:22:48'but crucially he has spoken to the builder and insurer and is happy with the situation.
0:22:50 > 0:22:52'As long as Richard's got a realistic budget,
0:22:52 > 0:22:55'I don't see what could go wrong.'
0:22:55 > 0:22:58And budget-wise for this property, have you got a budget in mind?
0:22:58 > 0:23:02- I'm completely skint at the moment. Not a lot at the moment.- We all are!
0:23:02 > 0:23:05Hopefully I'm going to get some change out of about £2,000.
0:23:05 > 0:23:08That might be ambitious but I'm going to give it a good go.
0:23:08 > 0:23:11If that's what you have in mind, then you've got to try and stick to it the best you can.
0:23:11 > 0:23:15- Will you go over if you have to? - Yeah, I've got to turn it around pretty quick
0:23:15 > 0:23:17so if I've got to go over, it's got to be just common sense,
0:23:17 > 0:23:20- take a snap decision and do it. - Timescales in mind?
0:23:20 > 0:23:22Two weeks, a week? How long do you want to take on this?
0:23:22 > 0:23:25Hopefully it's not famous last words but about six to eight weeks.
0:23:25 > 0:23:28- Are you going to do any of the work yourself? - I'll do most of it myself.
0:23:28 > 0:23:31- You'll do most of the work in this house all on your own?- Yes.
0:23:31 > 0:23:34- That's brave.- Yes, me and the lad, he doesn't know yet,
0:23:34 > 0:23:36- but we're going to sort this out. - That's your son?- Yes.
0:23:36 > 0:23:40- How old is your son?- James is 14 now. - And what will you get him doing?
0:23:40 > 0:23:44- Will he be doing the work and you'll be the foreman?- Pretty much, yeah.
0:23:44 > 0:23:47He doesn't know it yet but he'll be helping out with the manual stuff
0:23:47 > 0:23:49like doing the garden, that sort of thing.
0:23:49 > 0:23:51So, Richard, good luck and I look forward to seeing how you get on.
0:23:51 > 0:23:54- That's brilliant, thanks very much.- Take care.
0:23:55 > 0:23:58Richard has given himself a £2,000 budget
0:23:58 > 0:24:00and eight weeks to complete all the work.
0:24:00 > 0:24:03He has got his son helping him out, but will he get it all done?
0:24:03 > 0:24:06You can find out later on in the programme.
0:24:07 > 0:24:11Coming up - when it comes to the reasons for buying this property,
0:24:11 > 0:24:15the finger is pointed at...yours truly!
0:24:15 > 0:24:17Well, literally, it's all your fault!
0:24:19 > 0:24:23Whilst in Donnington, Telford, after something of a close shave with a tree,
0:24:23 > 0:24:25Richard has learned his lesson.
0:24:25 > 0:24:27Next time, I'll get a professional.
0:24:34 > 0:24:37Back to south London and the borough of Croydon
0:24:37 > 0:24:40where earlier I saw a rather peculiar property
0:24:40 > 0:24:42which was described as "a two-room flat".
0:24:44 > 0:24:48It had a guide price of £90,000 and, to be honest,
0:24:48 > 0:24:49my feelings about it...
0:24:49 > 0:24:52Well, I was a little up and down.
0:24:52 > 0:24:55This is where it gets rather interesting.
0:24:55 > 0:24:57So I'm just going to my bedroom. Good night, everyone!
0:24:57 > 0:25:00Going down the stairs. That's it, this is my bedroom!
0:25:00 > 0:25:03But then I'm coming up the stairs to go to the loo
0:25:03 > 0:25:06to go back down the stairs to get into the bathroom.
0:25:06 > 0:25:11Finished all of that, back up the stairs to go back into the bedroom.
0:25:11 > 0:25:15Gosh, I'm exhausted and I'll done is get up to have a shower and go to the loo!
0:25:18 > 0:25:21Well, selling for £126,000 on auction day,
0:25:21 > 0:25:24the successful bidder was chef Michael.
0:25:25 > 0:25:29Not only had Michael not viewed the property before buying it,
0:25:29 > 0:25:32he'd never even visited Croydon before.
0:25:32 > 0:25:35And he was approaching this property
0:25:35 > 0:25:39with something of a fast-food mentality rather than a slow cook.
0:25:39 > 0:25:43I'm just going to get it ready for rent and then away we go,
0:25:43 > 0:25:48- get some tenants in and get it rented.- So, £1,000? £2,000? Stop me.
0:25:48 > 0:25:51- £3,000?- Go lower than £1,000! Go lower than £1,000!- 500 quid?
0:25:51 > 0:25:54- Probably about that.- Seriously? Whoa!- About 500 quid, yeah.
0:25:54 > 0:25:58Maybe a bit of flooring, some paint. That's about it.
0:25:58 > 0:26:02- And my next question - timescale? - Probably three, four weeks, max.
0:26:02 > 0:26:08'Ha, well! I really felt the flat needed quite a bit of work doing to it to bring it up to scratch,
0:26:08 > 0:26:12'but Michael was clearly set on a fast turnaround and a quick rental.'
0:26:15 > 0:26:20Seven months later and we've returned to Croydon to see just what Michael has done.
0:26:37 > 0:26:39Wowee, what a surprise!
0:26:39 > 0:26:42Michael has ditched his plans for a quick turnaround
0:26:42 > 0:26:46and patch-up job in favour of a complete renovation,
0:26:46 > 0:26:49moving the kitchen into what was one of the two bedrooms
0:26:49 > 0:26:53and creating a brilliant one-bedroom apartment,
0:26:53 > 0:26:57complete with exposed brick feature wall. Fantastic!
