Hot Private Island Markets: Invest Like a Celebrity
by Veronica Dias
From the star-studded Bahamas to emerging markets in Central America, private islands are a unique- and increasingly profitable- real estate investment.
Attracted by the celebrity caché and skyrocketing price tags, a growing number of savvy real estate investors are turning an eye to private island purchase. From established enclaves like the Bahamas to rising Central American stars like Belize, privacy-conscious individuals, development firms and even cruise lines are driving this exclusive luxury market.
With a global network of brokers and more than 500 private islands available for sale, Canadian company Private Islands Inc. is the premier marketplace for these niche properties. Having the world’s largest selection of islands has given founder and CEO Chris Krolow a unique overview of global trends. “Find the right market, and private islands can appreciate faster than any other kind of real estate”, said Krolow. With increasing uncertainty in conventional American real estate markets, he suggests that many investors are looking offshore for their next big purchase. “And it may come as a surprise,” he says, “but some of the best regions are found within hours of the US mainland.”
Located just a 40-minute flight from Miami, the Bahamas is considered the most well-established island market. Home to the secluded retreats of many Hollywood stars, these sun-swept private islands are increasingly being snapped up by resort developers and cruise lines. “Many private islands have appreciated tremendously over the last few years,” said prominent Nassau broker Kevin Cross. “One island in the Exumas was purchased two years ago for US $3M. It’s back on the market now at US $7M. It’s a property boom that I think will only continue.” And 2007 has seen several unusually large Bahamas islands enter the marketplace. “Charles Island and No Name Cay are spectacular investment properties,” says Krolow. “Just a few hours from New York or Miami, they’re ideal for tourist development.” With many smaller islands more suitable for individual use also listed on Private Islands Online, the Bahamas appears to offer something for every kind of buyer.
A still-establishing market, Belize is seen by many as a younger, less expensive alternative to the Bahamas. Also showing a steady increase in island price tags, the country is becoming a top choice for tourist development. As Director of Operations of Private Islands Inc., Alexis Pappas has seen a steady trend towards investment purchases of these islands. “Our company is contacted several times a week by both large and small development groups interested in pursuing opportunities in Belize,” says Pappas. “And inspired by stars like Leonardo DiCaprio, the country is also at the forefront of one of the hottest trends in the island industry- ecologically friendly resorts.” She speculates that new technologies may play a part in this movement. “With the constant evolution in green power and small-footprint modular housing,” Pappas explains, “luxury and environmentalism can now co-exist. Creating a spectacular resort on an island like DiCaprio’s Blackadore Cay is easier than ever. ”
Getting in on ground floor of a fashionable region is a good start to island investment, said Krolow, but the right kind of development can also add considerable value. “While there are certainly those who love a project, many island purchasers simply do not have the time for paperwork and contractors,” he said. “For some of my clients, even an airstrip is non-negotiable.” Krolow suggests that preparing an undeveloped island for use with essentials like water and electricity can be a huge asset when it comes time to resell. “When people want to make their mark on a property, it will be in the unique buildings and landscaping,” he says. “Virtually every potential buyer would prefer the head start of having basic utilities, so they can jump right in to the fun part of creating their dream island.”
Krolow’s advice for newcomers to island investment is simple- “Research, research, and more research,” he said. “Private Islands Inc. is about educated decisions, and with our website sections offering articles, advice and ideas for development, we make a concerted effort to ensure interested buyers have all of the information they need.” And another good rule of thumb? “Watch where the top celebrities are purchasing islands. Property values will rise accordingly.”
