Buying a Deserted Island? Here’s How to Not Get Stranded.
If you’ve spent even five minutes on our site, then you know we’re pretty big fans of international real estate as an investment. It’s tangible, stable, and even pretty predictable if you’ve been doing this as long as we have. And — as is often said — they aren’t making any more of it.
If that finite supply is part of what makes real estate a great investment opportunity, then it plays an even bigger role when it comes to island property. There are only so many in the world. It’s part of what adds to their allure.
Due to the limited number of listings for island properties for sale, their demand (and consequently their price tag) is often quite high. Not to mention, buying and owning island property comes with its own very unique set of challenges.
So before you go in all Robinson Crusoe and start making offers on your own personal deserted island, here are a few tips to keep you from getting marooned.
1. Be realistic.
You may have delusions of grandeur of living in solitude in your own tropical paradise. Or maybe you’ve come up with the perfect plan to buy a raw tropical diamond in the rough and turn it into the next Roatan, Honduras. Just know this. Neither living on or developing an island is for the faint of heart.
Before you hop a boat from the mainland, ask yourself a few questions. Will I be OK with being a bit cut off from civilization? What happens if there’s an emergency? Do I really want to pump my own water?
Potential investors or developers should do the same. Think about these questions. How much will I need to better this land in order to turn a profit? Have I factored in the cost of transporting tons, meaning literally thousands of pounds, of building supplies from the mainland?
Too many people buy island property without taking these and other factors into account. Once they realize they were disillusioned about what it would demand, many end up turning right around and selling it or, worse, getting stuck with undesirable property they can’t get rid of.
2. Consider the ease of access, or lack thereof.
By its definition, island property is surrounded by water. This fact opens up a whole can of worms that you might not have ever thought about before if you haven’t lived on an island.
Not only is there the issue of the island’s distance from the mainland. There’s also the physical hurdle of getting people and supplies out of a boat and onto dry land. That’s not always as easy as it sounds. There has to be a shoreline somewhere that’s conducive to loading and unloading.
This becomes even more crucial if you’re planning to build. It’s one thing to imagine bringing your furniture and groceries ashore on an island. Now imagine unloading stacks of lumber or a backhoe. In most cases, it is possible. But the time and costs associated with building on an island can be many times more than what the same would cost on the mainland.
3. Know your rights.
In most places in the Latin Tropics, foreigners have the same rights as citizens when it comes to buying and owning real estate. However, there are sometimes caveats. And island property is one of the most common types restricted by local laws.
For example, in some countries islands can only be purchased as Rights of Possession (ROP) property. That means they’re actually owned by the government. You have the right to use and develop it as you wish (with a few limitations). You just don’t hold the title and, as a result, don’t pay taxes.
If that scares you, it shouldn’t. It’s a very common practice, and it’s often the only way to be able to possess some of the most amazing properties in the tropics. It’s also not that different from owning land in the U.S. (If you don’t agree with that statement, then just ask yourself what would happen to the land you own if you stopped paying your property taxes.)
Another thing to be aware of is that many countries also recognize adverse possession, which is where a trespasser can actually acquire ownership of property merely by occupying it (read: squatting). So, before you buy a property that you think is vacant, you might want to check it carefully for any signs of vagabonds.
4. Do your due diligence.
For these and other reasons, it’s never more important to diligently research a title than when it comes to buying island property. Disputes over land can and do arise. And — if you take nothing else from the advice I’m giving here — know that if any questions are going to arise concerning the ownership of a property, you’re going to want to address those BEFORE you purchase it.
Resolving title issues is a manageable hurdle that can be surmounted. Ending up having to plead your case in a foreign court and facing the potential of losing everything you’ve invested is a NIGHTMARE that you never want to have to deal with.
5. Work with a trusted team.
Buying island property is not easy. But, while the risks it presents are ones that can be managed, that’s no easy feat for someone who doesn’t specialize in international real estate transactions.
That’s why my best advice is to work with a team of trusted professionals who can help guide you through the process. A local realtor can help you schedule property viewings, compare listings, and complete written offers. An attorney who’s well-versed in real estate can help with researching the title and walking you through the buying process.
It’s important to thoroughly vet any of these professionals before you hire them. Get recommendations from other expats and investors. Meet with several experts and interview them before you tell anyone they’ve got the job.
With the right help and an objective approach, buying an island can be a lucrative investment or a tropical dream come true. Just be careful. Failure to follow these tips could leave you feeling like a castaway.