0:27:13 > 0:27:19Along with fiance Manny, Michael has transformed this property from top to bottom,
0:27:19 > 0:27:23adding design and character to a once-drab property.
0:27:23 > 0:27:26But why the big change of plan?
0:27:27 > 0:27:28We were just going to do a quick turnaround,
0:27:28 > 0:27:31but then we decided, this being the first of hopefully many,
0:27:31 > 0:27:34so we decided to do a proper renovation
0:27:34 > 0:27:37so literally we stripped it back to the brickwork.
0:27:37 > 0:27:38We took floors out, ceilings out,
0:27:38 > 0:27:43we put everything back as it should be and it was a project I wanted to be proud of
0:27:43 > 0:27:45and I think I've achieved that.
0:27:45 > 0:27:49So this being our flagship one for the start and the first one,
0:27:49 > 0:27:52that's why we decided to go all the way and do the full renovation.
0:27:52 > 0:27:55The second bedroom, it really shouldn't have had a second bedroom.
0:27:55 > 0:27:58The size of the floor space in this flat just didn't lend itself
0:27:58 > 0:28:03to have a second bedroom. So we decided to take that away and make it a good one-bedroom.
0:28:03 > 0:28:06So that's the reason we got rid of the partition wall.
0:28:06 > 0:28:11It opened up the lounge and put the kitchen in its rightful place. It all flows quite nicely now.
0:28:11 > 0:28:13We had an issue in the lounge with the floor.
0:28:13 > 0:28:15We took actually four floors away
0:28:15 > 0:28:18before we got to the original floorboards, which was some task.
0:28:18 > 0:28:21It took us two weeks to get the floors and the walls up.
0:28:21 > 0:28:25But once we got down to the Victorian floorboards, we realised we needed to level them out
0:28:25 > 0:28:27so what we did was we put some timber frame in
0:28:27 > 0:28:31and we levelled it all out and then we got good quality carpet and some good underlay,
0:28:31 > 0:28:33obviously just for sound insulation as well for the flat below
0:28:33 > 0:28:37so that's the reason why we stripped it back and we levelled the floors out.
0:28:37 > 0:28:41One of the reasons Michael originally planned a quick turnaround
0:28:41 > 0:28:44was because of his impending nuptials.
0:28:44 > 0:28:47Over to Manny to find out how they're getting along.
0:28:47 > 0:28:50We had to put it on the back burner at the moment
0:28:50 > 0:28:52cos we have got quite a lot going on.
0:28:52 > 0:28:55I've started a new job as well and also moved in with Michael
0:28:55 > 0:28:57so there's a lot going on,
0:28:57 > 0:29:01plus we're trying to get this off the floor as well
0:29:01 > 0:29:03so we're hoping to do it next year.
0:29:03 > 0:29:07'So with the wedding on hold just for now
0:29:07 > 0:29:10'and the couple concentrating on property development,
0:29:10 > 0:29:11'how's it been working together?'
0:29:11 > 0:29:13It's been OK.
0:29:13 > 0:29:18We've had a few decisions where we had to make decisions on what we wanted to do within the flat.
0:29:18 > 0:29:22We've kind of come to the same decisions with the colouring,
0:29:22 > 0:29:26the shading, the appliances, the curtains, the flooring
0:29:26 > 0:29:29and everything else but we've been fine.
0:29:29 > 0:29:32We're getting on well, yep, and hope to do a few more after this.
0:29:34 > 0:29:38'Originally, Michael was planning a budget of £500
0:29:38 > 0:29:41'and a timescale of just three to four weeks.
0:29:41 > 0:29:44'However, the change of plan has meant that budget going up
0:29:44 > 0:29:45'to around £15,000.
0:29:46 > 0:29:50'And with Michael doing as much of the work he could himself,
0:29:50 > 0:29:53'it's taken six months to get to this point.'
0:29:57 > 0:30:00So with a total investment here of £141,000
0:30:00 > 0:30:03and Michael eager to rent the property,
0:30:03 > 0:30:06it'll be interesting to hear if two local estate agents
0:30:06 > 0:30:08think Michael's change of plan was a good idea.
0:30:10 > 0:30:12There were previously two bedrooms
0:30:12 > 0:30:15and I think the owner's decision to make it into a one-bedroom flat
0:30:15 > 0:30:17is definitely the right thing to do.
0:30:17 > 0:30:19Because of the square metreage of the flat,
0:30:19 > 0:30:22it's not that big and a one-bedroom definitely suits the size.
0:30:22 > 0:30:24Well, it's an excellent finish.
0:30:24 > 0:30:27The owner's done a really good job on it,
0:30:27 > 0:30:29a nice contemporary feel to it.
0:30:29 > 0:30:32Spacious, lots of light flooding in and a good location.
0:30:33 > 0:30:37With the agents sounding positive, let's get to those valuations.
0:30:37 > 0:30:38Sales first.
0:30:38 > 0:30:42This flat would sell for approximately £165,000.
0:30:42 > 0:30:46We would put this property on the market for £170,000.
0:30:46 > 0:30:49I was looking for in the region of 160 so yeah, very happy.
0:30:49 > 0:30:53Yeah, excellent. The work's paid off!
0:30:54 > 0:30:57If it sold for the higher valuation of £170,000,
0:30:57 > 0:31:02it would mean a pre-tax profit of £29,000. Very nice!
