Continued...

The property market in Turkey has been likened to Spain 20 years ago. Although no longer cheap, it’s still cheaper than Spain, and has at least as much to offer, with a Mediterranean and Aegean coastline, attractive resorts, great beaches, a fascinating culture, sunny climate and a wide choice of developments.

On the downside, Turkey’s human rights record is appalling, and that has kept the country out of the EU, as well as keeping squeamish Western tourists out of the country. But Turkey’s desire to join Europe, and the pressure that’s exerting on its government to shape-up, appear to be making a difference. Building quality Turkey has also been notoriously low, but that too seems to be improving.

For investment, the best bet is a seaside resort such as Bodrum, Gumusluk or Konacik on the Aegean coast, where you can buy a pretty, 2-bedroom apartment with sea views from around £50,000 to £70,000, or a 3-bedroom detached villa from around £85,000 to £120,000. In the Dalaman area of Turkey’s Mediterranean coastline, you can pick up a 2-bedroom seaside flat from around £40,000, or spend up to around £200,000 on a 5-bedroom luxury villa. On the eastern Mediterranean coastline is the hot destination of Antalya, , where you can buy a 1-bedroom flat from around £60,000, or something with 2 bedrooms for around £75,000. A swanky penthouse costs just £100,000, and you can get a 4-bedroom villa for £200,000.

Investors have also been pouring into the former British colony of Cyprus, the third largest Mediterranean island and the birthplace of Aphrodite, mythical goddess of love. The built up coastal areas around Paphos, Limassol and Larnaca are the most popular areas to buy. Although prices in Cyprus have been steadily rising, £70,000 will still buy you an attractive 1-bedroom apartment in downtown Paphos or Limassol, while the same type of property could be had for around £60,000 in a seaside village near Larnaca.

Another place to look in Cyprus is the pretty resort of Paralimni, near the border with northern Cyprus, where you can pick up an apartment with communal pool from around £60,000. But it’s not advisable to buy across the border in the north of the island. Most property in northern Cyprus is still owned by Greek Cypriot refugees who were forced to leave in 1974, so it’s a legal and moral minefield. Although you’ll find people willing to sell you property in the north, it’s probably a risk too far.

With an Atlantic and Mediterranean coastline, a strengthening economy and developing infrastructure, Morocco has been tipped as a market to watch. Although you could spend £1 million on a five-star villa in Casablanca or Marrakesh, property here is a good deal less expensive than in Spain. You could buy a gorgeous traditional villa (riad) in Casablanca from around £100,000, a classy town house in Tangiers for less than £150,000, or a seaside apartment in Saidia - the first of six purpose-built resorts planned by the Government - from around £80,000.

The tropical Cape Verde Islands, located a 6-hour flight away in the Atlantic Ocean, are emerging as an alternative to the Canary Islands, which lie to the north. A former Portuguese colony, Cape Verde has all-year-round sunshine, a new airport and a clutch of new resorts. However, it’s very early days for these islands and they are not the Canaries yet. Infrastructure is thin on the ground and poverty is rife. If mass tourism fails to develop as planned, things could fall very flat.

Over £100 million is being invested in Cape Verde’s infrastructure over the next few years, including two more airports. One of these will be built on the island of Boavista, which is the focus of much planned development and is tipped for market growth. You can currently buy a 1-bedroom apartment here from around £35,000 to £70,000, or a two-bedroom flat from around £80,000. Prices are similar on the island of Sal, which is already a hot spot for investment, being the centre of much existing development. On Santiago island, which is already served by the new international airport, a one bedroom apartment costs from around £50,000.

Grenada and the Dominican Republic are likely investment candidates in the Caribbean. A fast-growing tourist destination, the ‘Dom Rep’ sits close to Cuba in the northern Caribbean, and offers a year-round tropical maritime climate, sandy beaches and a fast-developing leisure infrastructure. Property prices are a fraction of those in the more established Caribbean enclaves such as Barbados. A 2-bedroom villa with sea views, in a gated community with a pool, can be had for around £85,000. A 3-bedroom beachside villa costs from around £125,000.

