Think owning your own private island is only for the rich? Not necessarily.
There are plenty of islands up for sale for less than the median price of a U.S. home — $210,800 for existing homes in February — if you can largely put your dreams of tropical beaches on hold. Wooded lake or river islands and rocky coastal islands are the most common, affordable option, although we also found four islands in typically beachy locations.
Still, buying an island is not like buying a home. For the most part, you need to have cash on hand. Not many banks lend for the purchase of an island like they do for a house, says Farhad Vladi, owner of brokerage firm Vladi Private Islands. In some cases, the seller might offer financing for buyers.
In Canada, some banks may finance up to 60 percent of the purchase, while other banks may back a fully operational business being run from the island, says Chris Krolow, CEO of Private Islands Online, another specialized brokerage firm. Otherwise, buyers need “to have enough money,” he says.
Buyers should also be aware of possible obstacles to a purchase depending on where the island is located. In Belize, sales are straightforward, says Krolow, but in the Bahamas, sales of larger or more expensive islands may have to get approved by the government. In New Zealand, locals must be offered the property first before being put on the foreign market.
Other considerations include insurance, which can run between 1 percent to 3 percent of the purchase price in hurricane-prone areas, and maintenance. Krolow says some houses in tropical locations require full-time caretakers, which can cost an extra $50,000 a year. If you don’t have someone looking over the property, you may find your getaway island is practically uninhabitable.
“We went to go see an island in Belize that had been completely cleared four years before,” he says. “When we saw it, it looked like nothing had been done. The mangroves were over 10 feet high.”
If you’re seriously considering an island purchase, narrow down your choices using your budget and geographic preferences, says Vladi. Think about how accessible you need to the island to be to the mainland. If you have a bigger boat, you can go further offshore. Know what the wild- and plant-life are on the island, along with the locals on the mainland.
“Most important, rent an island first before you buy,” says Vladi. “Make sure you love an island and you can deal with it.”