Smart Buying
Temptation: Island
How to own or rent your own cays to paradise.
By Sean O'Neill
From Kiplinger's Personal Finance magazine, August 2006
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Tom Brisson strides through the cathedral quiet of a spruce grove and emerges into a sunlit clearing. On an outcrop of granite, ocean waves spray a halo of mist. The elegant port town of Bar Harbor, Maine, appears across the water. "The only thing missing from this view is a hammock hanging between two trees," he says.
Brisson owns 13-acre Heron Island -- a 20-minute boat ride from Winter Harbor, Maine. The 58-year-old financier had never seriously set his sights on buying an island until last summer. But a few weeks after retiring from his job as a Sallie Mae financial analyst, Brisson saw Heron Island pictured in a magazine article. The Potomac, Md., resident quickly visited the island and sized up its value. On the plus side, it's close to Maine's top attractions, and he plans to boost the value of his wooded fiefdom by building a three-bedroom house and a storage building. He lowballed the $795,000 sale price with a successful offer of $715,000.
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The own-your-own-island dream starts at about $150,000. But you can also rent a private island for rates that start at about $4,000 a week for two (learn more about renting).
Consider the 1.75-mile-long chain of five islands in Maine's Brans Mill pond. You could build a cabin on the largest of these islands (4.8 acres), from which you could fish for brook trout and white perch. The archipelago was recently selling for $229,000, which included a lot on the mainland for parking your car and launching your watercraft. The pond is an hour's drive from Bangor. (See a picture of this property and others in our slide show of private islands for sale.)
If you can afford waterfront property on the mainland, you can likely afford to purchase an island. As a rule, islands are about 20% cheaper per acre than waterfront mainland in the same locale. Yet islands offer more overall waterfront for your dollar -- with 360-degree views, of course.
What's more, the long-term investment value of an island often equals that of comparable waterfront property. The main reason is the diminishing supply of islands that can be developed. State governments and environmental groups are restricting construction of buildings on many undeveloped private islands, especially along the coasts of Florida and Maine. This trend is boosting demand for islands that don't have restrictions on renovating or replacing existing buildings.
Island mind-set
Before we tell you how to buy one, ask yourself whether you're cut out for island living. Real estate brokers say happy island owners share two key traits: a fondness for privacy and a drive to overcome challenges. Because islands are typically in resort and fishing areas, you'll need to gear down from your rapid urban or suburban pace to a rural rhythm of mañana. The most content island owners have a sense of humor about the time it may take to rent a boat, hire construction contractors or perform other tasks.
For Brisson, the strongest draw was the new challenge of island ownership. "I believe that drama and anxiety in small doses tend to keep me younger and more sharply focused," he says. But he is still learning patience. Building a pier and clearing the island of deadwood may be the only tasks he finishes in his first year of ownership. That's a typical pace, says James Trimble, of Trimble Realty, the brokerage that closed Brisson's deal.
See our buyer's checklist for five things you should know about island ownership before indulging.