Paradise Found
How to buy your very own island
Financial Post Business Magazine, February 2006

David Holt was cruising in his boat along B.C.'s Sunshine Coast in 1991 when he noticed a small sign tacked to a tree. West Trail Island, a 16-acre chunk of land just off the shore near Sechelt, was for sale. Holt, a West Vancouver tax adviser and recreational sailor, had long dreamt of having his own private waterfront retreat, and when he saw the island's secluded beaches, rocky outcrops, and forest of arbutus and cedar trees, he fell in love with the place.

When Holt discovered it, the island was jointly owned by two disputing couples, and the property had a hefty tax bill. He spent a year talking to accountants and realtors and nervously negotiating with the couples before he finally found the solution. Holt is reluctant to give too many details, but he will say this: He applied for a special dispensation that wiped out the tax bill, and he purchased the island for just $500,000 - well below its market value. "I felt wonderful," recalls Holt. "Not only did I get a deal, I got an island!"

If those four words - "I got an island" - kindle your own fantasies about owning a piece of oceanfront property, whether in Canadian waters or some place more tropical, Holt's tale yields plenty of good advice on how to make it happen.

In order to pay for the property, Holt sold his house in West Vancouver for $600,000 and transferred the mortgage over. He needed to be in the city for work, so he rented a place in West Van and spent his weekends on the island - a practice he maintains to this day. The journey takes two hours by car and ferry, followed by 15 minutes in his motorboat. Some of his buddies were skeptical when he sold his house, but his closest friends knew he loved spending all his spare time out of town and told him not to pass up the opportunity.

Holt's hard work wasn't over once he took possession of the island. "The house was totally neglected," he says. "Someone was staying there who was supposed to be a caretaker, but they didn't take care. It was overrun with mice. There were oil drums scattered around and lots of garbage."

He secured a line of credit of around $200,000 to pay for the renovations. Then Holt brought in a barge of building supplies and cleared an acre and a half of land to make a meadow. Over the next few years, he built an addition on the house, put in a dock and transformed the workshop into a guest house. Holt was spared some extra expenses because West Trail was already equipped with drinking water, a sewage treatment plant and a generator: Purchasing a new desalination plant to turn sea water into potable water costs between $20,000 and $50,000, while diesel generators start at about $6,000. And because Holt regularly visits the island, he didn't have to hire a live-in caretaker or pay a local fisherman to keep an eye on things.

David Holt says you don't need to be rich to buy a private island - but if you're not, you'd better have the skills of a handyman. Boats and moorings need annual maintenance. If you want to get lumber, you can't just phone up and have it delivered. "There's an extra layer of work involved, and everything takes longer," he says. "You need to be self-sufficient. If you're not able to do things yourself, you're pouring money out for everything."

There's still a lot of work to do on West Trail, but when Holt visits the island, he also takes some time to relax. He reads in front of the fireplace and cooks meals in the gourmet French country kitchen. On the deck, he watches sea otters, seals and sea lions swim by. From the large windows in the master bedroom, Holt has a view of Texada and Merry Islands. He also goes for walks down the island's trails, keeping an eye out for wild roses and the family of eagles that live there. "It's very peaceful and quiet," he says. "When I've been there for a couple of days, I feel like I've been away for a week. It's nice be able to forget about all the things I have to do in the city."

There's another major perk to owning West Trail Island: Its value has increased significantly since Holt bought the place. According to Doug Wark, a realtor who specializes in selling private islands in B.C., the market has never been hotter: Americans have realized Canada's islands are a bargain, and supply is dwindling as the federal government buys them up to transform them into marine parks. Holt's island is currently for sale, listed at a cool $2.7 million. "I have owned about 10 houses in Vancouver over a 25-year period," says Holt, "but without a doubt, this has been the best real estate investment I have ever made."

Holt will be sad to see his island go, but he wants to focus his attention on other aspirations: He's musing about buying a new sailboat and heading to the Caribbean. Or maybe he'll go for another trip along the Sunshine Coast and explore the islands, bays and secluded coves in search of another waterfront property to make his own.

How to buy an island:

Where to Look: Specialty websites like bcprivateislands.com and privateislandsonline.com.

The Rules: Many countries limit foreign ownership of islands. The U.S. Virgin Islands charges high taxes to foreign buyers. Tahiti requires a significant investment in the local economy, and most Asian countries limit foreign ownership to under 50%. In Mexico, the Cook Islands and Fiji, you can only lease islands. Canada has no restrictions on ownership.

Prices: One of the cheapest properties on the market right now is Clamshell Island, a small, undeveloped chunk of trees and rock near B.C.'s Salt Spring Island. At $195,000, it's about the same price as a condo in Vancouver. If money is no object, you can spend EUR33 million (approximately $46 million) to snap up Isla de sa Ferradura, a 14-acre private island resort off the coast of Spain's Ibiza. The main hacienda has a fireplace, several terraces, a home cinema, a pool, a Jacuzzi and a grand piano.

The Last Resort: Look north for bargains. Canadian islands tend to be much cheaper than their U.S. counterparts. If you still can't afford one, consider renting an island for a few weeks each year. If that's not enough, pick up a copy of The Caretaker Gazette and hunt for a job looking after someone else's piece of paradise.