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Twenty years ago passing yachtsmen were often invited to land on a private island in the Bahamas. The owners had made money in concrete in Michigan, and spent some of the proceeds on the sand-fringed idyll.

The island home had two balconies, one facing east for the morning sun and one facing west for sunset. The couple snorkelled daily on their reef.

In the afternoons, the trade winds took the heat out of the day. A wind generator hummed in the breeze. The illusion of utopia was complete – until you stumbled over one of the many 12-volt car batteries in the living room. The electricity had to be stored somewhere.

“Owning an island is a fantasy. It sounds so exotic, and part of the appeal is that you can leave everything behind,” says Joan Tapper, who for years edited Islands magazine. “But there’s a big gap between fantasy and reality, and only sometimes can you can bridge it.”

However large the gap, it has not slowed demand for private islands. And whether it is seclusion, the beauty of nature or simply a break from the rigours of making money that lures people to buy one, owning an island has cachet beyond any perceived investment value.

Marlon Brando bought the French Polynesian atoll of Tetiaroa while filming Mutiny on the Bounty. At 37, the reclusive hedge fund manager Louis Bacon purchased the 445-acre Robins Island in Long Island’s Great Peconic Bay, then committed several million dollars to protect its environmental heritage. In some circles, Sir Richard Branson’s Caribbean island Necker is as famous as his airline.

Outside headline-grabbing sales, however, there are still plenty of opportunities to buy. The market is robust, particularly for tropical locations near the continental US, says Farhad Vladi, a Hamburg-based island broker who has sold more than 2,200 islands in his 30-year career. Vladi rarely discloses clients’ names, but admits to having done the estate appraisal of Skorpios, Aristotle Onassis’s Greek isle.

Vladi identifies several factors driving demand, including wealthy investors buying islands to build luxury boutique resorts. Inevitably, this has raised prices for people seeking truly private redoubts. The US stock market has also buoyed valuations, particularly in the Bahamas. Speculators have joined the bidding, with islands in Panama, Honduras and Mexico benefiting.

“In areas like Panama, a lot of islands have been bought but nothing has been done with them,” says Vladi, noting that one undeveloped island recently sold for $2.2m just three years after changing hands for about $300,000. However, he warns that a big fall in the US stock market could halve prices in these locations.

Other factors that have expanded the pool of potentially habitable islands include advances in cellular telephony, solar power and desalination. New wealth has also played a part.

“The island business is thriving because a lot of people now have access to planes, helicopters and large seaplanes, and communications improvements have made it a lot easier,” says George Damianos of Nassau-based Damianos Sotheby’s International Realty.

Still, buying an island requires more due diligence than traditional property investments. Vladi gives clients a comprehensive checklist.

“The availability of medical services is non-negotiable. You have to make sure you are no more than 90 minutes from a doctor,” says Vladi, adding that this factor alone has suppressed some Indian Ocean prices.

Securing proper ownership status is also essential. Vladi stresses that buyers should be freehold owners rather than lessors.

Next is the “legal/political package”. Can you, for example, ensure that shifting political winds will not affect ownership rights?

Nor are political hazards limited to tropical locales. Some privately held Lake Ontario islands once appeared in the crosshairs of a liberal-minded New York senator who thought they might be better used by the public. Fortunately for the owners, the politician died before the exercise of eminent domain.

Long closing periods can also be expected. Thanks to some enterprising members of the Medellin drug cartel, who turned one Bahamian island into a logistics hub, it can now take several months to buy or sell an island in that country. “You have to be checked out and you have to disclose your intentions about what you will do with the island,” Damianos says.

Having addressed these issues with a suitably qualified local lawyer – someone who knows that environmental legislation may prevent seaplane landings, for example – there are practical points to consider.

Accessibility is paramount, and “access by boat is especially important, so you want a deep water route to your island and a good anchorage, because supply boats need to deliver groceries and furniture”, Damianos says.

Construction costs run much higher than for equivalent mainland properties, with $2,000 a square metre as a guide. Infrastructure, too, can be expensive, particularly if there is no reliable source of fresh water.

The threat of global warming means long-term buyers should look for islands with some elevation, which rules out many Pacific atolls.

Local fauna should be taken into account. Some people find iguanas unnerving, but even sand flies and mosquitoes can discomfit the steeliest of beachcombers.

Indeed, Damianos’s experience suggests island life is not for everyone: “If you see someone from Connecticut and he’s wearing khakis and his wife is dripping in jewels, it’s more than likely an island won’t work for them.”

Of course, not everyone is in the market for the $8m-$20m Bahamian islands Damianos is currently selling. There are plenty of opportunities to buy island properties elsewhere, often at lower prices and usually in more temperate, less hurricane-prone climates.

Islands off the Connecticut shoreline hold their value. Similarly, prices for islands off France, Ireland, Scandinavia and the UK tend to reflect local demand rather than an external stock market’s exuberance. Canadian islands are usually well-priced because of a large supply of both littoral and lake locations, with islands of several acres available for $300,000.

Often these are divided among a few owners, and in the most desirable locations buyers may have no other choice. In Washington state’s San Juan Islands, for example, says John Dunning, a property broker, “no island will sell for less than $3m if it is solely owned”.

Some may find sharing an island as good as owning one. Dunning is selling one such property on the San Juans’ Blakeley Island for $25m. Once the home of the late potato baron Peter Taggares, the peninsular property has everything you might want in a private island: it has 30 acres of land and spectacular views towards snow-capped Mt Baker, and abuts an airstrip accommodating private jets.

For some though, nothing less than a whole island will do. “It’s an independent kingdom where I do what I want, and there’s a wonderful feeling of isolation with no one to interfere,” says Johnny Andrews, whose family has owned Braddock island in Northern Ireland’s Strang­ford Lough since 1907.

For those less versed in the joys of island ownership, Vladi suggests renting: “You can’t test a marriage for three months, but you can try living on an island.”

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