Wednesday, 29 August 2018
If you're dreaming of island living, you're not alone.
According to Sotheby's International Realty, online searches for "private island homes" increases at a whopping rate of 225% year after year. Searches for The Bahamas and the Dominican Republic more than doubled in the past year. While Anguilla, St. Lucia, and Mauritius also got bumps in searches.
Colby Sambrotto, CEO of USRealty.com, is a real estate expert and also owns a home on New York's Fire Island. For Sambrotto, island living is a positive experience overall.
"I was pleasantly surprised that my family had access to more oceanfront than we'd assumed," he said. "When you are a property owner, you can get in on the resident rates for municipal beaches and marinas. We can find something to do on the water all summer long, even though our house is not directly on the beach."
While islands around the world obviously differ in climate and popularity, Sambrotto said a few of the advantages of island living include:
"There's only so much land," he said. Which means the housing inventory is limited and therefore prices remain fairly stable.
"Most islands are relatively undeveloped, with the exception of working ports and fishing-related businesses," he said.
"Once you're there, you're there. Getting there is inconvenient. So is returning to the mainland. If you plan ahead, that's great."
But before you make a down payment on the perfect island beachfront bungalow, understand there are also disadvantages, including:
"Buying will take longer because there are relatively fewer properties and it will be harder to get a working market value, with few comparables," he said. "Selling will take longer because island life is appropriate and appealing for some — but not all — buyers. It takes longer to find the right buyer."
"That's charming in warm, calm weather," he said, "but inconvenient in winter and in bad weather." Lack of emergency health care. "Getting helicoptered out is expensive," Sambrotto said.
"Islands usually have thin year-round populations. There may not be enough people to deliver efficiencies of scale for utilities, especially broadband," he said.
"The stores, restaurants, and roads will be crowded. That might affect your R&R," he said.
Depending on the island, you might be required to take most of what you need — like food, medicine, and toiletries — with you. This includes enough supplies for an extended period on the island if there are weather or transportation issues.
Additional taxes, insurance, or home upkeep/repair costs could add significantly to the cost of owning an island home.
Sambrotto recommends potential buyers do extra homework on island property values. For example, if you're interested in island properties in Maine, he suggested looking at the Island Institute, a nonprofit organization that regularly analyzes the property values on islands compared to the rest of the state. Its 2015 indicators report found island properties gained one percent in valuation between 2009 and 2014, compared to a three percent drop for the rest of the state. Take some time to find similar data on the island you're interested in.
He also said if you're banking on renting your property when you're not living in it, check out short-term rental sites such as HomeAway or Airbnb for current rates and seasonal travel information. "This helps you see what the perceived 'value add' is to this island in particular, and that provides clues as to the island's popularity and culture."
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