Holidays 2007 Buying a Property Abroad is Proving a Sound Investment

HARDLY a night goes by without one TV programme or another extolling the virtues of buying a property abroad.

And with house prices rocketing and the boom in low-cost airlines, it seems we do not need much persuading.

Thousands take the plunge each year with the Spanish costas, French countryside and Florida beach resorts top of the list.

But the traditional holiday home destinations face increasing competition from newcomers such as Bulgaria, Hungary, Dubai, Australia and Cape Verde off the coast of West Africa.

Foreign exchange specialist HiFX says 10 per cent of all inquiries it receives about buying property abroad relate to Bulgaria, and it has seen purchases by Britons there rise by almost 40 per cent since the start of the year.

Many people buy off plan – in which case the top tip is to fix the sterling cost in advance to avoid the ill effects of exchange rate movements.

There is no substitute for extensive research and seeking professional advice is advisable before buying abroad. Speak to owners of holiday homes in your area of interest. Visiting the location out of season is also recommended.

Ashley Ramsay, marketing manager with Standard Life Bank, says: "Using equity in your UK property to raise funds is an ideal solution, particularly as many homeowners have seen prices soar.

"Flexible mortgages are good for overseas homebuyers. They provide a cash reserve facility, which means that borrowers can agree beforehand the maximum amount they want to borrow against their home and then release funds when needed – in stages if necessary.

"Specialist lenders, such as Property Finance4Less and Conti Financial Services, can help UK buyers to raise funds in the country in which they are buying.

"One of the main benefits of having a euro mortgage, for example, is that interest rates much lower than those in the UK. If you plan to let your holiday home when you are not using it, and you will be receiving the rent in the local currency, it may make sense to have the mortgage debt in the same currency."

So, where best to invest in a holiday home and what kind of rental value will it be capable of returning? Here are three of the best…

BULGARIA

OVER the past few years Bulgaria has been much hyped as the tourist destination on the rise, especially now it has become a member of the European Union.

Bulgaria is still sizzling, thanks not only to its economic and political advances, but to a Riviera sun that shines for over 120 days each year.

Since Bulgaria started to blossom, those investing in second homes have been among the principal benef iciaries, and between 2003 and 2004, the number of Britons visiting Bulgaria rose by 36 per cent to over 370,000 and visitors from Ireland increased by 124 per cent.

This rapid increase in tourist interest coupled with the rise in Bulgarian property prices means interest in second homes and holiday rentals looks set to grow well into the future.

Tourists from across Europe are drawn to this increasingly prosperous democracy. And little wonder, it offers a feast of outdoor activities such as skiing or hiking in Bulgaria’s spectacular mountains or swimming, waterskiing and diving in the blue waters of the Black Sea Riviera.

WHAT IT COSTS:

Approximately EUR60,000 (pounds 39,600) for a one-bed apar tment (bought off plan) on Black Sea Coast

WHAT IT WILL EARN YOU:

approximately EUR450 (pounds 297) per week (high summer)

THE ALGARVE, PORTUGAL

ALBUFEIRA is our top tip on the Algarve. As a result of the tide of tourism this one-time fishing village has expanded since the 1960′s into a major holiday resort and now has over 12,000 permanent residents.

The centre of the town changes its character after sunset – a plentiful collection of bars, restaurants and clubs start to fill- up with tourists until they over spill into the narrow streets.

There is a good selection of beaches which run both to the east and west from the town. There is a small museum of 15th and 17th century Ming ceramics, and a Municipal art gallery that holds regular exhibitions during the season.

A new Marina is at present being constructed on the west side of the town.

Just a few miles inland, everything changes. The green of the countryside is dotted with almond, fig, orange and pine trees and decorated chimneys stand out against the ochre of tiled roof Bucolic villages.

Nightlife, sunshine, beaches and lots and lots of animation are just some of t he guaranteed features of Albufeira.

With direct flights from Belfast to Faro many Northern Ireland families are holidaying here and elsewhere in the Algarve.

WHAT IT COSTS:

Approximately EUR160,000 (pounds 105,000) for a two bed apartment

WHAT IT WILL EARN YOU:

approx EUR606 (pounds 400 per week), high season

CAPE VERDE, SOUTH AFRICA

CAPE Verde (The Republic of Cape Verde) is a group of exquisite volcanic islands 385miles (620km) west of Senegal, West Africa, in the Atlantic Ocean.

Cape Verde is made up of two distinctly different types of islands. Six of the islands, located more to the west, are characterised by their mountainous landscapes, whereas long, sandy beaches distinguish the remaining three.

The currency used in Cape Verde is Cape Verde Escudo (CVE). Cape Verde has the coolest temperatures of any country in West Africa and is fairly similar to the Canary Islands. The capital of the islands is Praia, which is on the island of Santiago.

The easiest way to get to Cape Verde is via Lisbon, Portugal and then directly to Sal or Santiago. There are many airlines now offering daily flights to Lisbon, not only via the major airports but also through many of the smaller ‘local’ airports.

Once in Portugal there are daily flights to the Island of Sal which has an International Airport and also now to Santiago Island where the new International Airport has just opened. Travel to other islands can then be via daily flights or ferry.

More direct flights from UK airports are now available, including Birmingham. There is an ‘Open Skies’ policy that allows other airlines to fly to Cape Verde and will lower air fares through competition.

WHAT IT COSTS:

Approximately EUR83,000 (pounds 55,000) for a one bed apartment on Santiago

WHAT IT WILL EARN YOU:

from approx EUR531 (pounds 350) per week, all season

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