Although nowadays there’s an ever-increasing choice of locations when it comes to overseas investment, Europe still remains a firm favourite with UK investors. An estimated 90% of all overseas property purchased by UK nationals is still in Europe.

Far-off exotic destinations like the Caribbean and Asia certainly do have their appeal and can offer excellent investment opportunities but when it come to the British public, it appears that want something a little closer to home.

European Markets
Traditional markets like France, Spain, Portugal and Italy are generally the most sought after areas when it comes to the conservative British investor.

Eastern Europe has proven to have significant investment potential, offering very cheap properties good capital appreciation. The advent of budget airlines with cheap flights and more direct routes has made these locations infinitely more accessible.

It’s questionable though, if they’ll have the same rental potential as the more traditional markets, in the long run. Or indeed, if they’ll build up the same kind of UK expat community that the likes of France and Spain have.

Croatia is one of the hottest investment spots for this year, according to the estate agents. Istria is the most popular part of the country with British buyers. It’s also the most expensive part of the country with highest proportion of new-build properties and developments.

It’s not all just new developments. You can still find many traditional style houses available for renovation in the coastal towns and villages.

Lesser-known Montenegro has become incredibly popular recently. Property rentals have increased by a staggering 113% from 2006 to 2007, according to the Holiday Rentals website.

Often described as “The pearl of the Mediterranean” Montenegro is located between Croatia and Bulgaria, on the Adriatic coast. It’s a country of unique natural beauty blessed with lakes, mountains, green valleys and sandy beaches surrounded by the clean blue waters of the Adriatic Sea. It’s been one of Eastern Europe’s star performers this year.
Property Prices in Montenegro vary fantastically depending on location. Some of the inland areas like Lake Skadar, old Royal Capital of Cetinje can be up to 200% cheaper than along the coast.

America and the Caribbean
North America accounts for 5.2% of properties owned by Brits worldwide and the Caribbean accounts for just 1.5%. These are the second most popular locations with UK investors and homebuyers.

Florida (the sunshine state), with its miles of white sandy beaches, warm year-round climate and English-speaking population is by far the most appealing location in North America. It attracts approximately 89% of UK investors.

When in comes to the Caribbean, Barbados appears to be the most sought after area, attracting up to 49% of UK investors. Located in the Southeastern Caribbean, this paradise island boasts mile after mile of powdery white sand beaches and an excellent year-round climate with endless sunshine and soft sea breezes. It also has the highest standard of living in the Caribbean.

After Barbados, popular choices include St Lucia, Antigua & Barbuda, Trinidad & Tobago and Aruba.

Research
Before you go ahead and take the plunge, it’s essential that you fully research both the property and the area. Whether you’re looking for a traditional cottage in the Montenegro hills or a two-bedroom apartment in Marbella, research is vital.

If it’s a buy-to-let investment, there are numerous factors to take into consideration, like proximity to the coast, climate, amenities (bars, restaurants, shops), flights, infrastructure etc.

All these factors (and many more) will help to determine the short and long-term rental potential of the area. In places like the Canary Islands, Barbados and the Cape Verde Islands, where you’re guaranteed sunshine all year long, investors can generally charge peak season prices at any stage of the year. Tenerife property has long been a favourite with UK buy-to-let investors.

If you’re actually planning on living in the place it’s best to try and rent there first before you go ahead and purchase. Visit the place out of season. It might be a paradise during the summer months but during the depths of winter it could be just lonely dark and depressing, particularly in Eastern European.