Your own private paradise, by Gary Strauss, USA TODAY, Friday, August 13, 1999
Some Americans these days play Robinson Crusoe in reverse – they’re willing to give everything to get their own island, not leave it. Interest in private islands is peaking, stoked by a brokerage’s TV ad in which a truck driver parlays a fast fortune into a tropical getaway. While island ownership is celebrity chic, with famous mainland escapees including Diana Ross and model Claudia Schiffer and some places fetching $10 million, the price for your own private paradise could dip into the $20,000 range. “I love it,” one bargain hunter, Tina Scheldrup, says of her island in a Canadian lake.
Your own private paradise
Wall Street and Madison Avenue made “Al” the tow-truck driver an unlikely but proud owner of a private tropical island- at least on the TV commercial for Discover Brokerage.
The popular, Emmy-nominated advertisement ended a six-month run in April after generating plenty of interest for the online brokerage- and the attention of Securities and Exchange Commission Chairman Arthur Levitt, who suggested the spot may have created unrealistic expectations of huge profits from online investing. Yet the tongue-in-cheek ad also appears to be energizing interest in private-island ownership, according to several real estate agents who specialize in island sales.
A tenuous correlation? Perhaps. Al’s island isn’t even real. It’s computer generated. Still, interest in islands – both developed and in purer Robinson Crusoe form – is at its highest level. Beforethe ad’s debut in September, it appeared to be waning, agents say.
Cellular telephones, satellites, the Internet and pre-fabricated homes have made even remote islands palatable. Solar and wind-poweredutility equipment and advances in water purification systems alsohave made extended island stays easier and more comfortable.
But the boom is more tech-stock than technology driven. “Clearly,a big influence on sales is how the stock market is doing,”says Farhad Vladi, the world’s largest private-island broker.Vladi has sold 650 islands since 1971. He may sell 35 islands this year. Despite Wall Street’s summer swoon, private-island real estate values are rising sharply.
“Islands that were selling for $900,000 to $1 million 12to 18 months ago are now being sold for $2 to $3 million,”Vladi says. Of about 125 private islands on the global market,Vladi Private Islands holds listings on about 100, ranging from a tiny Nova Scotia spot priced at $6,500 to the $13.5 million Norman Island in the British Virgin Islands. Legend has it that Norman was the inspiration for Robert Louis Stevenson’s TreasureIsland.
Besides their appeal to nouveau riche market tycoons, Vladi’s clientele has included actor Tony Curtis, singer Diana Ross and super model Claudia Schiffer. Clearly, there’s a certain snob appeal. “I see clients with pictures in their wallets of their islands, like pictures of daughters,”Vladi says.
But you don’t have to be rich to own an island. In 1994, sisters Niki and Tina Scheldrup bought small islands on Canada’s RainyLake, near International Falls, Minn. Their family had long-owned 50-acre Home Island. Niki, a National Park Service dispatcher,bought 15 acres on Turkey Island for $18,500 at a tax forfeiture sale. “Private islands aren’t just a rich man’s fantasy,”she says.
Younger sister Tina, an equestrian instructor from Leesburg, Va.,spent $22,000 for her Rainy Lake island and is putting the finishing touches on a 1,200-square-foot, $60,000 summer cabin. “I saw the Discovery ad, and I could relate,” she says with a laugh.
How does it feel to own a status symbol? “I love it,” she says. “Doesn’t it sound neat to say I own my own island?”
Location, Location
Other hot island markets are off Scotland and Ireland, some peppered with ancient castles. “A few years ago, there were 10 to 15 Scottish islands for sale,” Vladi says. “Now, you can’t find a decent one, mainly because of the prosperity in the London stock market.” Still, markets near Australia and New Zealand have been crimped by the long slide in Japanese stocks and, more recently, the Asian financial crisis. That’s also created some bargains. New Zealandhas permitted foreign ownership only since 1996, so prices are relatively inexpensive. Vladi recently purchased a 2,000-acre island off southern New Zealand. Political and economic instability in South America and Central America has crimped demand and prices to as little as one-third that of comparable Caribbean islands, Vladi says.
Lagging U.S. market
Surprisingly, some showcase U.S. properties long on the market continue to languish, in part because of their location and perhaps because they were overpriced.
Galloo Island, which was on the market earlier this year for $9million and as recently as 1996 for $10.8 million, will be sold to the highest bidder Aug. 26. One of the biggest privately held islands in North America, 4 1/2 -mile-wide Galloo, on Lake Ontario near Watertown, N.Y., features a four-bedroom farmhouse, hunting lodge, equestrian facilities, two boats, a prop-engine plane and an airstrip that can handle corporate jets. A Swiss consortium, which used the island as a family vacation spot, is the current owner.
“This is a world-class piece of property, but we’ve had maybe 100 inquiries,” says William Bones, president of National Auction Group, the Gadsen, Ala., real estate auctioneer that opened Galloo to prospective buyers Thursday. “That’s way below what we expected. I’m surprised we haven’t attracted more New York City types.”
Island fixer-upper
Most island real estate agents recommend prospective buyers do some extended due diligence before plunking down money for an island, especially if they’ve just begun thinking about it afterseeing the Discover ad.
“A private island is a romantic ideal, but once people realizehow difficult it is to build on one and maintain it, only a handful are serious buyers,” says Mike Lightbourn of Coldwell Banker/LightbournRealty in Nassau.
“Most people don’t have a clue about what they’re getting into. If you’re starting from scratch, you’ve got a long way to go to paradise.”
