Owning an island is likely to be something that few people would ever seriously consider. While it is exciting to imagine what living on an island would be like - palm trees, sunsets, gentle breezes - most people could never afford to own a piece of paradise. Or could they? With an increase in the number of island properties on the market today, coupled with the many motivated sellers (even island owners have to cover their losses from the stock market freefall), purchasing this exclusive property type may be more affordable than many of us think. For those looking for a different lifestyle and a little adventure, maybe it's time to forget a house - and buy an island.

How To Shop For An Island

The internet is a convenient place to look for island properties. Websites such as www.privateislandsonline.com and www.vladi-private-islands.de maintain current real estate listings of islands that are searchable by location, price and type. The type of island is an important factor, since it will determine if the island is virgin (with no development), what type of access it has (bridge, landing strip or boat only) or if any improvements have been made. It is also critical to determine what type of development, if any, will be permitted on the island.

Because of differing laws between countries regarding ownership and type of leasehold, it will be especially important to perform due diligence when considering an island purchase - with the assistance of a qualified lawyer. Island shopping is not as convenient as driving around a neighborhood with a real estate agent; it pays to thoroughly research and ask all the questions you can think of prior to making the trip to check out the property. (To dig deeper into this topic, read 5 Things Every Real Estate Pro Knows.)

Location, Location, Location

Where an island is located has a significant effect on its value. Islands that are private, yet still close to civilization and amenities like shopping, airports and hospitals, are more convenient, and therefore, tend to be more expensive. A beautiful island in the middle of the ocean, far from any facilities and services, will probably be less expensive. People do put a price on convenience, and while island dwellers typically enjoy the privacy and remoteness that an island offers, they also want to be able to buy food and go to the doctor if necessary.

An island's climate is an important consideration when looking for real estate, and it is a factor in the property's value. Islands located in more desirable climactic regions, such as the tropics, may be more expensive to purchase and are generally more costly to maintain due to excessive heat, rainfall and the potential for damaging storms.

While many of us visualize palm trees and white sandy beaches when we think of an island paradise, it should be noted that many of the properties are located on lakes – rather than the ocean. Again, depending on location, these lake islands can be quite exclusive and expensive, or lesser known and more affordable.

Challenges Of Development

Islands that have no improvements will require additional time and money before they become habitable. Finding well water, generating power, creating telephone access and building roads will have to be addressed. So will finding the manpower to undertake all of these projects. Local contractors can assist with determining the feasibility of these projects, and they can provide a time/cost estimate for the work. Generally, the more remote an island, the more creative the process will be in terms of both infrastructure development and home building.

Islands On The Market

A quick look at one of the island property websites reveals that a buyer could spend as little as $30,000 (U.S. dollars) or as much as several hundred million dollars. Usually the properties with immense price tags are for island resorts - places that will be used as a commercial investment rather than as a personal getaway. The smaller islands intended for personal use, however, are often priced similarly to inland properties in desirable locations.

Hog Island, for example, is a 20-acre undeveloped island in Nova Scotia that is on the market for $165,000 - not the millions of dollars many would expect for a sizable island. The most lavish properties are multi-thousand acre paradises slated for golf courses, exotic spas and upscale vacation resorts. (Investing in real estate has become increasingly popular over the last 50 years and has become a common investment vehicle. For more on this topic, see Simple Ways To Invest In Real Estate.)

Come Sail Away

While most of us would assume island ownership to be something completely unattainable, a little research reveals that it may not be as impossible as we think. Inland property values often exceed $10,000-$20,000 per acre, and many of the islands are priced well below that. Certainly, additional costs must be anticipated for infrastructure and building development, but even when all expenses are accounted for, an island nirvana might be more realistic than we imagine. If you have ever thought about island life, it might be worth your while to at least take a look at what is available. You might decide to forget a house, and buy an island.

Catch up on your financial news; read Water Cooler Finance: The Unrelenting Claw Of Bernie Madoff.

Related Articles
  1. Credit & Loans

    Avoiding Red Flags with Online Mortgage Lenders

    Using an online mortgage lender can be convenient, but how do you know you can trust one? Follow these tips to make sure the lender is legit.
  2. Credit & Loans

    How To Boost Your Credit Score To Save Thousands

    One of the first steps you should follow before buying a home is to boost your credit score. And how do you do that? Here, we tell you how.
  3. Credit & Loans

    5 Mortgage Loans You Didn't Know About

    These lesser known mortgage loans are often overlooked by potential home buyers.
  4. Economics

    Real Estate: How the Bubble Will Pop

    This real estate bubble is much different from the last one. Understanding it is imperative if you plan on making any investments.
  5. Credit & Loans

    The Hi-Tech Future of Mortgage Applications

    Three sites that are simplifying your path to home ownership.
  6. Home & Auto

    Best Real Estate Apps for House Hunters

    Your dream home might be only a swipe away.
  7. Home & Auto

    Before You Buy a Home for Your Child: Read This

    It is certainly generous. It can even be advantageous to both of you. But beware of the pitfalls.
  8. Home & Auto

    Are Home Inspections Worth It? - Price vs. Value

    If you’re wondering whether home inspection is worth the investment, the following information will help you decide.
  9. Investing

    Before You Invest in a Rental House with a Friend

    Investment property has advantages, but before you purchase a rental house with a pal, it’s smart to know what the challenges might be.
  10. Home & Auto

    When Is the Best Time for You to Buy a House?

    Making what is likely to be the single most expensive purchase of your lifetime shouldn’t be done on a whim.
  1. Fair Housing Act

    This law (Title VIII of the Civil Rights Act of 1968) forbids ...
  2. Construction Loan

    A short-term loan used to finance the building of a home or another ...
  3. Commercial Real Estate Loan

    definition of a commercial real estate loan
  4. Realtor Property Resource (RPR)

    A National Association of Realtors member benefit providing realtors ...
  5. Housing Choice Voucher Program

    The Housing Choice Voucher Program helps families with very low ...
  6. Warranty of Title

    A guarantee by a seller to a buyer that the seller has the right ...
  1. Can I take my 401(k) to buy a house?

    Once you reach 59.5, you can use the funds in your 401(k) retirement savings account to buy a house or any other expense ... Read Full Answer >>
  2. Can I take my 401(k) to buy a house for my children?

    Under the standard regulations for 401(k) retirement savings plans, you may elect to withdraw funds from your 401(k) for ... Read Full Answer >>
  3. How is market value determined in the real estate market?

    Anyone who has ever tried to purchase or sell a home has probably heard a lot about the property's fair market value, or ... Read Full Answer >>
  4. What does the American Dream mean to different generations?

    The American Dream at its core is the belief that every generation should enjoy greater prosperity than the generation before ... Read Full Answer >>
  5. When should a real estate broker release earnest money deposit funds?

    As soon as an agent or broker accepts an earnest money deposit, he becomes an escrow agent. This means that, in most cases, ... Read Full Answer >>
  6. Why does the loan-to-value ratio matter?

    For mortgage lenders and borrowers, the loan-to-value ratio is an important factor in determining the repayment terms of ... Read Full Answer >>

You May Also Like

Trading Center

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!