I have been looking very closely into Europe’s property markets over the last few years searching not only for value, but for markets and locations that make strong investment cases built on fundamentals.

I have had many conversations with people asking my opinion on buying repossessed villas and apartments in coastal Spain. The main driver for this is generally the fact that these villas are now selling for almost a quarter of the price they did in 2007.

There really are many, many different aspects you should be looking at when investing, ranging from mortgage finance all the way through to taxation. What may appear to be good value on paper is often not the reality.

To buy a property based on the value being 75 per cent cheaper is not enough data on which to base your investment decision. If you can’t rent the property out and you’re paying high property as well as government taxes, the 75 per cent discounted property in coastal Spain could end up costing you a lot of money indeed.

A market I really like is Berlin. Germany has been regarded as a safe haven in Europe throughout the global recession with GDP being five times higher than that across the rest of the Eurozone through 2013. Berlin’s diverse, dynamic and modern economy is fuelled by sectors such as tech, pharmaceuticals, renewable energy, biotechnology and biochemical engineering.

All of this adds up to a thriving job market with very low unemployment levels. Like any city with a strong economy, high income per capita and low unemployment levels, there becomes a strong requirement for housing. After all, everyone needs somewhere to live.

Prices across the Berlin housing market appreciated 9 per cent on average through 2013 with yields steady at over 6 per cent. What I really like about the Berlin market is that the demand comfortably outweighs supply.

German interest rates still remain low and banks are very open when it comes to lending to foreign investors — another key sign which shows confidence in the housing market. With a low entry level compared to other key European cities, Berlin is a market that has the potential to show safe and consistent returns over the mid-to-long-term.

Investors should always look at two key aspects to the investment. The first is ‘who’s your target tenant?’ and the second your exit strategy — ‘who’s your eventual buyer?’. Both are fundamentals for making an educated decision on a property investment — before you invest.

Ideally, I prefer the tenant to be ‘white-collar’ professionals who will respect your property and can afford to pay the rent. You also ideally want a long-term tenant to ensure the maximum income and no void periods for income.

There may come a day when you wish to cash in on your investment property, which does open up a whole new chapter to consider with taxation — notably capital gains tax. However, you should have a strong idea of the demographic of your buyer should you wish to sell. A lot of people invest into various schemes where the only possible buyer is another investor.

We often see this with student accommodation room sales. If your only avenue to sale is to other investors, then it’s probably not the right investment.

A buoyant domestic marketplace is where you should be looking to invest, markets where people living and working are not only renting but are also buying homes as well. London is a great example of this where, in 2013, almost 70 per cent of transactions were from people living and working in the city, with the rest made up of overseas investors. Having such strong domestic activity gives a lot of confidence to invest.

Manchester is the second largest metropolitan area and the fastest growing major city in the UK. There are 1.14 million people working in 93,000 businesses in the Greater Manchester area. Key sectors of Manchester’s vibrant economy include professional services, healthcare, creative and digital industry as well as education.

Manchester has a lower unemployment level than most other major UK cities and an ever-growing demand for property. Prices grew around 9 per cent for residential properties in Manchester in 2013 and with prices still 18 per cent below their peaks, there’s still a lot of value left in the market.

HSBC recently ranked Manchester fourth in their ‘Top 10 UK Buy-to-Let Hot Spots’ list. The vacancy levels in the city are reducing daily and, with proposals for the new high speed rail link into London (H2) looking likely to go ahead, Manchester will continue to outperform and offer very strong fundamentals for investors.

— The writer is the regional head of IP Global.