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One person’s challenge is another person’s adventure. And owning a private island may be the ultimate adventure, at least when it comes to trophy real estate.
“The individual who buys a private island is very often looking for a secluded place that offers great freedom and status,” says Benoit Bernard of French Polynesia Sotheby’s International Realty in Papeete, Tahiti. “The show is there facing you. It’s forged by nature for eternity.”
Acquiring an island is a passion project in which emotions can edge out bottom line considerations. The market is narrow and the outlay considerable. “In terms of pure investment, it is often very difficult to evaluate its profitability,” says Bernard, but a real estate professional will consider all costs and constraints to help prospective buyers “minimize the risks as much as possible.”
Uncertainty aside, the payoffs of being a sovereign of one’s own sanctuary are many: privacy, exclusivity and, sometimes, the chance to create a legacy.
According to Russell Post of Russell Post Sotheby’s International Realty in Key Largo, Florida, the opportunity to establish a family compound is “probably the most attractive part of owning an island. Buyers want their extended generations to come and visit, and they envision the buy as a legacy property to be passed down.”
Technology has made it easier to turn a sandy spit of land into a slice of paradise. “The development of renewable energies, satellite links, water treatment and rainwater recovery systems are new technologies that are simplifying island life and management,” says Bernard.
Nevertheless developing and maintaining a secondary property a sea away remains a complex undertaking. Wish lists meet reality checks. Even the most experienced property owners find themselves in unfamiliar territory. Questions that need to be asked by would-be island buyers touch upon issues that are not typically concerns in the traditional housing market: Are there major weather hazards to be aware of? How are the routes to bring in supplies? How close are medical facilities? Are there opportunities to generate revenue through rentals or commercial development? If purchasing an island in another country, how stable is the government?
Private islands are available all over the world, but inventory is limited. Post has a listing for a private island called Pumpkin Key priced at $95 million, just a 10-minute boat ride from the prestigious Ocean Reef Club in Key Largo, Florida. Post says it’s only the second private island he’s seen come to market in the Upper Florida Keys in a decade.
Pricing an island involves a challenging set of calculations since there are no true comparables. And despite scant supplies, it’s not unusual for an island to be on the market for years. It takes patience on both buyer’s and seller’s parts for a perfect match. Some countries have restrictions on international purchases or permit only lease options rather than outright buys. Leaseholds can run as long as 99 years.
While local laws and regulations apply, it’s the closest anyone can ever gets to feeling like the ruler of their own kingdom. Says Bernard: “The world is theirs to shape according to their desires without any constraint.”
Article provided by Iyna Bort Caruso exclusively for sothebysrealty.com