According to research carried out by the Thomson Group, owning a property abroad is now the ambition of over 50% of the British population. Not surprisingly Spain and Cyprus remain the most popular destinations for second home buyers while countries like France, Italy and Portugal continue to grab their fair share of the property investment gold rush!

While the usual suspects will always attract the more cautious, risk aversive investor, the most recent generation of property investors cant seem to get enough of what our Eastern European neighbours have to offer. Eye-popping prices in the former communist states draw thousands of us to the shores of countries practically unheard of before they popped the for sale sign into the national soil. None, more so than Bulgaria and lets face it, people knew that a property in Bulgaria could be picked up for 5000 long before they could point to Bulgaria on the map.

So whats the big attraction? Well, unless youve been hiding under a rock for the past twelve months youll know that cheap property prices, the promise of high capital growth, pending EU membership and spectacular scenery are just a few of the treasures attracting investor cash to the country and some might ask what else could an investor ask for?

But is Bulgaria really as good a deal as its made out to be? Sure, you can buy a beachfront apartment in a sunny resort for 35,000 but step outside the apartment and what have you got? Resorts like Sunny Beach, the largest of the Black Sea tourist hotspots are devoid of character and charm, much like the rest of the country. The 8kms of beach that makes up the resort is spattered with concrete blocks built ad hoc along the coastline with the sole aim of attracting foreign cash. Move away from the resorts into the towns and cities and the influence of the communist era is vividly apparent in the bland former communist blocks that define much of the local architecture. Many consider Sofia, the country's capital, a run-down dilapidated city and one most definitely not famous for its sites and culture. Not surprisingly, the tourist industry hasnt developed as it has done in some of Eastern Europes more attractive cities and so Sofia remains one of the cheapest capital cities in Europe in which to buy property.

While the situation is improving and efforts are being made to regenerate the city, its not happening quickly enough. One tenth of the population live in Sofia and young Bulgarians are fleeing the country in thousands. It is estimated that more than one million Bulgarians live abroad, forced to seek better opportunities in more developed economies. In a country with a population of only 8 million, this is a significant figure. The implications are quite apparent too. If Bulgarians are leaving the country and foreigners continue to stimulate development by buying cheap properties in places like Sofia, supply will greatly exceed demand. If developers continue to build at existing rates and Bulgarians continue to leave at existing rates, some predict many thousands of empty apartments in five years time.

Another measure of a healthy property hotspot is the number of individuals and families relocating. Every year, hundreds of thousands of people relocate to Dubai, another popular emerging market. Families stay away from Bulgaria. An extremely underdeveloped educations system, run-down schools and the language are obvious put-offs for expats considering a new life abroad and these are issue not likely to change in the near future. Educational facilities are quite often low priority on the government agenda in growing economies. Despite Irelands miracle success over recent years, many of its rural schools are still in need of renovation and this remains a contentious grass roots political issue in many of the rural communities.

While pending EU membership is contributing to major reforms in Bulgaria, weeding out corruption and improving economic and bureaucratic structures, that fact remains that EU membership is not necessarily the magic wand that will turn Bulgaria into the new Ireland or Spain. Bulgaria has worked hard to meet the deamnds of Brussels so far fulfilling 26 of the 30 requirements for EU membership and like many of the new EU states aspires to be the next Ireland. Unlike Ireland prior to receiving EU funds, Bulgaria does not have a fully developed commercial/financial base. Bulgarians have until this year been unable to access mortgages. Ireland also had a relatively small population that helped spread the benefits of direct foreign investment. It managed its EU aid well, pushing funds in projects of lasting value. The property boom was created on the back of a well-managed economy that rapidly increased growth in income per head. Unlike many of the new EU members, Ireland did not rely on the property market to boost and stimulate the initial stages of economic development. The only country that has succeeded in doing this to date is Dubai and many agree that this speculator driven market is in danger of overheating leading to a much feared burst bubble!

Leaving these macro issues aside, Bulgarian property investment poses problems at the micro level too. While buying a new build might be straightforward enough, buying older homes not only raises issues with the need to create a company with which to buy the land but also raises concerns about title. It is not unusual for older Bulgarian properties to have multiple owners. All owners must agree before a sale can be agreed and ensuring that the title is legally and rightfully transferred can be a tricky process. The last thing you want is to move into your new mountain home, painfully restored to find Mr. X knocking on your door six months later claiming he still has part ownership of your new home.

For those who do wish to invest in Bulgaria, the safest option is to buy properties on the ski slopes or properties on the Black Sea coast where rental income is tourism driven and high capital appreciation is more likely. The tourist season is longer in the ski resorts and so slope properties offer better rental yields. Bear in mind when buying older homes that the resale market in Bulgaria has not yet developed. With so many developers offering new and off-plan property, single houses sell far less quickly and those interested in second hand homes are usually bargain hunting at the lower end of the market.

What I have tried to do in this article is combat the blind optimism that many investors seem to develop when they find what they believe is a bargain property hotspot. Sure property in Bulgaria is extremely cheap but a bargain is defined by value for money rather than low cost and there is still a great amount of uncertainty about Bulgarias future. All going well, the country will find the path to success and develop into a strong and competitive economy. My word of caution is that it may not shine as brightly or as quickly as investors anticipate.