Late last month I decided to book a last-minute half-term break in the Bulgarian ski resort of Bansko. The choice was partly inspired by professional curiosity to visit a place heavily hyped as the next property El Dorado. But, to be honest, my real motivation was the hope of getting a bargain holiday.

Flicking through various online rental websites I came across dozens of British-owned properties. And, with just a few days to go, almost all were vacant. The result, after a little haggling: a week for four in a spacious two-bed chalet in the grounds of a four-star hotel complex for just £300.

All good news for penny-pinching holiday-makers such as myself, but what about the owners of such properties — the tens of thousands of Britons who have bought “investment” homes in Bulgaria and other so-called “emerging” markets in recent years?

The main attraction, in most cases, has been the prospect of capital gains — which in many cases have been realised: implicit in the deal, though, has been the expectation of being able to cover the mortgage by renting out the place for 10, 12 or even more weeks a year.

The reality, not just in Bansko but in other self-styled property hot spots across Europe and beyond, is often different. A glance at websites such as www.holidaylettings. co.uk or www.holiday-rentals.co.uk suggests some owners find it difficult to achieve more than a few weeks.

Factor in all the costs of short-term letting — from laundering the sheets to having someone meet and greet your guests — and the chances of meeting your outgoings, let alone making a profit, slip away.

David Lawrenson, a property consultant and author of Successful Property Letting: How to Make Money in Buy-to-Let, says many investors who branch out abroad after doing well in Britain wrongly assume that just because a property is cheap, it is also good value. “I’ve come across a few people who have bought to let abroad but who seem to have left their brains on the plane and forgotten the basics,” he says.

Nor is the problem confined to holiday lets. If anything, the market can be even more difficult in central and eastern European cities such as Prague, Budapest or Tallinn, where British investors have bought with the aim of renting out long term to expats or affluent locals.

Again, almost regardless of where — or what — they have bought, the capital gains are likely to be there, especially if they have bought off-plan. Finding a tenant to move in once the property is finished, however, may be more difficult. It is not just British investors, won over by rising prices, low interest rates and easily available mortgages, who have been persuaded to buy. The locals have, too. The result: a dwindling pool of potential tenants and falling rental yields.

John Howell, senior partner in the International Law Partnership and foreign policy expert, blames agents for overoptimistic predictions, especially in relatively new markets such as Bulgaria.

“People are being grossly oversold,” he says. “If you are buying in a holiday destination in an emerging country, then for the first two or three years you are unlikely to do better than 3%.”

The reason: most potential tenants first visit such places on package tours, only actually renting a property on a second or third visit.

“In more developed markets such as Spain or France, you should earn 5% if you manage the property well,” he adds. “But it does depend on you being organised, using a good agent and putting in time and effort.”

Higher returns may be possible, Howell says, but only in places with year-round tourist appeal, such as Paris, or in Berlin or other German cities where low property prices combined with a long tradition of letting have kept rents high.

So what is the solution? One is so-called leaseback developments, a concept pioneered in France, in which you buy a property and lease it back for 20 years to the developer, receiving not just a guaranteed return but also the right to occupy it yourself for several weeks. But few schemes these days pay more than 4%.

Many developers offer “guaranteed” returns of 5%, 6% or even 7%. In some cases, especially in cases of properties within hotel complexes that have genuine rental potential, these can be a good deal.

Too often, however, such guarantees — especially if only for a limited period — are financed simply by ramping up the selling price. In other words, the developer is simply giving you back your own money over one or two years. As always, buyer beware.

- Peter Conradi’s book, Fly to Let, is available at The Sunday Times Books First price of £11.69 (RRP£12.99), with free delivery, on 0870 165 8585

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