Private Islands are the fantasy of many a high-net worth individual, conjuring up images of glamour and exclusivity. But is a private island a realistic investment, or just another way to stash assets away? In an article for Forbes, Matt Pickering examines the realities of purchasing and owning an island.
In short: no. It’s expensive – really, very, very expensive. And it’s also a huge responsibility. You’ll need to ship in or fly in the materials necessary to make your island livable, including electricity, water and sewage, as well as organize a workforce and comply with a myriad of building codes and standards. In addition, maintenance costs for an island are usually higher than for a mainland property, due to the distance and harsh environment. The cost of maintaining a private island can easily exceed the actual purchase price, making it an unwise investment.
For the average person, buying a private island isn’t a viable option. Instead, most private islands are owned by cruise lines and leased out for day trips. They’re popular among cruise fans and can be found on the majority of Caribbean and Bahamas itineraries. And if you’ve ever been on a cruise ship that visits a private island, you know it can be a wonderful and relaxing experience.
All cruise line private islands have alfresco bars and souvenir shops, and they’re generally stocked with beach equipment rentals and lunch options, as well. Some of them offer activities like swimming with stingrays and kayaking, while others feature snorkeling or beach yoga classes.
And while some of these islands may not have docks, most of them do have tender boats that can ferry cruise passengers ashore. The process can take a bit of time, however, which can detract from the amount of time you have to enjoy the beaches and other amenities.
The main advantage of a private island is privacy and seclusion, but there are many other reasons why people might visit them. In a world filled with digital distractions, the relative isolation of an island can be soothing and even therapeutic. Then there are the other benefits:
The reality is, though, that for most people, a private island won’t have any financial returns. And if it’s not an investment, what is it? “As far as the value of an island goes, I’ve always looked at it as more of a lifestyle asset than a pure investment,” says Mr. Blue Island’s Mr. Morgan. “It’s something that brings you prestige and status, but doesn’t reliably accrue significant financial gains.” For example, he compares the return on an island to that of purchasing a yacht or jet – it’s more about the experiences than the dollar value.