Buy a Private Island

The process of buying a private island is similar to the process of buying any other kind of real estate, but there are a lot of additional considerations to take into account, such as accessibility and basic utilities. Depending on the size, location, and amenities you are looking for, you could spend many millions of dollars on your private island or less than $100,000.[1] No matter what kind of island you are thinking about buying, be sure to do your research so you understand exactly what you are getting yourself into.

Steps

Deciding What Kind of Island Is Right for You

  1. Think about your needs. Before you start looking for your ideal island, it's a good idea to have at least a general idea of what it is you're looking for. Consider making a list of all of the features you absolutely need, and a separate list of features you would like, but are willing to compromise on.
    • Think about how large of an island you need. If you just want a simple cottage and a private beach, you may be comfortable with a few acres, but if you are planning to develop a resort, you will need a much larger island.
    • Think about what kind of buildings you need. If the buildings do not already exist on the property, be sure to look into building regulations before you purchase the island.
    • Think about the kind of landscape you are looking for. Some islands may have white sandy beaches, while others may have cliffs and dense jungles.
    • It's also important to think about the type of beaches the island has to offer. For example, you may prefer sandy beaches to rocky beaches, or you may prefer a beach that faces the west if you want to watch the sun set. You may also want to think about whether the water immediately surrounding the island is good for recreational hobbies that you enjoy, like scuba diving or fishing.
  2. Choose a location. Location is probably the most crucial factor you will need to consider when buying a private island. Be sure to do plenty of research and choose a location that truly meets all of your needs. [2].
    • Climate is a huge consideration, so make sure you understand what the weather is like year-round. Find out if the area is prone to extreme weather like monsoons or hurricanes.
    • Determine how far away from civilization you really want to be, keeping in mind that being completely isolated may make it difficult to get supplies and get help in the case of an emergency.
    • Also think about the towns or cities that are closest to your island. If you think you might need or want to leave the isolation of your island from time to time, it's best if you enjoy the cultural amenities that the local area has to offer.
  3. Set a budget. Think carefully about how much you can reasonably afford to spend on your own private island, and do your best to stick to your budget. If you can't afford what you really want just yet, consider waiting until you can rather than settling for a less expensive island that doesn't meet your needs.
    • When deciding on a budget, keep in mind that you might have a very hard time getting financing for a private island. Banks are often wary about lending money for these purchases because islands are extremely difficult to appraise. If you choose an island that is close to a well-developed area, you will have more luck getting financing than if you choose a remote island.[3]
    • If you plan on building on your island, it's a good idea to start working with an architect and contractor right away so you have a good understanding of what the costs will be. Building on remote islands is much more expensive than building in a developed area because it's difficult to get all of the materials to your build site.[4]
    • When setting your budget, be sure to consider the costs of traveling to and from your island, maintaining your island, and making any necessary improvements.
  4. Decide if you will rent out your island. You may just be looking for your own personal escape, but if you are thinking about renting your island out to guests, you may have a great way of earning extra income. If this is your plan, there are some additional considerations to take into account, so be sure to do your research and ensure that the island you are looking at will indeed work as a rental property.[2]
    • Work with your lawyer to ensure that you will be legally permitted to rent out your island for short periods of time.
    • Think about how guests will get to your island. If it is very remote, you may need to offer to arrange for transportation.
    • Consider what kind of services you will need to offer for your guests. For example, if the island is remote, you will probably have to offer a cook to prepare meals. You may also want to offer recreational activities.

