More than two-fifths of Britons are interested in buying a property abroad, but many are choosing the wrong destinations if they want to make money.

Most people keen to live overseas say they would choose Australia or New Zealand as their destination of choice, according to Bank of Scotland International. And for those looking to buy in Europe, the traditional preference for Spain and France among Brits still holds.

The attractions of these destinations are manifold if you are seeking a laidback lifestyle that includes sunshine, beaches and fine wine, and they are ideal for buyers looking for a retirement or holiday home.

However, a survey from researchers Savills and holiday-rentals.co.uk shows that more than half of people buying property abroad do it for investment purposes, and those in the know are looking elsewhere to make a profit.

"More than half of all respondents cited investment as the main reason for purchase, with rental potential being the most important financial consideration," says Lucian Cook, director at Savills Research. "With this in mind, purchasers are increasingly looking further afield to emerging coastal destinations where entry into the overseas homeownership market is currently more affordable."

Alexis de Belloy, managing director at holiday-rentals.co.uk cites Bulgaria, Croatia and Morocco as markets where there has been a marked increase in investment. Properties in these destinations have benefited from capital growth (profit made from rising prices) in recent years, but Alexis says they can also generate good rental returns.

"Provided sufficient research in to the location is carried out, rentals can make a significant contribution towards costs," he says. "For example more than half of holiday-rentals.co.uk clients successfully book at least 17 weeks per year and 86 per cent at least ten weeks."

Developing countries outside Europe can also offer good investment opportunities. The beach haven of Goa in India, for instance, has great promise. Goa has toned down its hedonistic party reputation to appeal to international investors. Properties there rose by 25 per cent between 2004-2006 and are expected to rise 15-20 per cent annually in the next five years.

"Goa represents excellent value for money," says overseas property specialist David Redfern. "Where else in the world can you buy a quality property for less than £6,000? The rental returns are set to be very strong, making it a great location for investors wanting to build themselves a property nest egg."

Properties in countries with currencies pegged to the US dollar are a good buy just now, as sterling trades at almost two dollars to the pound. These countries include the US, of course, but there is also value to be found in the Caribbean, China, Malaysia and Belize, among others.

But currency exchange rates can fluctuate in a short space of time. To make the most of the current dollar/sterling rate, you can lock the rate into a forward contract', which means you effectively buy your currency now and pay for it later.

These contracts usually ask for a 10 per cent deposit and are offered by some foreign exchange specialists.

"Most property purchases abroad take between eight and 12 weeks to complete, so people need to think about currency fluctuation between the time of signing the contract and the final payment actually being sent," says Mark Bodega, marketing director of foreign exchange service HIFX.

"Forward contracts are a great way for people looking to buy overseas to take advantage of the current favourable ex-change rate."

Buying property abroad can be complex and should not be done without extensive research, the services of a reliable legal expert, and specialist advice. Be-fore taking the plunge ask yourself these questions: How much do you want to spend? Seek financial advice if you need to arrange a mortgage or finance.

What do you want to use your property for - holidays or retirement, investment, or a bit of both?

Will it be necessary to rent out your property to help with mortgage repayments?