Homefinder Abroad: Buying property the Caldwell way
Know your market, keep focused and you too could be investing in success. Jane Hardy reports
From Pamporovo to Croydon, Florida to Turkey, there is nowhere Belfast-born property investor Alan Caldwell (50) won't consider as he builds his increasingly valuable portfolio. Recently he bought a decent-sized flat in Bulgaria's main ski resort, Pamporovo, to use intermittently with his family in the winter and happily watch appreciate for the rest of the year.
"It's an investment first and foremost and a lifestyle buy second. You can find somewhere to buy as an investment which will be vacant for a few weekends so you and the family can visit, but it doesn't work the other way round. If I'd bought somewhere on the Bulgarian coast, for example, it would be empty apart from the three months of summer..."
And that, you feel, wouldn't exactly please Mr Caldwell, who has not only created an empire in the past six years, but has evolved his own, highly profitable philosophy. It's capitalism in its purest form, really, with Alan starting out by buying close to home in Northern Ireland. "If I have £15,000 and my friend has £15,000, he'll get 5% per annum interest in the bank but I can get a home loan for £85,000, so I've £100,000 of asset to invest. If my property grows at 5%, with the £85,000 paid for by a tenant, I'll end up with a greater profit." Then you do it all over again. The business of buying and renting out has since, unsurprisingly, become his full-time job. " Six years ago, I bought my first property here, an off-plan ground floor flat in Dromore, Co Down. I made a few wee mistakes along the way. I paid my money and thinking it the most natural thing, I contacted an estate agent to rent it out. He was complimentary about the decor and nine months later, it still wasn't let." Alan Caldwell was concerned, as he was paying the mortgage, so he followed a friend's advice and took out a classified ad for £12. "I had 40 calls in 48 hours and rented it instantly."
That was lesson number one: keep control of the business yourself, where possible, and don't use estate agents or experts ("not that I don't like them, but I like to keep my business under my control"). Then he acquired a "rush" of properties, as he puts it, near his home, in Gilford, Tandragee, Moira, places that he knows. Lesson number two is: Know your location. "You must visit the country yourself and work from the top down, finding out about the politics, the currency and so on. Then you look at the swimming pool and other details." Alan admits that the upward graph of his profits is predicated on house prices rising. But he only invests where an economy is strong, employment is high and a currency is in good nick.
"I researched Bulgaria, which looked good." He travelled over and bought the apartment for £40,000 off-plan. One of the factors influencing Alan in acquiring property in Pamporovo is that it's now a year-round holiday resort, with skiing in winter, riding, biking and a trip down the new motorway to the beach in summer. "Buying off-plan requires a different mindset. A lot of people can't do it as you are putting down money for an outline on a map."
Lesson number three, relating to buying off-plan, is: Check that there is planning approval and equally importantly, that the title deeds are clean. As Alan says, you don't want an old woman turning up saying 'That's my grandson's property'.
Then there was the Florida experience. "I was a bit more naive then, in 2004, and went to a property show and signed up with a top notch company." Unfortunately, a group of skinks - local, and protected status lizards - have stood or scuttled in the development's way. "The development was due to be up in 18 months but they haven't turned a sod. However, the company is holding the prices down to the originally agreed level." And Alan will have made money, as the property - "on paper" - has doubled in value. He adds that you need "a tougher skin" when buying off-plan.
Now Alan is considering whether to buy in to Turkey. "It's decision time for us. We are looking near Izmir, up the Aegean coast, but recent political developments will make me consider whether it's a good move." The good news from Alan is that he believes the buy to let market is far from over. " I could have sold my properties for a large sum last year, but didn't want to."
His next move is starting up a consultancy, to teach others the Caldwell technique. Telephone 07843 082821 to book a session.