0:31:03 > 0:31:06But for now, it's all about rentals.
0:31:06 > 0:31:10We would market this property at £850 per calendar month.
0:31:10 > 0:31:14This flat would rent for approximately £875 per calendar month.
0:31:14 > 0:31:18I'm very happy with the rental values. I was looking for between £800 and £900 anyway
0:31:18 > 0:31:21so that's bang on the money so yeah, very happy with that.
0:31:21 > 0:31:23Same here, I was looking at the same as well
0:31:23 > 0:31:25so quite happy for a one-bedroom.
0:31:25 > 0:31:32The higher rental of £875 per calendar month would bring in a yield of around 7.5%,
0:31:32 > 0:31:36which, along with the very healthy sales valuation,
0:31:36 > 0:31:39makes the change of plan here a clear success.
0:31:39 > 0:31:42So now it's all done, what about those wedding plans?
0:31:43 > 0:31:45Probably next year.
0:31:45 > 0:31:47Probably spring next year now, I think, would be a good time.
0:31:47 > 0:31:50Yeah, somewhere exotic, I think.
0:31:57 > 0:32:00Derby is the UK's most central city.
0:32:00 > 0:32:03# Clowns to the left of me Jokers to the right
0:32:03 > 0:32:07# Here I am Stuck in the middle with you... #
0:32:07 > 0:32:09And it's being stuck in the middle
0:32:09 > 0:32:12that's made it so successful in the past.
0:32:12 > 0:32:16Of course, like all cities, it has had its ups and downs.
0:32:16 > 0:32:22However, with up to a £2 billion regeneration masterplan unveiled in 2005,
0:32:22 > 0:32:25it sounds like a place for the canny investor.
0:32:27 > 0:32:33Well, one area of the property market that can potentially be extremely lucrative
0:32:33 > 0:32:37is the world of HMOs - houses of multiple occupation.
0:32:37 > 0:32:39And the property that's up for auction, this one here,
0:32:39 > 0:32:44certainly has all the makings of an extremely interesting one of those.
0:32:44 > 0:32:50Really close to the centre of Derby, £138,000 was the guide price,
0:32:50 > 0:32:53over three floors, it's already got a licence. Let's have a look.
0:32:56 > 0:33:00So pretty good nick on the outside or so it would appear.
0:33:00 > 0:33:02What's it like inside? Well, a little entrance vestibule here,
0:33:02 > 0:33:05that's good to have to keep the cold out.
0:33:05 > 0:33:10And then into the main corridor, a few nice little grand features.
0:33:10 > 0:33:13Some of the plasterwork, that's nice to see, as is the radiator
0:33:13 > 0:33:16so you've got central heating which is good news.
0:33:16 > 0:33:20So let's wend our way around and find out what we have.
0:33:20 > 0:33:22Starting here, aha!
0:33:22 > 0:33:26A decent-sized bedroom, looks to be in half-decent condition.
0:33:28 > 0:33:31That's some kind of little room there. Hoowee!
0:33:31 > 0:33:33Judging by the smell and the extractor, I don't know,
0:33:33 > 0:33:36some kind of smoking room, perhaps.
0:33:36 > 0:33:39Some houses used to smell like that all the way through.
0:33:39 > 0:33:43But, yeah, I wonder if that could potentially be another room
0:33:43 > 0:33:45because of course when it comes to HMOs,
0:33:45 > 0:33:49it's about maximising the amount of rooms you've got
0:33:49 > 0:33:52as long as you've got the correct licences etc in place.
0:33:52 > 0:33:54But this is a nice thing to have.
0:33:54 > 0:33:58Often sacrificed in these kind of properties, a big communal area.
0:33:58 > 0:34:00But this is lovely to see.
0:34:00 > 0:34:02A bit of a downstairs loo there, that's also good news.
0:34:02 > 0:34:06And then passing through the property... It's massive, isn't it?
0:34:06 > 0:34:07Absolutely huge.
0:34:07 > 0:34:09A really good-sized kitchen.
0:34:09 > 0:34:13Now, when it comes to houses that have more which have got more than one person living in them
0:34:13 > 0:34:18or groups of people with HMOs, you do need to think about things like cooking facilities,
0:34:18 > 0:34:20refrigeration facilities,
0:34:20 > 0:34:25there's things set down in law in terms of what you have to provide
0:34:25 > 0:34:28and the good news here is a really good-sized kitchen with lots of space
0:34:28 > 0:34:33for, say, an extra cooker and the right number of fridges etc.
0:34:33 > 0:34:37And off this room, the kitchen here, another room.
0:34:38 > 0:34:41Again, crying out, I think, to be a bedroom.
0:34:41 > 0:34:44At the moment, it's probably a dining room, another communal space.
0:34:44 > 0:34:49Nice to have, but if you're talking about maximising your investment return,
0:34:49 > 0:34:51another bedroom would be good.
0:34:51 > 0:34:55All in all though, a fantastic start!
0:34:56 > 0:35:02And it gets better. On the first floor, there are four rental rooms.
0:35:03 > 0:35:06All pretty good sizes.
0:35:06 > 0:35:08Ignore the clutter, that'll be going.
0:35:10 > 0:35:13Towards the back of the property, there's a bathroom
0:35:13 > 0:35:16and a separate toilet and a shower room.
0:35:18 > 0:35:23On the second floor, there is a single room with a very handy en-suite.
0:35:27 > 0:35:32So in total, there are six rooms currently set up for rental. Not bad at all!
