An “incredibly dated” two-bed flat in Stone proved to be “a shrewd investment” for a veterinary surgeon and his partner. Graham and Jane added the first-floor property to their growing rental portfolio in today’s episode of popular BBC daytime show Homes under the Hammer.
The couple, from Stafford, snapped up the flat for £2,000 less than the £38,000 guide price. Presenter Martel Maxwell was impressed with the potential of the property, which she said could be transformed with some “elbow grease” and “not a huge budget”.
She particularly liked the fact the flat had its own front door and the high ceilings made it feel more spacious. Her first port of call was the flat’s galley kitchen and she was clear on her thoughts about the cupboards and appliances.
“I’d take them out and start again – they’re really, really dated,” Martel told viewers. She then went into the bathroom where she found a small bath with an “old school water tank”.
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Martel felt that it took up a lot of space and the new owners would be better off installing a combi boiler to create more room while also being more energy efficient. She then described the reception room as a “good size”.
But several old and dated features needed to go as Martel pointed out the textured wallpaper and threadbare carpet. “Get rid of it,” she said.
The room also had polystyrene ceiling tiles. Martel told viewers: “Not only are they dated, they’re a real fire hazard and have to go.”
Despite this she felt the property “could be a shrewd investment”. However, fellow presenter and voice-over Martin Roberts explained there was one issue to be aware of.
“But… and there is always a but,” he explained. “There is a small pitfall here and that is the lease on the flat which is only 56 years.
“A short lease can affect the value of a property that could present problems in the future as any potential buyer will find it difficult to get a mortgage. Owners can negotiate with the freeholder to extend the lease or wait two years for the legal right to extend it. So not as straightforward as it seems.”
Vet Graham and his partner Jane bought the flat at auction for £36k to build up their rental portfolio to around 20 properties – including commercial buildings. They explained that a £5-6,000 budget had been set aside for the work required.
However, the pair wouldn’t be getting their hands dirty as they have a plumber, electrician and decorators to take care of the revamp. When the BBC cameras returned, they found that the living room had been spruced up with a new modern electric fire.
The polystyrene ceiling tiles had also been removed. The kitchen was cleaned up with a new sink added, while a brand new bathroom suite had been installed.
“The main job was putting in the new heating system,” said Graham. Martin then explained that Graham had contacted the leaseholder about extending the lease but hadn’t heard anything back.
However, he was happy to wait the two years before he could legally extend it with the cost decided by arbitration. In the end the works ran slightly over budget, costing him £7,500.
That resulted in a total project spend of £43,500. Local estate agent Butters John Bee said that while there was “not a massive amount of change”, what had been done had added value.
An online agent was impressed describing the flat as “perfect for renting” and “ready to go”. The pair valued the monthly rent potential as between £420 and £450.
Graham was expecting £425 and said he had two tenant viewings pencilled in. If he chose to sell, he could fetch between £60,000 and £65,000 – a pre-tax profit of £21,000.
However, Graham explained he wasn’t interested in putting it on the market and instead was focussing on adding even more properties to his portfolio.
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