Owning an island has never been this easy. Asian Property Review examines what to look out for when buying your dream island.
Island buying seems to be the ultimate status symbol among the rich and famous. Award-winning actor, Leonardo DiCaprio, got his 104-acres Blackadore Cay Island for USD1.75 mil. Supermodel, Heidi Klum was recently reportedly showing interest in buying a 3.5-acre Tavern Island just off the coast of Connecticut for USD11 mil. Johnny Depp is a proud owner of a 45-acre tropical island called Little Hall’s Pond Cay in the Caribbean that he purchased for USD3.6 mil.
For some, owning an island serves as nothing more than an ostentatious display of wealth, a symbol of status, privacy and even sovereignty. But for others, owning your own piece of island paradise—even if it starts off as merely a private resort— opens up a world of business opportunities.
Sir Richard Branson incidentally started his road to riches in real estate from an investment into an island back in 1979. The 28-year-old Branson had stumbled upon an opportunity to own one of the British’s Virgin Islands and made a bold decision to purchase it despite not having enough capital. To cut a long story short, within 3 years, and after spending USD10 mil, he built Necker Island, a luxury resort that has become synonymous with so many big Hollywood names. A night at the resort which can accommodate 30 people will set you back USD65,000.
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This does not mean that only the rich and famous can afford to make such investment. In some parts of the world, investing in a private island is a lot cheaper than actually buying an apartment—these islands can be purchased for under a million USD.
In Asia, islands available for sale are mostly located off Sabah in East Malaysia, Thailand and the Philippines while in the Pacific, islands off New Zealand, Fiji and French Polynesia are popular and very reasonably priced. In recent years, they are very popular with buyers from Hong Kong, Japan and China.
But owning an island is not for everyone. It is crucial to determine whether or not parking your cash in this type of investment is for you. Keep in mind that there are many factors to consider before you can become an island owner.
STEPS TO OWNING AN ISLAND
Do your homework
There are several websites that provide listings of private islands for sale such as Private Islands Online, Private Island Inc and Vladi. Alternatively, you can look for real estate agents who handle these cases exclusively to ensure the best service and offer. It is crucial to select locations that are within your budget and not be overambitious. Searches on property sites for islands under USD50,000 will yield results such as Central America, the South Pacific and Nova Scotia while a search on Asian islands for sale consistently come up with islands priced at a million USD upwards (there are exceptions of course). Make sure you’re an expert on these countries by the time you’re done studying your prospects.
Start Window Shopping
The first step you take before deciding on an apartment to live in is to view as many potential units as possible; the same formula applies to island hunting. List down as many islands that fit your budget, then narrow it down to a handful that suits your need. Now you can start making tour arrangements so you get to assess the island’s landscape and existing infrastructures (if it’s already in place), as well as experience the weather and local climate. The key is to gain access to as many islands as possible.
Understand the Local Culture
Now that you’ve stepped foot onto the warm sandy beach, looking out at the stunningly blue water, it’s easy to be seduced into saying yes. If you are considering living on the island, take note of the nearest town and check out the social scene —you don’t want your social life to be limited to the island. And unless you have a taste for fried silk worm or grilled armadillo, get acquainted with their staple food and sample some of the local cuisines beforehand. If you plan to develop the area into a holiday resort, take some time to study the culture, religious sensitivity and what’s considered taboo by the locals. This is important in preventing your future employees and guests from offending the island dweller
Plan Your Investment
Once you’ve set your eyes on the paradise of your choice, determine the type of investment you want to get into. No one wants to own borrowed items—it should be the dream to own a freehold island, a practice that is more common in European countries and the Caribbean. But if you’ve been seduced by properties in Asia or the attractive price tag of islands in South Pacific, keep in mind that most of the islands are only sold leasehold. Purchasers will have to sign a long-term lease typically up to 99 years, which grants them temporary possession from the owner of the land.
Avoid locations that require you to switch to multiple means of transportation to get to the destination. Select a location that’s either in close proximity to the mainland or one that can easily be accessed via water or air. If it doesn’t already have some sort of transportation system, consider factoring the cost of setting one up into your investment allocation, such as chartering private barges, fishing boats or seaplanes for ease of accessibility. Being at close proximity with the mainland also ensures that the island dwellers can flee to safety in case of emergency or natural disaster.
Take into consideration the climate of that region. Are you able to withstand the dry and wet tropical rainforest, the scorching heat of the dry arid climate or the blistering cold of continental climate? Developing an island from the foundation up requires careful planning of the underlying framework such as water sanitation and hygiene, and the availability of supply networks that can support both hot and extreme cold weather. No matter how picturesque that rustic look might be, seaside conditions tend to be harsh on traditional building materials so pay extra attention to the materials of your choice.
Study the Ecosystem
Make sure you are well-versed in the construction laws and regulations of the island’s home country and conduct an environmental impact study before you start going on a building spree. There have been instances where certain development plans have been cancelled due to the geographical and environmental issues. Hollywood actor Nicholas Cage was forced to sell off his Leaf Cay Island in the Bahamas that he had acquired for USD3 mil along with his dream of building a luxury getaway because it was later discovered that the land was home to an endangered native reptile.