Profile/Bulgaria: Apartments on the Black Sea from €45,000, two-beds in ski resorts from €75,000 and in the capital Sofia from €90,000 - can anywhere be cheaper to invest in? Fiona Tyrrell reports

Bulgaria, with one of the cheapest property markets in Europe, has emerged as a hot spot for bargain hunters who can't afford the inflated prices of Spain, France and Italy in the last 18 months.

In the 1970s the Black Sea Riviera was the playground of communist Russia. Now, following in the footsteps of other former eastern bloc countries, Bulgaria has become top of the list for overseas investors looking for newer and cheaper pastures.

With around 300 days of sunshine a year, an average summer temperature of 27 degrees along the coast, nine UNESCO World Heritage sites, endless beaches, emerald sea, high and leafy mountains and tempting wines, Bulgaria's status as an emerging tourist destination is understandable.

Add to this the low cost of living - a more than decent meal for two can be had for under €15 - and it's clear why Bulgaria is featuring in the "what's hot for summer 2005 lists" around the world. Before it emerged from the Iron Curtain in 1989, Bulgaria was an important tourist destination for Eastern Europe and there was substantial investment in tourism infrastructure along the Black Sea and in the ski resorts.

More than 30,000kms of marked hiking trails were created and many large health spas were developed. However, after what Bulgarians term "the change" in 1989, the country lost its international tourists to other European destinations which could not be reached before. With the loss of markets, the Bulgarian economy also suffered greatly, unemployment soared and inflation rocketed. A reversal of fortunes in recent years means that tourist figures have dramatically increased. However, they have yet to reach the peaks the country experienced in the 1980s.

According to March 2005 figures, more than seven million foreigners visited Bulgaria in 2004, up 11.9 per cent year on the previous year; of this figure, some four million were tourists.

Visitors from Ireland increased by a sensational 82 per cent, according to official figures. The number of visitors from the United Kingdom rose by 61 per cent and there was a 60 per cent increase in Portuguese tourists.

Projections are that the number of foreign visitors will rise by a further 12 per cent this year. Investments in the tourism sector exceeded €500 million in the past five years and this is evident in the rapid increase in the construction of large-scale hotels and apartment developments at the Black Sea coast and mountain resorts as the country prepares for a tourism boom.

These impressive tourist figures have also resulted in a sea change in Bulgaria's property market. Visitors, particularly those from the UK and Ireland, are interested in the region not only as a tourist destination but also as an investment spot.

There has been much interest from Irish investors in buying in Bulgaria. One UK-based investment company - Ready 2 Rent, which attended two overseas property shows in Ireland last month - reported "massive interest" from Irish investors who pledged some €4 million over two days.

Compared to other areas of Europe, homes in Bulgaria are incredibly affordable, with quality new-build apartments on the Black Sea available from around €45,000.

Last year there were reports of property price increases of between 25 and 50 per cent and in advance of Bulgaria's accession to the EU in 2007, appreciation of around 25 per cent is expected by many investors for the next few years.

The focus is on the Black Sea coast - Sunny Beach, Golden Sands and Bourgas and the city of Varna - as well a number of ski resorts. New-build two-bed apartments in Sunny Beach, the largest resort in Bulgaria on the Black Sea, average around €80,000.

In preparation for the country's bid for the 2014 Winter Olympics, big money is being ploughed into the country's many ski resorts, including Pamporovo, Borovetz and Bansko.

A Bulgarian ski holiday will cost you two to three times less than a similar one in France or Austria and you can buy a new-build two-bed apartment in Bansko ski resort for around €75,000.

All eyes are on the capital Sofia, where two-bedroom apartments can be bought for around €90,000.

With Bulgaria's entrance to the EU confirmed for 2007 and large-scale capital investment underway, it is thought that the city could potentially take on cities like Berlin and Prague and become the European HQ for many multinational companies.

Understandably, it is the low prices which are proving to be very attractive for investors. However, although there are opportunities for both city centre and holiday home buy-to-let properties, investors are advised to be aware of the risks involved of buying in an emerging economy - some unregulated agents and builders are looking for a quick buck and capital appreciation can never be guaranteed.

Bulgarian law can be complicated and only allows foreigners to buy buildings but not land. This restriction can be avoided by setting up a Bulgarian company, which then owns the land. Work is in progress, however, to have this restriction removed.

Foreign investors should expect to pay around 3 per cent of the purchase price for legal fees and municipal tax on property sales.

Although there is a foreign investor mortgage package available from Piraeus Bank in Bulgaria, it has rates of around 7.5 per cent and most investors are opting to remortgage to finance their Bulgarian property.