Many people dream of owning a villa in Umbria, finca in Andalucia or apartment in Paris. Nevertheless, it remains a money minefield - we have all heard the horror stories of naive couples buying homes without deeds in earthquake zones.

Recently, more savvy homeowners have seen the value of their homes in southern Spain tumble with the credit crunch. Here is Times Money's quick guide to purchasing property overseas.

Work out a budget

How much you can afford to spend hinges on several factors - crucially, whether the property will be a main or second home or an investment for rental income.

How to buy a property overseas

BACKGROUND

• How to move to France

• How to move to Spain

• How to transfer money abroad

As in the UK, the price of a home is often much lower than its real cost. Additional expenses include transaction costs, purchase taxes and professional fees - for lawyers, surveyors, translators and architects, for instance. These vary by country, so read our specialist guides to France and Spain.

There will be continuing costs, even after a mortgage is repaid. These include insurance, service and maintenance charges. None of the above takes into account the cost of restoration of older properties, which may be several times the asking price. An independent financial adviser (IFA) can help you to draw up a financial plan to include these factors.

Exploratory visits

Financial planning in the UK is an important foundation, but legwork in the country, or countries, you are considering is critical, too, and may cost several thousand pounds in flights and accommodation.

It is important to look at a number of properties and to speak to Britons who have already bought in the area. Word-of-mouth advice is invaluable and will reduce your chances of being ripped off.

It is riskier to buy in countries or areas with few other foreign homeowners to guide you, although these may have lower prices and attract fewer conmen. To find a reliable agent, contact the Federation of Overseas Property Developers, Agents and Consultants (Fopdac), which has recently joined with the National Association of Estate Agents (NAEA).

Cheap flights

Access to cheap flights may be an important selling point for an area. Bear in mind the potential consequence of their future withdrawal, however. The chief executive of British Airways recently predicted that higher oil prices would lead to the death of the budget airline. Even EasyJet has said that there are too many cheap carriers in Europe.

Find finance

Unless you can afford to buy outright, the obvious finance routes are remortgaging your UK property or taking out a new mortgage on the overseas property via a UK or foreign lender or broker. The former puts your main home at risk and may be more expensive than a foreign loan. The latter, however, entails more administrative hassle and you could be exposed to currency fluctuations.

For the best exchange rates on sizeable transactions, it is usaully cheaper to use a specialist currency exchange provider rather than a bank or wire transfer service. For more on the services available, read our guide to transferring money abroad.

Legal matters

The buying process varies by country and can be fraught. In some areas it may difficult to establish that the person selling a property actually has title, for instance. It is important, therefore, to find a good lawyer.

The Law Society can help you to find an English-qualified lawyer who does work overseas. Contact details of lawyers who specialise in overseas property can be found at www.fopdac.com.

Tax issues

Buying overseas can have a number of tax implications - in the country of purchase and in the UK. For instance, people who sell a holiday home are liable to capital gains tax in this country because it is not their principal private residence.

British accountants can advise. To find specialists, contact the Institute of Chartered Accountants in England and Wales (ICAEW).

Five news stories

Bargain hunters return to the Costa del Sol

Legal problems with Northern Cyprus property

Property values in France are holding up

Property prices stall in Spain

The end of cheap air travel

Five features

Where to buy overseas property in 2009

Holiday bolt holes that make a difference

Overseas property: where, how and what to buy

The best places to buy an investment property overseas

Property hotspots abroad

Five websites

Federation of Overseas Property Developers, Agents and Consultants (Fopdac)

National Association of Estate Agents (NAEA)

International Consortium of Real Estate Agents (ICREA)

The Law Society

Institute of Chartered Accountants in England and Wales (ICAEW)