Island real estate
Resort residences and hotels on islands: rental income and your own use.
Overview
Island markets — Zanzibar, Bali, Phuket, the Dominican Republic, the Maldives, Cyprus, Mallorca — combine resort demand with a limited supply of land by the sea. The buyer gets an apartment, villa or room in a resort that is let through an operator and can usually stay there too. How it differs from mainland markets: often a different form of ownership (on a number of islands a foreigner can lease the land for a term rather than own it), remoteness and logistics, seasonality, dependence on flights and on currency. What to check: the form of ownership (freehold or leasehold, and the lease term), a foreigner's right to buy, registration of title, access and infrastructure, the operator and the contract, taxes and charges on the island.
Who it suits
Those who want to combine rental income with their own holidays, and investors ready to accept a higher risk for a higher expected yield. A horizon of 7–10 years or more.
Risks to consider
— Form of ownership: on a number of islands a foreigner can only lease the land; the term and renewal conditions must be checked. — Construction and logistics: the more remote the market, the higher the risk of delay; check the developer and how payments are protected. — Seasonality and occupancy: the real income depends on the season and occupancy, and the figures in presentations are indicative. — Liquidity: the pool of buyers is narrower than in big cities, and a sale can take longer. — Currency and taxes: prices are more often in dollars; taxes and restrictions for non-residents differ by country. — Higher risk: the expected yield is higher, and so is the uncertainty.
Yields, budgets and timelines are indicative, vary by market and project, and are not a guarantee of returns. Obtain independent legal, tax and financial advice before investing.
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