Overseas property: Ready for take-off

As new budget airline routes open up, intrepid property buyers are filling the departure lounges, writes Graham Norwood

The measure of a good overseas investment property is not always how much the sun shines or how low prices are. Increasingly, we look at budget airline routes.

	Hot destination: The mediaeval city of Cluj in Transylvania is now just a short flight away from Luton airport

This year, the UK's 11 budget carriers are launching 29 new routes and where budget flights go, eager estate agents and second home buyers follow. High flight frequency, low cost, and ease of travel are key requirements, especially if an investment property is to be rented out successfully.

On those criteria, Romania seems destined for success. Easyjet has started flights from Gatwick to Bucharest. Wizz Air is expanding its services from Liverpool and Luton to Bucharest, as well as launching a new route from Luton to Cluj in the Transylvania region. Romania has seven budget airlines of its own and is already a busy destination for low-cost services from elsewhere in Europe.

All this is good news for investors who got in early, such as Philip Groves, a marketing consultant. He is buying a £50,000, one-bedroom apartment in mediaeval Brasov, Romania's seventh largest city, of just under 300,000 people. He says Romania is a good buy because budget flights are opening up tourist and business markets, EU accession will fund an improved infrastructure and Romanians have high levels of equity - they were "given" their homes when communism fell - and low levels of debt.

"It's a strong domestic market so I'm not reliant on international factors to provide tenants or capital growth. Plus there's an airport being built close by which is key, as it will encourage the development of a nearby ski resort," says Philip, who also has investment properties in western Europe.

He says he took precautions when buying. "I chose Anglo-Romanian Developments, an agency with experience in the UK as well as overseas, and the builder is part-Romanian, part-Belgian. There's also good security at the development - it's common in most new schemes to have 24-hour concierge services." Watford businessman Richard Rice is following suit, having just bought a holiday home at Mamai, a Black Sea resort near the port of Constantza, a three-hour drive from Bucharest. "I'm confident I'll let it for holidays short term and that it'll be a good long-term investment," says Richard, who adds that the area is teeming with east Europeans, Germans and Italians, most arriving on budget flights.

Arc Property, a London estate agency specialising in emerging markets, sells homes in seven east European locations and says Romania is the most sought-after. "Few people so far want holiday homes, but interest in investment properties has soared in the past year. One-bed buy-to-let flats in Bucharest go from about €100,000 (£75,000) and prices rose 27 per cent in the first half of 2007 alone," says Alastair Norman, director of Arc.

Buyers taking advantage of budget airlines - return flights from London to Bucharest have fallen to around £65 including taxes - can get a rundown house in some areas for €10,000, while those in rural spots around Bucharest cost €100,000. New build three-bed villas near the capital cost €200,000.

Buying a home is relatively straightforward. "Get an independent solicitor, never sign anything you don't understand, ensure documents are translated into English, and if you buy new-build, only accept payment systems that protect 'stage payments' as you buy," explains Peter Esden of The International Law Partnership, a legal firm advising Britons buying overseas. He says security for properties left empty tends to be better in resorts and tourist areas than in rural areas. The infrastructure of transport, local shops and facilities in Romania "lags a little behind Bulgaria".

A new book, Buying Property In Romania (£9.99, www.bookshaker.com), strongly advises owners of second homes to take out insurance not only against accident and burglary but also against floods, which are common in some regions.

Another big winner, with a plethora of new budget routes this year is, perhaps surprisingly, France, with new flights to Rennes, Beziers, Bergerac, Pau and Nantes. Savills, an estate agent selling in more than 50 countries, has polled 12,000 British owners of European property and discovered the average price of holiday homes near airports was 39 per cent higher than comparable properties further away. When let out, near-airport properties secured 30 per cent higher rents, too. "Travel costs are lower, so holiday makers are willing to pay more. This is clearly important to investors as these properties are generally easier to let and less likely to suffer long void periods," says Jacqui Daly, of Savills' research department.