Summer vacationers often dream of buying their own waterfront property. Why not an entire island?
If you can afford waterfront property on the mainland, you can afford to buy an island. As a rule, islands are about 20 percent cheaper per acre than waterfront mainland in the same locale. What's more, the long-term investment value of an island often equals that of comparable waterfront property.
The main reason is the diminishing supply of islands that can be developed. State governments and environmental groups are restricting construction of buildings on many undeveloped private islands, especially along the coasts of Florida and Maine. This trend is boosting demand for islands that don't have restrictions on renovating or replacing existing buildings.
Roughly 50 islands in U.S. waters are currently for sale. The most comprehensive listings online are at PrivateIslandsOnline.com. If you are interested in a particular region, contact a broker who has a long record of listing properties there. Such brokers often do not advertise listings on the Internet to protect the privacy of the owners.
Freshwater islands, especially ones in lakes in upper-Midwestern states, including Minnesota and Wisconsin, are usually the most affordable. Several convenient islands that are 10 acres or less recently sold for between $150,000 and $900,000. Saltwater islands off northern states, such as Maine and Washington, generally cost more; islands that are 10 acres or less recently listed at $230,000 to $3.5 million.
Temperate and tropical islands have their pluses and minuses. Those in the northern U.S. often sit on bedrock and are sufficiently high and sheltered to be protected from surging tides — unlike tropical islands, which usually sit low on mangrove or coral reefs and are prone to flooding. Then again, tropical islands — with their palm trees, conch shells and white-sand beaches — are the stuff of our island dreams. The starting price for a tropical island off Florida's coastline is $3 million.
If your tastes are a bit more exotic, you'll be pleased to know that about 3,000 islands are for sale in foreign waters. Lately, the hottest markets overseas have been Belize, Panama and Costa Rica — where prices have risen up to 20 percent a year for the past few years.
But foreign ownership has its perils and pains. In Belize, financing an island may mean paying a 15 percent interest rate and putting 30 percent down. Title insurance is practically unheard of. Most challenging of all, the permit process for making any change to the island — such as dredging, burning materials or building a house — can take months and cost hundreds of dollars.
So owning an island sounds idyllic. But before you yield to temptation and buy an island retreat, get answers to these crucial questions.
Is it too isolated? The price and convenience of island life is affected by its proximity to a mainland marina with groceries, parking and medical care. So unless you plan on living like Robinson Crusoe, an island's location should be your first shopping criterion.
Can you relax? Island shoppers often fail to ask two key questions, says Farhad Vladi, a broker who has sold about 2,000 islands since 1971: What's the local crime rate? And what's the mosquito and bug situation?
Does it have four-season appeal? Your island should be pretty and accessible year-round. Visit at low tide to make sure it's not surrounded by mud flats. Islands with coves that are naturally protected from surging water are ideal.
Are there permit problems? Ask the authorities what you can build on the island, if anything. "Islands without building permits are literally worthless," says Vladi. Once you own the island, you may need permits for simple activities, such as lighting outdoor fires. Fees will range from $10 to $100 a permit.
Will building bust your budget? Offshore building generally costs twice what it does on the mainland. One reason: Renting a barge to move heavy items can run $20,000 to $100,000 a month. Also, materials must be more durable and are therefore more expensive. Installing a septic system and a power generator may add up to $100,000.
If all this sounds like too much trouble for a family reunion or romantic getaway, maybe you'd rather rent than buy. Island rentals start at about $4,000 per week for two, and there are about 30 island rentals located within a day's flying time of major U.S. cities.
Mike and Robin Bommer of Avon, Ohio, stayed for two weeks this past spring on Channel Cay, a 25-acre private island in the Abaco islands, Bahamas, in a three-bedroom, three-bath house. Channel Cay is about a half-hour boat ride from Marsh Harbour, the nearest major town. Their idyll cost $4,300 per week (see details at www.channelcay.com), with airfare from Ohio about $550 per person.
Like many island rentals, a boat was not included. Boat-rental rates vary by season, marina and boat size. During their stay, the Bommers rented a 26-foot bareboat (a craft without a crew) for about $1,700 a week, including fuel and taxes.
You'll find listings for island rentals at PrivateIslandsOnline.com. Island owners usually require a deposit of up to 50 percent to hold your reservation. If you cancel, you may lose your deposit. Note, too, that many island rentals, including Channel Cay, do not come with hotel amenities such as daily housecleaning and room service.