Prospective purchasers with maturing savings accounts are being targeted by unscrupulous investment companies making exaggerated claims about the returns available on properties purchased in certain eastern European locations, it has been claimed.

"Sales of overseas property is expected to surge, with people using their SSIA money as a deposit, and we believe regulation would help protect them from making unwise investments with unscrupulous operators, " says Gillian Ryan, overseas department manager with international property consultants, Colliers JacksonStops.

"People are buying property without knowing who they are buying it from, without any independent advice or knowledge about the local market and without full knowledge on the cost of the property, tax implications or indeed the local laws concerning inheritance."

According to Ryan, most of these buyers are inexperienced investors attempting to maximise the return on their newly acquired savings.

"Unlike commercial property investors who generally have a strong investment knowledge, the majority of overseas buyers are ordinary people hoping to earn a larger return on their investment then they would in a deposit account or in the Irish property market."

Regulations governing all aspects of investing in overseas property are urgently required, she claims.

"Anyone marketing overseas developments should be obliged to show what due diligence has been conducted on the property developer, the construction company and the market. There should also be regulations covering the information which must be given to a buyer entering into an agreement.

"For example, a clear statement on all costs related to their investment . . . acquisition, ongoing maintenance costs and exit costs . . . as well as an obligation to support any statements on yields, capital appreciation and so on with independent data showing how the market has performed historically, " she says.

Some investment companies are placing press advertisements promising capital appreciation of 50% and rental income guarantees of 10 % on properties in eastern Europe, the Irish Association of Investment Managers (IAIM) claims.

IAIM chairman Gary Connolly says adverts promising "exorbitant rates of return without qualification or return" are now commonplace.

"Figures being quoted seem to be plucked from thin air. If you're claiming capital appreciation of 50%, well, why not make it 100%?

As regards rental income, you may very well be paying 100,000 for a property worth 70,000. So the amount you get back could be the amount you've overspent in the first place.

"I've seen adverts for properties in Bulgaria and Turkey specifically aimed at SSIA holders. Let the buyer beware, there's no shoulder to cry on if your purchase goes pear-shaped."

It is important, Connolly says, to emphasise that there are legitimate businesses operating in these markets.

"But they're up against people who are quoting fairly spurious rates of return. There are a lot of charlatans in this business, and the sooner they're weeded out, the better."

Larionovo is the country's largest seller of property in Dubai, and they have added their warning to buyers to be vigilant about buying abroad.

According to Larionovo, it is vital for potential investors to conduct background research on overseas opportunities where the property and legal systems may be markedly different to the Irish situation.

"As a 100% Irish-owned and run company, we too became concerned with the unrealistic figures quoted for rental returns being made by 'fly by night' operators who come into Ireland for the weekend and are gone by the Monday morning, " says managing director Ray Norton.

Since the new year, Larionovo has sold over 300 apartments to Irish people interested in Dubai.

Solicitor Tom McGrath of Tom McGrath & Associates, provides legal advice for clients purchasing property abroad. He claims there is widespread evidence of just how badly legislation is needed.

"There have been cases where properties have been sold when planning permission has not even been granted, or deposits taken on developments where the developer doesn't even own the land."

Paul O'Loughlin Kennedy is event director of an investment property exhibition taking place at City West at the end of this month.

"I believe that Irish people will invest as much as 6bn in properties at home and abroad in 2006, " he claims.

"Using equity from homes and SSIAs, many individuals now find that they have the funds to enter this investment sector. It is essential that there is proper regulation of the industry to protect individuals and ensure their rights."

The IAIM is now urging justice minister Michael McDowell to introduce legislation governing the sale of overseas property.

"Given the strict standards of advertising and regulation that correctly apply to the investment and pensions industry, we believe a similar code should apply to the sale of property, whether it's overseas or domestic, " Gary Connolly says.

"The reality is that practically anyone can set up a property consultancy company in Ireland and immediately start flogging millions of euros worth of overseas property. If you want to sell life assurance or pensions it would take up to five months to get authorisation from the Central Bank. After that you'd have to fill in a massive amount of paperwork in order to sell a 10 savings plan.

"We know full well that it could take 24 months to introduce legislation regulating the industry. In the meantime, it's important that anyone getting involved in overseas property investment goes in with their eyes open. I mean, we're all over 18. If things were as good as these guys are claiming, I'd be beating down the bank manager's door myself to borrow money to buy up some of this property."