0:35:34 > 0:35:36And then I think you could get another two rooms.
0:35:36 > 0:35:38The smoking room has to go
0:35:38 > 0:35:42and I reckon that dining room could add another.
0:35:44 > 0:35:46Now, I did say HMOs are lucrative,
0:35:46 > 0:35:50but before we get carried away, it's not a licence to print money.
0:35:53 > 0:35:55If you rent this out to six tenants,
0:35:55 > 0:35:59you are basically opening up a few issues.
0:35:59 > 0:36:01Number one is the rules and regulations
0:36:01 > 0:36:04in terms of what you need to do to make the property habitable
0:36:04 > 0:36:08for those six people go up quite exponentially.
0:36:08 > 0:36:13You need things like, and it's all written down in law, you need the right number of fire escapes,
0:36:13 > 0:36:18you need doors that close automatically, you need proper fire alarms,
0:36:18 > 0:36:20you need the right number of this, that and everything else.
0:36:20 > 0:36:22So that's going to add to your cost setting this up.
0:36:22 > 0:36:25There are also licences you have to obtain.
0:36:25 > 0:36:28And when it comes to actually having the place operational,
0:36:28 > 0:36:31you have to get that many tenants in
0:36:31 > 0:36:36and people have a propensity to come and go a bit more regularly.
0:36:36 > 0:36:40So the turnaround in your tenants can actually be quite high
0:36:40 > 0:36:44so you really need to be either close by, on site,
0:36:44 > 0:36:47really managing the property or else get a really good managing agent
0:36:47 > 0:36:50who can look after it for you. Pros and cons.
0:36:50 > 0:36:53On balance, depends why you're in it.
0:36:53 > 0:37:00With this place, you will no doubt have noticed there are already lots of fire safety measures,
0:37:00 > 0:37:04as required by HMO regulations, and it looks well maintained.
0:37:04 > 0:37:06But to renew a licence,
0:37:06 > 0:37:11you'd have to ensure documentation on all aspects of the property is compliant.
0:37:11 > 0:37:14An agent from the auction house who sold it came along
0:37:14 > 0:37:18to tell me what he thinks any purchaser could do with this HMO,
0:37:18 > 0:37:21guided at £138,000.
0:37:21 > 0:37:24I think the options for anyone buying this property
0:37:24 > 0:37:27are they either maximise what they have here already
0:37:27 > 0:37:29or they could alternatively convert it into flats.
0:37:29 > 0:37:31With regard to turning it into flats,
0:37:31 > 0:37:34I don't think it's something that would be financially viable.
0:37:34 > 0:37:36I think the cost would certainly outweigh the return.
0:37:36 > 0:37:38I agree with that.
0:37:38 > 0:37:41So what does the agent reckon it could make in rental income?
0:37:41 > 0:37:43If the property were offered to the rental market
0:37:43 > 0:37:46with the current number of rooms, with six lettable rooms,
0:37:46 > 0:37:49then I believe it would generate in the region of £27,000 per annum.
0:37:49 > 0:37:52That's not as incredible as you might think,
0:37:52 > 0:37:58but that's because it attracted higher rates due to it being a place for assisted living.
0:37:58 > 0:38:03However, if you just charge the local going rate of around £80 per week,
0:38:03 > 0:38:06that would still mean £23,000 per annum.
0:38:06 > 0:38:08But remember what I said earlier -
0:38:08 > 0:38:14part of that income will need to be spent maintaining the property to the standard required by law.
0:38:14 > 0:38:19Well, if you were looking for things in an ideal investment property,
0:38:19 > 0:38:24this one has them by the bucketload. Yeah, a really great one to go for.
0:38:24 > 0:38:26Let's see who agreed when it went under the hammer.
0:38:26 > 0:38:28We've got a large detached house.
0:38:28 > 0:38:31It's an excellent residential investment opportunity.
0:38:31 > 0:38:33Start me at 130 then if you will.
0:38:33 > 0:38:35130,000 for it.
0:38:35 > 0:38:38130. Thank you, 130,000.
0:38:38 > 0:38:42At £130,000... 131. 131.
0:38:42 > 0:38:45132 is bid. 132.
0:38:45 > 0:38:47133? 133.
0:38:47 > 0:38:51133. 134. 135.
0:38:51 > 0:38:56'The bids came thick and fast. We rejoin the bidding at £175,000.'
0:38:56 > 0:39:02175. 176. 177.
0:39:02 > 0:39:05178. 179.
0:39:05 > 0:39:07£180,000.
0:39:07 > 0:39:10181. 181,500?
0:39:10 > 0:39:13181. 181,000.
0:39:13 > 0:39:16At £181,000...
0:39:16 > 0:39:20Once... Twice... Third time...
0:39:20 > 0:39:22Sold at 181, thank you very much.
0:39:24 > 0:39:28'The successful bidder with £181,000 was Mahesh.
0:39:28 > 0:39:33'IT project manager Mahesh already has a few properties in his hometown of London,
0:39:33 > 0:39:37'but this is his first venture into the Derby market.
0:39:37 > 0:39:41'With him is his friend, Meyur, who already has properties in Derby
0:39:41 > 0:39:43'and will be lending a helping hand.'
0:39:43 > 0:39:45Mahesh, Meyur, great to see you both.
0:39:45 > 0:39:48- Great to see you.- Congratulations!
0:39:48 > 0:39:50Big house, tell me why you wanted to buy it.