The three-island Commonwealth state of Grenada is located in the Eastern Caribbean at the southern tip of the Windward Islands, about 100 miles north of Venezuela. It has average temperatures of around 25-30 degrees C, tempered by the cooling trade winds, a mountainous backdrop and stunning beaches. The growing tourism industry is focused on small resorts, but this is mainly a luxury villa location. The prime areas include Ft Jeudy and Lance aux Epines in the St.George's area, where a 3-bedroom villa costs from around £230,000. However, on the new tourist developments the entry price is lower. In St David on the south east coast, you can buy a cottage with sea views in a gated community from around £150,000.

The fifth largest country in the world, Brazil is tipped by many property watchers as a future hot spot. The main centres of potential investment are Rio, which has been experiencing a minor slump in values but is tipped to rise again; Sao Paulo, which is thought to be at the start of a boom; and the coastal resort of Bahia where much of Brazil’s new tourism development is focused. In Porto Seguro, Bahia, you can buy 2 or 3-bedroom apartments off plan for around £50,000 to £60,000.

To find an agent selling international property, a good place to start is the Federation of Overseas Property Developers, Agents and Consultants (FOPDAC), which actively regulates its members. www.fopdac.com

The emerging market specialists, Property Frontiers, have a useful website and sell properties in many up and coming overseas markets. www.propertyfrontiers.com

John Howell & Co is one of the best established law firms dealing in overseas property, and provides free market reports on its website. www.lawoverseas.com

There’s not much you can do about property booms and crashes or changes in the local laws, except hope that you get the market timing right and that the government doesn’t take action to cool the market (as the Chinese have done) or ban foreign ownership (as the South Africans are rumoured to be considering). But there are things you can do to mitigate some of the other risks.

Business risk
Researching the local market will of course reduce the risk of having void periods when you can’t let the property, or of buying a dud that you can’t sell. As well as researching the area’s facilities, desirability and transport connections, check out the letting income being obtained by existing owners, look at amount of type of new development going on and when this is likely to be completed, and any future plans for developments nearby that might affect the value of your own property. Also think about local crime and security, especially if you are planning the leave the property unattended.

Project risk
If you’re buying on a new development, there are steps you can take to guard against losing your shirt. If buying off plan, make sure your lawyer checks to see what guarantee you have that the property will be completed, and how you can get your down payments back if things go pear shaped. Also ensure the development is legally built and has the proper permissions.

Legal pitfalls
To be on the safe side, it’s best to use two lawyers, one at home and one in the country where the property is located. Get a certified translation of any foreign contracts before you sign them (for a list of translators, consult the Institute of Translation and Interpreting - www.iti.org.uk). Some of the points your lawyers should check are:

• Whether the property is jointly owned by several members of the same family (which is common in some European countries) and if so, have they all agreed to sell?
• are there any outstanding loans, unpaid bills or encumbrances?
• are you entitled to buy freehold property as a foreigner, and can you bequeath it to your chosen beneficiaries?

Are you entitled to live in the property?
Can you legally let the property to holidaymakers? Is there any tax on local letting income and, if so, is there a double taxation agreement with the UK?

Currency risk
Buying at the wrong time in a country which experiences large currency fluctuations would obviously be bad news. If you’re likely to be exposed, consult a currency specialist about the costs and benefits of hedging the risk.

The Briton Abroad syndrome
It’s a recognised phenomenon that when Britons buy property abroad they tend to lose their native cool. In their eagerness to buy a slice of the good life, some people commit to a proposition on a wave of enthusiasm and holiday-induced euphoria, only to regret it later. It probably goes without saying, but don’t sign anything until you get home and have had time to consider all the angles in the cold light of a British dawn. In many countries, you’re committed to buying a property once you’ve made an offer, and you may lose your deposit if you pull out.

Accounting web and Dan Graham can be found at http://www.accountingweb.co.uk/