These days, £120,000 does not stretch to much when buying property in Dublin. But for that sum, you could buy a three-bedroom home in Florida with its own private pool. Or easily afford a two-bedroom apartment in the sunny south of Spain. Discouraged by the continued escalation in Irish property prices, more and more buyers are investing in property overseas. Spain is easily the most popular destination for Irish buyers looking for holiday homes, but the more adventurous are going further afield - Florida and the Algarve are becoming increasingly popular.

But buying property abroad is not without its risks, and investors would be advised to take care.

As with any property investment, location is crucial and buyers should ensure they purchase in a good area. It is also important that buyers know what it is they want - do they require strong rental income, good capital appreciation or are they simply seeking a home-from-home where they can spend part of the year.

Properties in certain parts of the Costa del Sol in Spain have been appreciating by an average of 20 to 25 per cent per year. But rental levels are not as strong as those on offer in Florida where homes near Disney World, which attracts up to 33 million visitors a year, can rent for up to 10 months of the year.

However, capital values in the US sunspot have not performed as strongly as in Spain, rising by just 5 to 10 per cent annually.

Also, buyers who need an income to offset their costs should ensure they get expert local advice so their properties will be easy to rent.

Ms Therese Mullane, sales and administration manager with Florida Villas Direct, says that those buying in Florida should really be looking for a furnished property with a private pool, close to Disney World. The company, which has sold some 70 homes worth $15 million (€14 million) in the area over the last three years, is currently offering such properties at a cost of around $168,000. "People should be careful. You may be offered a price that seems low but it may not include furniture or pool, just four walls," she says.

More importantly, perhaps, buyers in Florida should ensure they buy in a short-term rental zone. Finding yourself with a house in an area where you cannot legally rent it out for holidays could be a problem.

It is also useful to be aware of what is the norm for the locals.

Ms Mullane advises would-be Irish buyers, unfamiliar with what's involved in maintaining a swimming pool, to check that a pool heater is included in the price - having to buy one afterwards could cost up to $7,000; swimming in an unheated pool in December, even in Florida, is not a tempting option.

Properties should also be close to airports that can be regularly accessed from Ireland, while in places such as Spain, amenities are important.

"We recommend that people always have access to a pool. Access to a beach is desirable, as is access to golf," says Mr Jason Higgs, of HD International Properties which specialises in houses in Spain, the Algarve, France and Florida.

Typically, two-bedroom apartments in the area around Marbella cost from £90,000 upwards, although in areas such as Torremolinos, they sell for as little as £50,000.

Once you've decided where and what to buy, the next problem is actually doing it. Some markets are definitely safer than others for the overseas purchaser.

The highly-regulated US market is regarded as one of the safest in the world in which to buy. Builders may ask for as little as 5 per cent of the cost up front, and all money is held in escrow - put in an independent account and not transferred to the builder until completion.

But the Spanish market does not have as good a reputation, although estate agents say much has been done in recent years to tighten up legislation. However, builders may demand as much as 80 to 90 per cent of the costs up front and consumer protection is not all it might be. Mr Higgs advises buyers to deal only with builders offering financial guarantees or whose financial position is assured.

Having good advisers is also important and purchasers should not skimp, particularly when it comes to hiring a good local solicitor.

The well-publicised problem in Spain of buying a property with debts attached can be avoided with proper legal advice.

Once you've got the keys, buyers face another challenge - finding a good management company to look after and let the property.

Many agents will recommend local management firms but purchasers are usually advised to check out what their charges are. But perhaps the biggest danger is that would-be buyers get their sums wrong in the first place. Like any other financial investment, it is crucial that purchasers buy using the correct set of assumptions.

Estate agents say that some Irish buyers in Spain have run into difficulties when they could not rent their properties for as much of the year as they had hoped.

Promises of 10 per cent returns and lettings for 10 months of the year were far too optimistic in certain cases, leaving buyers unable to cover their costs.

Depending on which country you buy in, these costs can be wide-ranging. As well as the cost of the mortgage, they include house insurance, property taxes, the management fee and cleaning costs.

Estate agents say that in Spain, those who buy sensibly should be able to rent out the property for five to six months of the year, making the purchase self-financing with a 50 per cent mortgage. But the longer period for which properties may be let in Florida means buyers can stump up just 20 per cent of the deposit and still break even.

Finally, while borrowing in the currency in which rental income is derived means buyers avoid currency risk, they may find they enjoy less competitive rates than non-nationals or are forced to stump up larger deposits.

And there are also tax implications at home to be remembered. Irish residents are obliged to declare all worldwide income - including rental income - to the Revenue Commissioners.

But if you can successfully negotiate all the hazards and the sums still add up, a place in the sun can not only be rewarding, but fun, and cheaper than buying at home.