0:39:50 > 0:39:54It's a lovely, lovely property, a detached property
0:39:54 > 0:39:57and it currently has an HMO licence which we need to renew.
0:39:57 > 0:40:01But hopefully we'll get everything sorted
0:40:01 > 0:40:06and the idea is to bring in lots of individuals living in this house
0:40:06 > 0:40:10and make some profit.
0:40:10 > 0:40:12Great! You say this is your first venture into Derby.
0:40:12 > 0:40:16Where have you been investing, if that's what you've been doing so far?
0:40:16 > 0:40:20So my friend, Meyur, can tell you a little bit more about himself.
0:40:20 > 0:40:26He's quite an influence on me regarding this property so, Meyur, you can...
0:40:26 > 0:40:31OK, well, literally it's all your fault. I've been watching your programme and seeing you every day
0:40:31 > 0:40:35and I started buying first in London, Plumstead and Thamesmead area,
0:40:35 > 0:40:38and then a six-flat property in Nottingham
0:40:38 > 0:40:43and then I've always been buying, renovating and selling in the Northeast as well.
0:40:43 > 0:40:45And then this one came along
0:40:45 > 0:40:47and I told Mahesh, "You need to go for this one."
0:40:47 > 0:40:52So the idea is that first of all we're going to do the HMO licensing,
0:40:52 > 0:40:54renew that and then once we have that,
0:40:54 > 0:40:59then we'll start with six tenants to start off with,
0:40:59 > 0:41:03then increase that to eight and then the future plan
0:41:03 > 0:41:09- is to possibly redevelop the whole house altogether into a number of flats.- Oh, wow!
0:41:09 > 0:41:12So that's kind of the long-term plan,
0:41:12 > 0:41:15but the short-to-medium-term is just to rent it out as it is.
0:41:15 > 0:41:18And what about the kitchen and the various bathrooms?
0:41:18 > 0:41:21We're going to keep the bathrooms as they are
0:41:21 > 0:41:26- and keep the rooms as they are. There's no other major changes. - And the kitchen?
0:41:26 > 0:41:29The kitchen, we're just going to put a new cooker in there
0:41:29 > 0:41:32- and a new cooker, the white goods and that's about it.- OK.
0:41:32 > 0:41:36So you wouldn't lose this communal area that we're in at the moment?
0:41:36 > 0:41:39No, I think a communal area is important
0:41:39 > 0:41:42and also it has external access from here
0:41:42 > 0:41:46as well as from this other room here, from the kitchen as well,
0:41:46 > 0:41:49- so I think we're just going to keep that as it is.- OK.
0:41:49 > 0:41:53So what's the timescale for getting it sorted out?
0:41:53 > 0:41:55- Something like six weeks.- OK.
0:41:55 > 0:42:02Yeah, six weeks and the total cost we reckon is going to be around £5,000-£6,000
0:42:02 > 0:42:03and we'll have it done.
0:42:03 > 0:42:07'Well, keeping costs down will mean a bigger yield,
0:42:07 > 0:42:12'especially if they do convert two rooms downstairs into rentable bedrooms.
0:42:12 > 0:42:14'But HMOs do need to be closely managed
0:42:14 > 0:42:19'so Mahesh living in London isn't ideal.'
0:42:19 > 0:42:23Obviously one of the issues is going to be managing the property. How are you going to do that?
0:42:23 > 0:42:28So far, what we have done is contacted local agents, that's one thing.
0:42:28 > 0:42:33We also have some family friends here who can actually support
0:42:33 > 0:42:38and also advise and the idea that is we will be coming round here every now and then ourselves
0:42:38 > 0:42:42just to make sure that everything is in order
0:42:42 > 0:42:46and just keeping an eye on this just to make sure
0:42:46 > 0:42:50- that everybody behaves the way they should be.- Well, listen, congratulations.
0:42:50 > 0:42:53- Thank you very much.- Good luck with it.- Thank you.
0:42:53 > 0:42:57- And we'll look forward to seeing how you get on.- Thank you.- Cheers.
0:42:57 > 0:43:00Well, I definitely think Meyur gave his friend Mahesh
0:43:00 > 0:43:02a really good tip-off with this place.
0:43:02 > 0:43:08Even as it stands, it could make a very considerable rental yield.
0:43:08 > 0:43:11And with the upgrade of those two extra rooms, even more so.
0:43:11 > 0:43:15How will they get on? You can find out later in the show.
0:43:18 > 0:43:20Well, we've seen how one property turned out.
0:43:20 > 0:43:23- Let's see how the other two got on. - Shall we have a look?- Let's do it.
0:43:27 > 0:43:31We're back in Donnington, Telford to see this three-bed semi.
0:43:32 > 0:43:36For a guide price of £60,000+, it was a good, solid house.
0:43:36 > 0:43:38Though along with a thorough modernisation,
0:43:38 > 0:43:42I thought there was something that could be changed outside
0:43:42 > 0:43:44that would mean the world of difference inside.
0:43:46 > 0:43:50This tree here is blocking out all the light coming into this room.
0:43:50 > 0:43:53You could trim it back, you could take it down,
0:43:53 > 0:43:56but you've got to do something with that tree.
0:43:56 > 0:43:58# And let the sunshine in
0:43:58 > 0:44:00# Come over right away
0:44:00 > 0:44:02# Send those clouds away
0:44:02 > 0:44:05# And let the sunshine in... #
0:44:05 > 0:44:07The house sold for £71,000 at auction
0:44:07 > 0:44:11and I met up with new owner Richard to hear how the auction had gone.
