With private islands, as with all things, price is a function of demand. That tropical, palm tree-laden island with the white sandy beaches we all dream of is going to appeal to a lot more people than a similarly-sized island in North Dakota - and you'll pay accordingly. Location is the most important factor in determining an island's price. While islands in the Caribbean or South Pacific typically cost US$ 1 million and up (exceptions exist, of course), islands in more northern climes can be had for a fraction of that price.

Availability is another factor to consider. Private islands for sale in tropical locales are more rare, and consequently more expensive. Canada, with its million lakes and thousands of kilometres of coastline, has more islands than any other nation.

Another factor to consider when purchasing an island is the degree of development. Are you looking for an undeveloped island, left in its natural state, or are you looking for a property with existing facilities? If you're planning on building a home or cottage, bear in mind that construction costs on islands are significantly higher than on the mainland - budget at least 1.5 times the price you'd normally expect to pay for construction. While untouched islands tend to be cheapest, you may end up saving both time and money by purchasing an island with an existing dwelling.

An excellent way to determine what type of property is best for you is to rent an island for a while. Many island owners rent their properties for all or part of the year, often at rates comparable to a typical hotel stay.

Once you've decided on the type of island you're interested in, the serious research begins. Spend as much time as possible investigating what islands are available on the market. The Internet is an invaluable tool for this. Contact the island owners or their representative (as the case may be) and ask questions - lots of questions. You'll probably want to know about the island's degree of accessibility throughout the year, the ease and method of supplying the island with food and other necessities, details on navigating the surrounding waters, and a whole host of other issues unique to an island purchase.

The following step by step guide has been compiled to help you on your way too  making a successful Private Island Purchase:

1. Make sure island ownership is right for you.

Everyone dreams of owning a private island, but that dream can quickly turn into a nightmare if island ownership isn't right for you. Island owners are usually island lovers, investors or those willing to pay a premium for privacy. 

Living full time on a private island may seem idyllic, but an island lifestyle requires a certain kind of personality. Owners typically possess a strong sense of independence and individualism. These traits are not exclusive to island ownership, but if you plan to live on the island, self-sufficiency and perseverance are important.

2. Decide on type of island you want: undeveloped, turnkey or somewhere in between.

The type of island you purchase depends a lot on its intended use. Do you plan to live there full time with your family, or will you be visiting just for summer holidays? Are you planning on building a resort or running a business on your island?

Keep in mind that undeveloped islands can be challenging, whether it means getting rid of sand fleas or obtaining permission to build, and that it can take years to realize your vision.

Owners who develop their own island are often disappointed when they put it back on the market, as their personal investment seems disproportionate to the island's market value.

On the other hand, while a developed island may reflect too personally the taste and needs of the previous owner, a resort or business can offer a great turnkey investment opportunity.

An island continues to cost its owner long after it’s been paid off. And while islands are often less expensive than waterfront on the mainland, higher running costs need to be part of your budget.

Buying a turnkey island will save you money on development, but if you're not there all the time you'll need to factor in the cost of caretakers and regular maintenance. With an undeveloped island, you must take into consideration the extra costs involved in building, as supplies and workers need to be brought in from the mainland, often at twice the price. Water, electricity and communication can also be costly.

Don't spend your last dollar on a private island unless you're patient and can spread the cost of development over a period of years.

4. Decide how much time you will spend on your island.

The amount of time you plan to spend on your island will help determine an appropriate region. If you plan to pack it all in and live there full time, you’ll probably prefer a locale with a mild climate all year round, like Florida or the Bahamas. The same is true if you plan to spend a week here and there on your island, regardless of the time of year. 

Perhaps you're looking for a summer retreat for the family – a place to sail and explore in the warm months. In that case, your island environment need only be temperate during the summer, as it is in Maine or Nova Scotia.

When you're thinking about this part of island buying, be realistic about how much time your schedule will allow you to spend at your hideaway. And don’t forget to consider the time and effort it will take to get there.

After determining your requirements based on the previous steps, it's time to narrow down your region.

If you've decided your budget is limited and you'll only be spending summers on your island, Canada or the United States might be for you. If budget isn't a factor, a turnkey Bahamas villa could be a fit. If you're going to live on your island all year long but can't spend a large fortune, you may want to island shop in the Philippines.

If you never plan on leaving your island, it doesn't matter how remote it is. On the other hand, if you're only spending a week here and there, you won't want to travel across the world to get there.

Different parts of the world also have different flavours, so make sure the culture and language of your favourite regions enrich your experience rather than becoming obstacles.

6. Start compiling a list of potential islands.

Once you've researched the regions that interest you, you’re ready to start looking at specific islands in these areas to determine whether they suit your needs. Here are just a few things to consider at this stage:

• If you travel frequently, you’ll need access to a major airport. 
• If you have health concerns, an island more than an hour away from a mainland hospital may not suit you.
• If you plan to develop your island, you'll want easy access to materials and workers.

7. Enquire about your island.

At this point, your search has been narrowed down considerably and you’re ready to direct informed questions to an island's owner or broker. Each listing on Private Islands Online is connected directly to the owner or broker of a particular island. The brokers we work with are regional experts familiar with the island in question and are the most knowledgeable and respected island professionals in the business. They can provide detailed answers to your questions.

8. Visit the island.

After learning enough about an island to become seriously interested, the next logical step is organizing a visit. The island's contact person will be more than happy to arrange this for you. When you visit, make sure you 'try before you buy.' If you can't arrange more than a site inspection of your potential island, rent an island in the area to make sure you're comfortable in your new environment. Are the people friendly? Is the area everything you'd imagined? Are amenities available and reliable?

9. Obtain legal counsel.

If a certain island has you smitten and you're ready to buy, obtain local legal counsel. Different countries have vastly different laws for foreign investment. Real estate practices in areas like the US and Australia are transparent, but the same cannot be said for places like the Philippines or Central America.

Always hire a lawyer to seal the deal. Among other things, a lawyer will make sure the title to your island is clear and that there are no other claims on your land.