In times of economic turmoil, sales of high-end goods always plummet the first and take the hardest hit. It’s the discretionary luxuries- designer clothing, flashy cars, holiday villas- that inevitably wind up on the chopping block when the markets take a nosedive and even the most bullish investors are holding their breath. Yet arguably the most extravagant luxury that money can buy, privately-owned islands are seeing a surge in interest right in the midst of one of the biggest economic crisis of the last decades. Found anywhere from the snowy Great Lakes to exotic Fiji and Panama, these unique properties offer investment possibilities unlike any other kind of real estate… and now also at unheard-of prices.

 The CEO of leading islands firm Private Islands Inc, Chris Krolow, says that while his company has seen a huge number of price reductions in the Fall of 2008, in his experience it’s been a result of sellers needing a quick sale to make up for other losses, as opposed to an actual drop in the island’s value. “In my ten years in this business, I haven’t seen a better time for buyers to get some amazing deals on very desirable properties,” he says. “We’re seeing substantial cuts in prices- sometimes by half or more- by motivated sellers who’ve had their portfolios hit by the credit crisis. We’ve even added a section on our listing website, Private Islands Online, just for new price reductions.” And he says that since the private island market has such a strong history of appreciating faster than any other kind of real estate, those who make savvy purchases now may be in an excellent position to sell when the markets rebound.

So what should investors look for when adding a private island to their portfolio? When it comes to tropical islands, the best prospects for major future leaps in value are always in areas with high rates of tourism and a substantial infrastructure. A safe environment and the availability of amenities like hospitals, airports and shopping are important, as is a relative proximity to the Unites States, where the majority of island buyers reside. With the strongest tourism sector in Latin America and the fastest growing economy in the world, islands in Panama have become highly desirable for the construction of resorts and residential developments, ranging in price from several million down to just US $30K. Pricier but still always in high demand are properties in the Bahamas, where the market is fuelled by high tourism and the celebrity cache of local island owners like Johnny Depp, Nicholas Cage and Faith Hill. Closer to home, good buys can be found in areas like Maine and Canada’s Nova Scotia, where seasonal holiday properties are achieving a strong following among urbanites from East Coast cities like New York, Washington and Boston.

But the opportunities of this elite market have remained a secret to many investors. During the last months, Krolow says a main focus for his company has been simply spreading the word that his niche of luxury real estate even exists, and promoting the benefits of island purchase to both professional investors and the average client looking for a smart buy on a vacation property. He says that Private Islands Inc. has just started a variety of new projects, ranging from his new Private Islands Magazine to a unique series of commercials, to partnerships with other real estate firms in growth markets like Panama and the Bahamas.  “We’re actually very fortunate,” he says, “because unlike most sectors of real estate where there’ve been an excessive boom in construction over the last five years, ours is truly a finite market of maybe 800 properties up for grabs each year. When it comes to natural private islands, they just aren’t making any more of them.”

Click here for Part One

The process of transforming a pristine, untouched island into a hospitable place for vacation homes, resorts or even permanent residences can be an intimidating task, but as the first instalment of The Basics of Private Island Development has shown, there are a variety of resources available to help ease the process. Your local agent is an invaluable source of contacts and information, and from obtaining permits and utilities to clearing, filling, and landscaping an island, all aspects are simplified by learning as much as possible about the challenges of island development, researching portable, “green” technologies, and cultivating helpful relationships with your new neighbours. Some investors may wish to stop at the partial stage of development, which adds a significant premium to islands for resale, but much work remains for those seeking additional profits or who intend to use the island personally. This article will cover constructing residences, docks, and the growing trend of private island airstrips and helipads, and the environmental and financial considerations associated with these developments. Read more »

Many private islands come complete with fully-functioning dwellings, utilities and docks, ready for immediate use by their lucky new owners. However, particularly in remote regions, the majority of islands on the market are in a pristine, natural state. While undeveloped islands are usually less expensive, and this clean slate also affords often-individualistic owners the chance to give the island their own unique mark, development is a time-intensive and potentially expensive project. Each region and property will pose distinctive challenges, however a wealth of information is available to help ease the process of making your little island paradise liveable. This instalment of a two-part series covers planning permission, cleaning and filling, pest control and utilities. Read more »

Natural beauty, fragile ecosystems, and often wild and untouched surroundings: there are many reasons that private islands may come with restrictions on development that exceed those of mainland property. However, many modern eco-friendly technologies and a sensitive understanding of environmental concerns will allow for island development that adds to not only your enjoyment of the property, but will preserve your island’s character and appeal for generations to come.  Read more »

By Liam Gladstone  10/02/2007 

Set against the clear blue waters of the Caribbean Sea, the 2000 acres of Grenada’s Ronde Island leave a powerful first impression. “It’s the ultimate paradise,” describes the island’s exclusive agent, Trevor David, ” and a blank canvas waiting for the right artist.” The striking cliffs, pristine tropical forests and rolling green hills evoke a younger earth, and in fact, that this highly desirable island is untouched by development comes as a surprise to many international real estate specialists. Chris Krolow, CEO of Private Islands Inc., is among them. “With billions of dollars being pumped into resort projects in the surrounding areas, it’s amazing that the property has remained undeveloped,” he says. “This is the largest private island available in the entire Caribbean- just imagine the possibilities.” Read more »