0:44:12 > 0:44:16It turned out Richard's girlfriend Cheryl had a big part to play.
0:44:16 > 0:44:19Cheryl had already been and had a look at this house.
0:44:19 > 0:44:21She said, "Are you interested?" I just said, "Yes."
0:44:21 > 0:44:24I was aware of her putting her hand in the air the first time
0:44:24 > 0:44:28and then it must have just been nodding of the head cos I didn't see her body move.
0:44:28 > 0:44:31# How do you do what you do to me?
0:44:31 > 0:44:34# I wish I knew
0:44:34 > 0:44:40# Wish I knew how you do it to me but I haven't a clue... #
0:44:42 > 0:44:47Yes, Richard was now the proud owner of a three-bedroom semi that he planned to let.
0:44:47 > 0:44:50But with a budget of only £2,000,
0:44:50 > 0:44:52he'd have to make the most of every penny.
0:44:59 > 0:45:03Two months later and we've returned to find out how he's got on.
0:45:03 > 0:45:08MUSIC: Wake Up by Arcade Fire
0:45:13 > 0:45:18It's been quite a good experience. A lot of hard work's gone into it.
0:45:18 > 0:45:20Basically upstairs and the bedrooms,
0:45:20 > 0:45:23we took the old dated wallpaper out
0:45:23 > 0:45:26that was slightly hanging off the wall anyway,
0:45:26 > 0:45:29re-painted, a little bit of papering.
0:45:29 > 0:45:31The whole house has been re-carpeted
0:45:31 > 0:45:34but the big problem upstairs was nicotine, absolutely everywhere.
0:45:34 > 0:45:36I've never encountered it before.
0:45:36 > 0:45:39It took ages to get that all clean so it's like two or three coats on the ceilings,
0:45:39 > 0:45:42that type of thing and basically the whole house has just been cleaned.
0:45:43 > 0:45:46In the kitchen, to help avoid overspending,
0:45:46 > 0:45:48Richard has kept the old units.
0:45:48 > 0:45:51However, he's re-grouted everything, put up new wallpaper
0:45:51 > 0:45:54and painted and cleaned throughout.
0:45:54 > 0:45:58And I think it goes to show what you can achieve even on a limited budget.
0:45:59 > 0:46:03On to the bathroom and it's a similar story.
0:46:03 > 0:46:05Richard managed to use the bathroom suite,
0:46:05 > 0:46:10refreshing it by replacing the floor and paintwork and re-tiling it.
0:46:10 > 0:46:13He was keen to keep the bathroom downstairs so that for rental,
0:46:13 > 0:46:16the flat stays as a three-bedroom.
0:46:16 > 0:46:19But he did listen to my suggestion for the lounge.
0:46:19 > 0:46:23This is the front room. I finished it all in a nice neutral magnolia.
0:46:23 > 0:46:26As you can see, we took Dion's advice and got rid of the fireplace.
0:46:26 > 0:46:29It looks nice, it's safer, it's cleaner.
0:46:30 > 0:46:33The silver radiator has disappeared,
0:46:33 > 0:46:35I think much to everybody's pleasure on that one
0:46:35 > 0:46:37and I managed to salvage the floor
0:46:37 > 0:46:39and all in all, I think the room looks great.
0:46:41 > 0:46:45I think that looks pretty good, if I do say so myself.
0:46:45 > 0:46:46And you might have spotted earlier
0:46:46 > 0:46:49that a rather large feature has disappeared.
0:46:49 > 0:46:51Yes, Richard tackled this himself.
0:46:51 > 0:46:53Don't try this at home, folks!
0:46:54 > 0:46:59I must have the best neighbour in the world next door with Malcolm.
0:46:59 > 0:47:00The good advice of my friend Ian,
0:47:00 > 0:47:04he gave me the advice on how to do the angles in cutting the tree down,
0:47:04 > 0:47:06I got it slightly wrong
0:47:06 > 0:47:09and basically instead of going that way, it went that way.
0:47:09 > 0:47:12And that explains the new fence.
0:47:12 > 0:47:17Perhaps the DIY approach didn't save much as the fence had to be replaced.
0:47:17 > 0:47:21I really would recommend getting a tree surgeon in to tackle a job like this.
0:47:21 > 0:47:23It can be dangerous to life and limb,
0:47:23 > 0:47:25not to mention relations with neighbours.
0:47:27 > 0:47:29And of course, once you've chopped that tree down,
0:47:29 > 0:47:31there's a lot of wood to get rid of.
0:47:33 > 0:47:37I must thank my son James who spent many an hour chopping up the branches
0:47:37 > 0:47:39and helping me dispose of everything.
0:47:39 > 0:47:42I was very popular with a lot of people who've got wood burners,
0:47:42 > 0:47:45I think I've kept them going through most of the winter with the logs.
0:47:45 > 0:47:48# Oh, yeah, the trees
0:47:48 > 0:47:53# Those useless trees
0:47:53 > 0:48:00# Produce the air that I am breathing... #
0:48:01 > 0:48:05You'll not be surprised to hear that the trees in the front garden remain.
0:48:05 > 0:48:10Richard took on this job intending to keep a very tight budget as he said he was skint.
0:48:10 > 0:48:12How did that go?
0:48:13 > 0:48:19I said £2,000 and I'm really chuffed, I think it came out at £1,958.
0:48:19 > 0:48:22Whether that's coincidence or not, I don't know,
0:48:22 > 0:48:25but really pleased so it's absolutely come on spot on.
