Research conducted by Assetz has found that France and Cyprus lead the way as Europe’s leading property investment hotspots.

With a minimum deposit of only 15 per cent of the property price, France offers a staggering 92 per cent return on cash invested, says the property investment company.

Yields are stable at 7 per cent and leaseback schemes offering lower guaranteed rental income are available at many locations where the government is keen to attract tourism into the area.

The report also suggests that Cyprus is currently a hotspot for property investors, with prices in Southern Cyprus rising by 18 per cent in 2004.

With entry to the Euro beckoning in 2007/8, Assetz expect property prices in Southern Cyprus to rocket even further.

Rental yields in Southern Cyprus remain at 8 per cent and with a year-round rental market in some parts of the island, investors can expect a 72 per cent return on investment, says Assetz.

Investors looking to cash in on the Bulgarian property boom will need a minimum deposit of 30 per cent of the purchase price, and should not be seduced by promises of doubling their money in one year, the report warns.

Stuart Law, managing director of Assetz, comments: "Investors should be cautious in Bulgaria’s immature market. Property prices are growing significantly in the more established areas such as the Black Sea coastline and the major ski resorts, but many of the apparently ‘bargain’ deals citing properties for under €30,000 will be located in the more rural areas and are unlikely to enjoy such high growth rates and certainly not high rental yields."

Capital gains in Bulgaria last year stood at 20 per cent, but those considering investing in Bulgaria should be aware that the French and Dutch ‘No’ votes in the recent referendums on the EU constitution could have affected the country’s chances of joining the EU as planned, says Assetz.

If Bulgaria does not join the EU, prices are unlikely to continue to rise at the current rate, warns the company.

Assetz has also warned potential buyers looking to invest in the United States.

"With interest rates rising fast in the USA and a widely forecast faltering in property price growth, Florida is a risk for investors who would gain on rental income alone and would therefore be forced to consider only a long-term investment strategy," says Mr Law.

"I would recommend caution in America. The property boom was based on extremely low interest rates, which are now rising in an effort to turn the heat down on the housing market. Buyers are realising a period of instability is pending, which will trickle down to affect the resale market in the States fairly rapidly."