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How do you buy a private island?

Easter Island Image Gallery In the Caribbean and South Pacific, even the most modest private island typically costs $1 million or more. See Easter Island pictures.
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It's probably safe to say that most of us have never seriously contemplated buying our own private island. We associate the idea with the very rich and the very famous, who may seek an escape from the public eye or a vacation spot to de-stress from a high-powered career. Case in point: Marlon Brando famously spent his later years in near solitude on his own private atoll in French Polynesia, and Jacqueline Kennedy Onassis frequently stole away to the Greek island of Skorpios, owned by her impossibly wealthy husband Aristotle [sources: Thompson, Maxim]. Even Johnny Depp has his own solar-powered slice of paradise in the "out islands" of the Bahamas [source: Private Islands].

But maybe you've recently won the lottery, inherited millions from a great aunt you never knew existed or made up a story about buying a secluded island getaway to impress a new friend. Suddenly, the idea of buying an island doesn't seem so crazy. Now where to begin?

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Surprisingly, you can still find a small island in the northern United States or Canada for less than $500,000, but in the Caribbean and South Pacific, even the most modest private island typically costs $1 million or more. This price might not sound bad compared to the cost of beachfront property on the mainland, but such low-priced islands may be unsuitable for development or are otherwise undesirable, and their availability is limited. At the other end of the spectrum are properties like the 14-acre (5.7 hectare) Isla de sa Ferradura off the coast of Spain, with its grand 130,000-square-foot hacienda, lush gardens, panoramic views and an estimated value of nearly $40 million in 2006 [source: Clemence].

While the very mention of the words private island evokes images of palm trees, hammocks and frosty umbrella drinks, some of the most inviting and affordable islands can be found on lakes and rivers in much cooler climates. So before you buy your own private escape, one of the first things to consider is your end goal: Do you want a tropical retreat, a prime fishing spot, fabulous snorkeling and scuba diving, a sustainable eco-paradise, or just a private and enduring family home? You'll want to think about these questions and many more before you commit to such a major purchase, so read on to find out how to buy your own private island.

 

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The first thing you should do is narrow down your search to a general region or specific location.
The first thing you should do is narrow down your search to a general region or specific location.
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Before you begin to shop for your own personal paradise, you will want to narrow your search to at least a general region, if not a specific location. Is there a part of the world you've visited and wanted to never leave? Or are you still searching for the perfect island experience? If you've never lived or stayed on an island for an extended time, you might consider a long-term rental as a trial run to ensure that the reality of island living measures up to your expectations [source: Private Islands Online].

Once you've settled on a region, what other factors will you need to consider before purchasing a private island? The first and most obvious is your budget. In most cases, you will need a deposit of 10 percent of the purchase price to enter into an agreement of sale [source: Vladi Private Islands]. And unless you have piles of cash at your disposal, you will also need to arrange for a jumbo mortgage or private financing to cover the remainder of the purchase amount [source: Vladi Private Islands].

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If you plan to build a home or other structures on the island, prepare to spend at least one-and-a-half times the amount you would spend for the same project on the mainland, plus the cost of any utilities and infrastructure that may need to be installed [source: Private Islands Online]. If you are purchasing an island in a foreign country, you will also need to factor currency exchange rates into both the purchase price and the cost of construction or other improvements.

Speaking of utilities and infrastructure, you'll need to find out if the island you're interested in already has power, a wastewater treatment system, and, most importantly, a reliable source of fresh drinking water. Also, how far is it from the mainland or the nearest town? How will you get there and back, and where will you get food and basic supplies? Is the shoreline accessible by boat? Is the island accessible and inhabitable all year, or only in certain seasons? Is there a protected harbor suitable for a dock? The answers to these questions will help you better understand the true cost of ownership and determine whether the practical aspects of life on the island match your desires and expectations.

One advantage of purchasing an island with an existing residence is that a previous owner will have already dealt with at least some of these issues. But whether you decide to go with an established property or find a pristine, undeveloped island to make your own, you still have a few more issues to address. Just how many more? Read on.

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Let's assume that you've settled on a geographic region and decided whether you'd prefer to build new or find an existing home. How do you manage the particulars of island selection and the sale itself?

The Internet is a great source of information about islands for sale, and all listings should include contact information for the sellers or their agents. However, it can be difficult to know what constitutes a fair or reasonable price for something as unusual and individual as an island. What makes one 5-acre (2-hectare) island worth $3.4 million, while the 10-acre (4-hectare) island next door is listed for $1.2 million? To make things more interesting, unlike traditional real estate where a seller might expect to pay a standard 6 percent commission to an agent, in the world of island sales, the broker's commission is often tacked on to the sale price for the buyer to absorb, with no clear way to determine the difference between the actual asking price and the broker's fee [source: Private Islands Online].

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If you're shopping for an island in a territory that's unfamiliar to you, you'd be well-advised to thoroughly research the local market or retain a reputable buyer's agent to do the legwork on your behalf. If possible, talk to locals on neighboring islands or in nearby towns, ask for recommendations for trustworthy buyer's agents and real estate agents, and seek out publications that specifically serve the private island market.

Ideally, the agent you select will be experienced at navigating any cultural quirks or legal issues unique to your island's location. Some countries prevent foreign citizens from owning property but will allow land-lease arrangements [source: Private Islands Online]. Some fail to keep any sort of Registry of Deeds, making it difficult for you to prove ownership at a later date (and making it possible for unscrupulous brokers to sell the same piece of land to multiple unsuspecting buyers) [source: Vladi Private Islands].

You will also want to research (or have your agent research) any pertinent environmental concerns: What impact might new development have on the local wildlife, marine life or ecosystem? Are there restrictions on fishing, boating, construction or other equipment use? What permits are required? Will you and your property be protected from environmental abuses by others?

More questions will undoubtedly arise as you pursue your dream of island ownership, but these guidelines should help you understand the basics of how to buy your own private island.

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Sources

  • Clemence, Sara. "Most expensive private islands, 2006." Forbes.com March 3, 2006. (Feb. 19, 2011) http://www.forbes.com/2006/03/03/expensive-private-islands-cx_sc_0303home_ls.html
  • Forbes Traveler. "10 Top For-Hire Resorts." (Feb. 20, 2011) http://staging.forbestraveler.com/resorts-hotels/expensive-for-hire-resorts-slide-10.html?thisSpeed=25000
  • Maxim Magazine. "Last Tango on Brando Island." December 11, 2008. (Feb. 20, 2011) http://www.maxim.com/amg/movies/articles/57095/lasttangoonbrandoisland.html
  • Private Islands Magazine. "Johnny Depp - Little Halls Pond Cay, Bahamas." Oct. 7, 2008. (Feb. 18, 2011) http://www.privateislandsmag.com/2008/10/johnny-depps-private-island-little-halls-pond-cay-bahamas/
  • Private Islands Online. "How to buy a private island." (Feb. 20, 2011) http://articles.privateislandsonline.com/island-industry/how-to-buy/
  • Thompson, Douglas. "The liberation of Jackie O." The Times. Nov. 7, 2009. (Feb. 18, 2011) http://women.timesonline.co.uk/tol/life_and_style/women/celebrity/article6899879.ece
  • Vladi Private Islands. "About Buying Islands." (Feb. 20, 2011) http://www.vladi-private-islands.de/sale/site/html/cms_de-sale_website_aboutislands1_en-0-0/AboutBuyingIslands.html

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