0:48:25 > 0:48:28Richard bought the property for £71,000,
0:48:28 > 0:48:31£11,000 above the guide price.
0:48:31 > 0:48:35But I think sticking to that £2,000 budget is pretty good going.
0:48:36 > 0:48:41We've asked along two local property experts to see what they think.
0:48:41 > 0:48:44The layout of the property is very typical to the area.
0:48:44 > 0:48:46There's not really much more you could do to the property
0:48:46 > 0:48:49because if we were to move the bathroom upstairs,
0:48:49 > 0:48:52we would lose a bedroom which would affect the saleability
0:48:52 > 0:48:53and we'd be losing that further bedroom.
0:48:53 > 0:48:57It's got a driveway, which would be extremely appealing
0:48:57 > 0:48:59both for the resale and the letting market.
0:48:59 > 0:49:02I'm glad to see the new owners have kept the bathroom
0:49:02 > 0:49:05on the downstairs ground floor level
0:49:05 > 0:49:09because it will mean that you will get a greater rental income
0:49:09 > 0:49:11if the owner does decide to let the property out.
0:49:11 > 0:49:16It certainly sounds like Richard made a good decision leaving that bathroom where it was.
0:49:16 > 0:49:17But if he sold the property,
0:49:17 > 0:49:21would he be able to make back his £73,000 investment?
0:49:24 > 0:49:27If the owner was to put this property on the market,
0:49:27 > 0:49:30I believe it would achieve anything in the region of £90,000-£95,000.
0:49:30 > 0:49:34I would recommend an asking price of £95,000.
0:49:36 > 0:49:42The higher valuation of £95,000 could mean a pre-tax profit of £22,000,
0:49:42 > 0:49:45minus the usual taxes and expenses.
0:49:45 > 0:49:48But of course, it's the rental valuation that Richard's really interested in.
0:49:50 > 0:49:55The rental figure for this style of property would be £550-£575 per calendar month.
0:49:55 > 0:50:01I would suggest a rental income of £550 per calendar month.
0:50:01 > 0:50:02That's absolutely spot on.
0:50:02 > 0:50:06£550 was what I was going to ask for so that's great.
0:50:06 > 0:50:10If Richard was to get his desired rent of £550 per calendar month,
0:50:10 > 0:50:15that would give him a yield of just over 9%. A good result!
0:50:15 > 0:50:19So, has he learned anything from his experience?
0:50:19 > 0:50:21I really appreciate good friends.
0:50:21 > 0:50:24I'd maybe give myself a little bit more time,
0:50:24 > 0:50:26but having said that, it got the work done
0:50:26 > 0:50:28and try and avoid cutting trees down.
0:50:28 > 0:50:30Next time, I'll get a professional.
0:50:36 > 0:50:39And now back to the centre of the UK - Derby -
0:50:39 > 0:50:41and this substantial detached property.
0:50:45 > 0:50:49On at a guide price of £138,000, this was previously used
0:50:49 > 0:50:53as a house of multiple occupancy, or an HMO to you and me.
0:50:54 > 0:50:58It was in pretty good condition with six lettable rooms
0:50:58 > 0:51:01already in place and the potential for another two.
0:51:03 > 0:51:06It proved to be a popular lot on auction day
0:51:06 > 0:51:08with two bidders battling it out.
0:51:08 > 0:51:12Once... Twice... Third time...
0:51:12 > 0:51:14Sold at 181, thank you very much.
0:51:16 > 0:51:22'The successful bidder in the end with a bid of £181,000 was London-based Mahesh.
0:51:22 > 0:51:27'IT project manager Mahesh already had a few properties in London,
0:51:27 > 0:51:31'but this was his first venture into the Derby property market
0:51:31 > 0:51:36'and he brought with him experienced property renovator and friend Meyur.'
0:51:36 > 0:51:41- Mahesh, Meyur, great to see you both.- Great to see you. - Congratulations!
0:51:41 > 0:51:43Big house, tell me why you wanted to buy it.
0:51:43 > 0:51:47It's a lovely, lovely property, a detached property
0:51:47 > 0:51:50and it currently has an HMO licence which we need to renew,
0:51:50 > 0:51:54but hopefully we'll get everything sorted
0:51:54 > 0:51:59and the idea is to bring in lots of individuals living in this house
0:51:59 > 0:52:03and make some profit.
0:52:03 > 0:52:07With Meyur providing help and advice along the way,
0:52:07 > 0:52:12Mahesh had plans to create two extra bedrooms to maximise rental potential.
0:52:12 > 0:52:18However, adhering to the rules and regulations of HMOs is no simple task for a landlord
0:52:18 > 0:52:22so I was interested to see how plans would progress.
0:52:23 > 0:52:27One month later and we've returned to see how they've got on.
0:52:42 > 0:52:45Where there was once a stinky communal smoking room,
0:52:45 > 0:52:48there is now a newly decorated extra bedroom.
0:52:55 > 0:52:58I'm glad to see the living area at the back of the property
0:52:58 > 0:53:02is still here and freshly decorated also.
0:53:02 > 0:53:06Plus they've managed to create an eighth bedroom from the old dining area.
0:53:12 > 0:53:16Throughout, the property has been tastefully and neutrally decorated,
0:53:16 > 0:53:19making it perfect for the HMO market.
0:53:32 > 0:53:35The attic room is certainly looking much improved
0:53:35 > 0:53:40and the whole house looks refreshed and ready to rent.
0:53:42 > 0:53:44But how's it been for Mahesh and Meyur?
