Buying overseas: A bigger splash

With island retreats for less than £100,000, the Caribbean has never been so tempting. Laura Latham finds the hottest destinations

There was a time when only the very rich could dream of owning a property on a Caribbean island. How times change. Pick your spot carefully and you can now get a beachfront apartment or hillside cabana for less than the price of a two-bedroom flat in Marbella, thanks to a weak US dollar, the arrival of cheaper, more frequent flights, and the huge increase in the number of homes available.

Darren Milne, of Caribbean Dreams, a family-run firm that sells across the Caribbean, has seen a huge rise in interest over the past few years. From well-worn tourist destinations such as Barbados and Antigua to relatively new locations such as the islands off the coast of Honduras and Venezuela, there is now a constant stream of buyers aiming for bargains that come up for sale, or for cheap off-plan purchases.

"Eastern Europe is pricey," he says. "There aren't many bargains. When you compare the prices in southern Spain with what you can buy in some areas of the Caribbean, it's a no-brainer."

It's still possible to buy apartments here for less than £100,000; some small villas cost less than £200,000 if you're prepared to stay away from the most popular, overpriced spots, such as the west coast of Barbados. There are even more affordable homes on the the south coast. "The west coast is developed to its limit and is very expensive," he says. "But on the south coast, there are new resorts that cost £90,000 for a studio or £250,000 for a two-bedroom villa."

Grenada is another island that has crept up in price thanks to several high-profile resorts. Its minister for tourism is keen to keep the island exclusive, so you won't get much for less than £250,000. But it's still possible to find low prices if you're prepared to ditch the five-star branding. Milne says he's happy to put people in touch with a "nice little development" where one-bedroom apartments start at £90,000 and small bungalows start at £150,000.

Property Frontiers is a firm that specialises in emerging markets. Its director, David Cox, has extensive knowledge of the region. He claims islands such as Grenada, St Kitts and St Vincent are good buys, since development will be restricted in future. A budget of less than £200,000 offers a choice of properties in upscale locations. These islands may not have such good travel connections, but the costs are lower, there's less development and there's realistic potential for good capital appreciation.

There is a split between established and expensive destinations such as Barbados, Antigua and St Lucia, and those considered cheap and cheerful, such as Margarita, off Venezuela's coast. In Antigua, £150,000 will buy you an entry-level apartment in the popular Jolly Harbour development, but the same money could get you a larger home on Margarita, where a two-bedroom property can cost from £35,000 and a four-bedroom, four-bathroom house from £100,000.

The Dominican Republic is also highly affordable, despite recent price rises. It's possible to buy a two-bedroom apartment for £70,000 even in a popular location such as Cabarete, and you can find private houses for sale from £50,000.

Cox suggests the Dominican Republic for those who want a cheap, fun bolthole and don't mind big-resort developments. Margarita is cheaper, but that's because it's part of Venezuela, and the possibility of political and economic instability puts buyers off. The same goes for the islands off Honduras, a new market popular with US buyers. The diving is fantastic, but it's considered a gamble.

If you want to steer clear of resorts, there is a lot of existing property being sold through local agents, and at prices as low as £30,000. But Milne advises caution, saying price isn't the only thing you need to consider. "Some islands have security issues in certain areas, so be careful where you buy, especially if your home will be left empty for long periods," he explains. Try to avoid Kingston in Jamaica and Santo Domingo in the Dominican Republic, and be careful in the northern areas of St Lucia. "Also," adds Milne, "if you're planning to rent your home out to tourists, they often won't be interested unless you're in a resort, since they want access to beaches and shops."

Cox agrees but adds that there are great savings to be found, with individual residential properties and many islands perfectly safe to own in. He also thinks it might be better for those visiting for several months or relocating. "It can be nicer if you're living there to be part of a community and experience genuine Caribbean life, which won't happen if you're in a holiday resort."

Property Frontiers, www.propertyfrontiers.com, 01865 202 700; Caribbean Dreams, www.caribbeandreamsproperty.com, 01708 223 877; Winkworth International, www.winkworth.co.uk, 020-7691 4269

Buyers' guide

* Legal practices and ownership regulations for non-nationals vary between islands and also depend on whether the island was a former British, Dutch or French dependency. So make sure you research the buying process in your chosen location thoroughly.

* Some islands such as St Lucia and Margarita offer tax breaks to encourage overseas investors. On smaller islands, such as Grenada, some developers have negotiated independent tax benefits for buyers.

* If you're buying a non-resort property, make sure your lawyer checks all title deeds, registration documents and ownership claims just as you would in Europe.

* The length of time you can reside without a visa varies between islands. Barbados and Antigua, for example, allow up to six months, but in Grenada it's only three.