How to Evaluate the Real Value of a Private Island 

How to Evaluate the Real Value of a Private Island 

The private islands market has been at its prime in recent years. Due to the reports we already mentioned in our blog article, since the start of the pandemic in 2020, the interest of buyers in private islands has only grown due to multiple factors. Some of them refer to the benefits of owning a private island while others refer to the whole interest in privacy, long-term investments, and sustainability which are greatly implemented in such a property as a private island. 

Yet, if you are cherishing thoughts about buying an island, it is especially essential to understand what the pricing of islands for sale consists of. Which features impact costs and how to understand the seller doesn’t trick you. Let’s talk about it. 

The Benefits and Drawbacks of Owing a Private Island

Firstly, why is owning an island is a great idea? The reasons are diverse enough, we can say.

  • Private islands are great tourist destinations, and it is up to their owners to develop their tourist infrastructure and create a real haven for tourists and get top money from it.
  • Private islands are a great idea for residents if you are likely to be a closed person and love privacy and security.
  • Lots of private islands are attributes of the high status of their owners. Probably, you often face news about some celebs, socialites, or men of power buying or selling islands or having incredible feasts and parties on their private islands. That’s what we talk about.
Read about Johny Depp`s private island

Yet, there are also some drawbacks you need to know in advance. First and foremost, most costs refer not to the buying process but to the maintenance of a private island. Besides, most islands are dependent on the mainland when it comes to basic utilities, supplies, and transportation. 

So, why do some private islands cost over $1 million and others will set you back $200,000 or even less? Let’s detalize the price formation for the private islands market.

Evaluating Costs: What Impacts the Price of a Private Island for Sale

The price of any private island offered for sale depends on the whim of its owner. Of course, being a private island owner provides a person with an opportunity to set any price they want for their property. But the market is not regulated and the competition exists. Thus, most private island owners prefer to form the price according to some objective factors. Let’s name the most significant among them.

Location and Legislation

There are tons of islands around the world, and they are located in various areas and climate zones. What do you think will cost more: an island in a secluded area somewhere near the Antarctic zone or a tropical island in the Caribs? The answer is obvious. 

Besides, the price can depend on the legislation and jurisdiction of an island. The US and European island owners provide higher pricing for their properties compared to the Pacific island economies or islands in Southeast Asia. 

Thus, when you decide on the purchase, you need to evaluate where the island is located, and which country it belongs to, and then consider whether its pricing is fair and reasonable. 

Beach on private island

Accessibility and Transport

The next factor derives from the previous one. You need to get to your island, and it is preferable to do this with ease. Thus, islands which are closer to the mainland and are located in the area or regular transportation may cost more than secluded ones where you can get only by private boat, yacht, ferry, or charter flights. 

Besides, it is required to evaluate which transportation options and the infrastructure for their maintenance are developed on the island. Is there a pier or a marina for access by boat? Does an island have a kind of helipad? Probably, there are regular routes to get closer to your property using public transportation options. All that impacts costs greatly. The more secluded and hard-to-reach an island is, the higher chances are to get some price reductions for it.

Climate and Nature

Most people consider a private island to be a place to escape from civilization. If it offers a truly paradise-looking climate and nature, it is bingo. And it is also an additional cost. Islands with tropical and Mediterranean climate types are the most comfortable for living and islands with cold climates or harsh seasonality with long monsoon seasons are not a perfect match. The same refers to nature. Islands with great nature sites and untouched riches of nature are more interesting for investors than bare rocks or islands where nature was destroyed. 

private island

Previous Background and History

This seems to be not as crucial as previous factors for a buyer, yet, you shouldn’t discard this feature too. Just imagine that you buy an island where some historical events happened, or some unique finds were made. You can use this history to earn money on it in future if you decide to make your island a private spot. Thus, you shouldn’t be surprised that an intriguing history adds value to the island. And vice versa, islands which were associated with some terrific events, i.e., numerous prison islands, can get price reductions. 

Infrastructure of the Island

Generally, each island is just a piece of land surrounded by water. What makes it suitable for living is its infrastructure. You need roads and trails to navigate your island, you need a marina to moor your yacht, and you need accommodations to stay there. Thus, the higher the level of the infrastructure development of the island, the higher will it cost you. 

Supplies and Utilities

As we have mentioned, each island still depends on the mainland. Thus, the independence of the property is costly. If the island has well-developed utility lines, it has alternative energy and water supplies, and it has a reliable connection with the mainland to get necessary supplies, it’s good for a future owner, and it adds top dollar to the total cost. 


Making Summaries: Some Tips to Evaluate the Real Value of a Private Island

It is highly recommended to evaluate the costs of the island you desire to purchase in advance. It may also be great to visit your future property yourself and inspect it with some specialists, i.e., utility engineers, electricians, construction engineers and architects, or at least with a real estate specialist you can rely on. Getting an independent expert may save you money and provide you with a clear vision of is the deal profitable for you. At the very start of your way to buy a private island, you can also get the tips we listed in this article to understand which offers are worth your attention and which island owners are trying to trick you. 

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