0:53:46 > 0:53:51OK, so we re-painted the whole house. We also re-carpeted.
0:53:51 > 0:53:55We have done some upgrades to the kitchen,
0:53:55 > 0:54:01the kitchen area where we needed to move a sink so we introduced another sink
0:54:01 > 0:54:04so there are two sinks in the kitchen now.
0:54:04 > 0:54:06But as far as the house is concerned,
0:54:06 > 0:54:08we've actually done lots of roofing work.
0:54:08 > 0:54:11There's a new roof in the front as well as at the back,
0:54:11 > 0:54:16but unfortunately that roof work is not up to standard
0:54:16 > 0:54:19so we are still working on that.
0:54:19 > 0:54:23Apart from that, just a general clean-up of the house,
0:54:23 > 0:54:25just lots of little debris everywhere,
0:54:25 > 0:54:30but, yes, that was the main part of the work.
0:54:30 > 0:54:33So unfortunately the roof work will have to be redone,
0:54:33 > 0:54:37but aside from that, the house is looking almost ready for rental.
0:54:39 > 0:54:41What exactly are their plans?
0:54:42 > 0:54:44There are eight lettable rooms
0:54:44 > 0:54:48so the idea is that there would be eight individuals living there.
0:54:48 > 0:54:52So depending on the HMO licensing we're going to have,
0:54:52 > 0:54:57some of the rooms may be occupied by a couple rather than individuals
0:54:57 > 0:55:00so that's kind of our aim.
0:55:00 > 0:55:04Having said that, we've had inquiries from students as well
0:55:04 > 0:55:06and they're interested in taking the building
0:55:06 > 0:55:09and we can have students coming in every year.
0:55:09 > 0:55:13With students, you tend to get a little bit more money
0:55:13 > 0:55:15than you do with renting out to non-students.
0:55:15 > 0:55:22To get to this point, it's cost Mahesh £8,000 of his £15,000 budget
0:55:22 > 0:55:27with a further £3,000 estimated to finish the property off.
0:55:27 > 0:55:29However, before he can rent the property,
0:55:29 > 0:55:33he will need to get that all-important HMO licence renewed.
0:55:35 > 0:55:39Well, only this afternoon, we are getting yet another inspection.
0:55:39 > 0:55:44This could be a final inspection when the inspector comes in.
0:55:44 > 0:55:50But if they do find that there are certain things that are not up to standard,
0:55:50 > 0:55:54then chances are that that will take another week from today.
0:55:54 > 0:55:57But we are nearly there.
0:55:59 > 0:56:02Well, it's taken around five weeks and once completed,
0:56:02 > 0:56:06the estimated total cost will be £192,000.
0:56:06 > 0:56:10With Mahesh eager to start filling the house with tenants,
0:56:10 > 0:56:15it'll be interesting to hear the opinions of two local estate agents.
0:56:15 > 0:56:18They've done what they've needed to do initially,
0:56:18 > 0:56:21they've put new carpets in and painted it throughout.
0:56:21 > 0:56:23There's some roof work that needs to be carried out,
0:56:23 > 0:56:25but I'm sure they've got that in hand.
0:56:25 > 0:56:30To achieve two more letting rooms really was common sense.
0:56:30 > 0:56:34They were there, one was a smoking room,
0:56:34 > 0:56:36one was a communal dining room.
0:56:36 > 0:56:39I don't think you need either for that purpose, really,
0:56:39 > 0:56:42so to transfer them into private letting rooms was an obvious solution.
0:56:42 > 0:56:46Well, what is the rental potential here?
0:56:47 > 0:56:50Yeah, with a property like this, it's divided into rooms
0:56:50 > 0:56:52and it depends on what size the room is,
0:56:52 > 0:56:57but you'd be looking between £250 and £300 per calendar month
0:56:57 > 0:56:59and that would include all of the bills.
0:56:59 > 0:57:02In terms of rental, if it's appealing to the student market,
0:57:02 > 0:57:07students will pay £95-£100 a week for a fully serviced house
0:57:07 > 0:57:10but they're prepared to pay that because all the bills are included,
0:57:10 > 0:57:14they simply pay the landlord and that's it, job done, they are there.
0:57:14 > 0:57:18We have had students who are willing to pay £100 a week for seven of the rooms
0:57:18 > 0:57:23and they want the eighth room as a study room and so we do agree with these figures.
0:57:24 > 0:57:28'Well, if they did achieve each room being rented for £100 per week
0:57:28 > 0:57:32'and assuming the rooms are rented out all year round,
0:57:32 > 0:57:35'that could mean a huge rental yield of around 20%.
0:57:37 > 0:57:43'So with Mahesh's first foray into the Derby property market a clear success,
0:57:43 > 0:57:46'how have they enjoyed working together?'
0:57:47 > 0:57:49It's been fun. It really has been fun.
0:57:49 > 0:57:50Working together,
0:57:50 > 0:57:54learning from each other, picking each other's brains
0:57:54 > 0:57:58and at the same time, the whole project, how to turn it from what it was to what it is.
0:57:58 > 0:58:03It has been a challenge, but it's been an enjoyable challenge.
0:58:06 > 0:58:08Well, that's it for today's show.
0:58:08 > 0:58:11Join us next time for more action from the auctions.
0:58:11 > 0:58:13We'll be looking around bungalows to top-floor flats.
0:58:13 > 0:58:16- And anything in-between.- See you then.- Goodbye.- Goodbye.- Goodbye.