Thinking About Practicalities

  1. Consider basic infrastructure. If you're looking at undeveloped islands, they will most likely not have any utilities. When developing your island, you will need to invest in systems that allow you to bring the comforts of modern living to a remote area, which can be very expensive.[3]
    • If the island doesn't have electricity, you will need to invest in a solar system and maybe a backup generator.
    • If the island doesn't have a source of fresh water, you will probably need a special purification system to make seawater or rainwater potable. These systems can cost hundreds of thousands of dollars, so be sure to do your research before you finalize your purchase.[4]
    • Creature comforts like cable and cell reception may be very hard to come by if you are far from civilization.
  2. Consider accessibility. When choosing the perfect island, it's important to consider how you will get there. Consider whether you will need to take a commercial flight to get near your island or if you can drive. Once you are in the general vicinity of your island, think about whether you will be able to take your own boat to the island or if you will need to charter a plane.[5]
    • Think carefully about how much it will cost to get from your primary residence to your island and back. If it is too expensive, you may not end up spending as much time there as you would have liked.
    • Be sure to consider how long you will be able to spend on your island during each visit as well. If you want to go for the weekend, it's best to choose an island closer to home, but if you plan on spending months at a time on your island, a 14-hour flight might be no big deal.
    • Remember that water depth is very important. If the water around the island is too shallow, you may not be able to get there in certain vessels unless you dredge the area or build a large dock. It's important to see the island at high and low tides so you understand the true accessibility.[3]
  3. Analyze the existing infrastructure. If you are buying an island with existing infrastructure, it's important to have a thorough inspection to make sure everything is in good working order. It's always best to have a good idea of what repairs will be needed before you purchase any property.
    • In addition to assessing the structures, your inspector should take a close look at the existing utilities. Repairs to these systems can be extremely expensive.
    • It's also a good idea to confirm that the buildings have all necessary government permits.
  4. Investigate environmental restrictions. Some islands have very delicate ecosystems that can be disturbed by construction. For this reason, there may be some restrictions on what you are allowed to build and where. To be safe, it is a good idea to have the seller obtain the necessary governmental approvals for the kind of development you are interested in. You should also consider hiring a professional to conduct and environmental impact study.[2]
    • Some islands may have protected areas if, for example, endangered species inhabit the area. This would prevent you from building any structures on that part of the island.[3]
    • Be sure to consider non-legal restrictions as well. For example, you should find out how high the water has been known to rise in order to avoid building your house in an area that is likely to flood.
  5. Find out what permits you will need. Depending on what you plan on doing with your island and where it is located, you may need to obtain permits from the government. It is a good idea to find out about what permits are required and what the process is for applying before you purchase the island.[2]
    • You may need a building permit if you want to construct a new building on the island or modify an existing building. There may be certain restrictions regarding the size of the buildings you are allowed to construct or the manner in which they must be constructed.
    • You may need additional permits or licenses if you plan on running any kind of business from your island.
  6. Decide if you will need a caretaker. Depending on the location of your island and the amount of maintenance it requires, you may need to hire a caretaker to look after it when you are not there. Since an island is isolated, it is hard to protect against unwanted visitors and squatters without one. A caretaker can also look after buildings and equipment, making sure they're all in good order and condition.[3]

Conducting the Transaction

  1. Find a trusted broker. In order to start shopping for a private island, you will need to work with a real estate broker. Choose a broker who has a lot of experience in buying and selling private islands, as these properties pose unique challenges to buyers. If you don't know of any brokers, you can search for one and read reviews online.[3]
    • You can search listings for private islands online, just like you can for other types of real estate, but not everything is listed online. Your broker will have access to all of the listings, both public and private.
  2. Get a lawyer to help guide you. If you are thinking about buying a private island outside of your country of residence, it's a good idea to consult with an experienced attorney. Laws regarding property ownership and residency vary dramatically from country to country.[2]
    • In some countries, non-citizens are not permitted to buy land outright, but are permitted to purchase long-term leaseholds for periods of up to 99 years.
    • Some islands may also have strict environmental codes that restrict you from developing on them.[4]
  3. Start searching for an island. You will probably need to devote a lot of time to viewing different properties when you are shopping for an island. Your broker will take you to see islands that meet your criteria, and you will need to choose the one that works best for you.[2]
    • Don't be too surprised if you are unable to fly to a property when you planned to due to bad weather. These kinds of delays are par for the course when you're dealing with remote islands.
    • Consider bringing along a trusted friend or relative to help you evaluate your options.
    • Never buy an island without seeing it first! There are all sorts of surprises that may not be evident in the listing pictures.
  4. Evaluate the asking price. It can be tricky to determine whether the price of an island is fair or not because not many are bought and sold, so you may not have much to compare the price to. Work with your broker to evaluate comparable properties as much as possible.[2]
    • At the end of the day, it's most important that the island is worth the price to you, so don't pay more than you are comfortable with.
    • Try not to get too emotional about this decision. If the island is over your budget or doesn't have the features you are looking for, keep looking.
  5. Make an offer. Once you find the island of your dreams, it's time to make an offer. The exact process for conducting a real estate transaction will depend on the island's location, but your broker will guide you through the process.
    • If you think the island is over-priced, you can offer a lesser amount. The seller has the option to accept your offer, decline it, or counter your offer with a new one.

Tips

  • If you can't afford to buy your own island, but you still want to experience being completely alone on an island, you can rent one for a few days.[5] You can also consider long-term leases.[2]

Related Articles

Sources and Citations

  1. ↑ http://money.cnn.com/2015/07/21/real_estate/how-to-buy-an-island/
  2. ↑ 2.0 2.1 2.2 2.3 2.4 2.5 2.6 2.7 http://www.privateislandsonline.com/private-island-buyers-guide/island-buyers-guide.pdf
  3. ↑ 3.0 3.1 3.2 3.3 3.4 3.5 http://www.businessinsider.com/how-to-buy-a-private-island-2015-4
  4. ↑ 4.0 4.1 4.2 http://www.bloomberg.com/news/articles/2015-07-31/you-just-bought-a-private-island-now-what-
  5. ↑ 5.0 5.1 http://www.privateislandsblog.com/2010/10/29/how-to-rent-your-own-private-island/
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