Land prices make it impossible to start a real estate company...

[Exiveria Ornitz]

So, I've noticed that many people seem to rent land for a lower price than the total combined monthly cost of their region. How can anyone afford to do this? Is there a way to get a region for less than $295 USD a month? I don't see how a real estate company can stay in business if the total amount of land they have on the region comes to $265 fully rented, and the LL fee is $295. That means they would still have to pay out of pocket every month with no chance to make any profit, with expansion only costing more money in the long run instead of making more.

Am I missing something?

I just bought a full region and I'm already regretting not doing more price research first. I'm willing to spend some money to get this started and I realize that the low land prices mean that even if I do make a profit, I won't make much. But it's more of a hobby than a way to make money, however I can't afford to do this if my rentals don't even pay the LL tier.

Thanks for any help.

[Sarahbuxso]

I hear you, I was thinking it was 195 per month but 295 is just insane.. I won't pay for that.

[Serena Stroikavskoi]

You have to realize that some estate owners purchased the sims before the prices went up so they are grandfathered in with a lower tier rate. Also some purchase sims in bulk which will offer discounts. This usually depends though if they are doing a region on it's own server and/or sim or one on mainland. As mainland sims are just the $195 tier fees.

More than likely though they are renting on a per prim basis in which they rent a big area with very few prims or to an effect layer the sim. 

[Amethyst Jetaime]

Some  of these estates can do this because, as Serena said, they own grandfathered sims and pay a lower tier.  The grandfathering will end if they ever sell the region to another estate.

The largest estates that own a large number of sims get bulk discounts on their tiers.  If I remember correctly you have to own 20 or more sims to receive begin getting bulk rates. 

Yes you are competing against estates that can offer land at your cost, so you should compete by offering added value to your tenants.  Offer premium amenities of some sort, excellent customer service, a reasonable covenant that you enforce,  Make the lots you put on the market as attractive as possible with quality terraforming and landscaping, even if your tenants can re- do their own when they buy or rent.. Perhaps have a choice of houses you can rez on their lot for free if they choose.  There are a variety of other options you could consider. 

Not every sim in SL gets a discount and there are tons of them that are successful.  You can be too if you have a good business and market plan and have resources to cover tier until you get all your lots occupied..

[Exiveria Ornitz]

Thank you for the comments. I now feel confidant that I can succeed.

One other thing, which type of estate land would you say there is greater demand for, residential or commercial? Though that might be a pointless question, considering I only have one sim and it's not connected to anything, eg. not very good for residential.

Thanks again!

[Theresa Tennyson]

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Exiveria Ornitz wrote:

Thank you for the comments. I now feel confidant that I can succeed.

One other thing, which type of estate land would you say there is greater demand for, residential or commercial? Though that might be a pointless question, considering I only have one sim and it's not connected to anything, eg. not very good for residential.

Thanks again!

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I took the liberty of looking at your past posts and see that you're an accomplished musician/composer. Maybe you should try a sim with a musical connection - maybe have a performance venue and offer renters the opportunity to have a regular base for concerts.

[Buttacwup Float]

I have a single residential region i rent out. And I keep it full enough to pay the bill. I don't make any money off of it. Here is how it breaks down. You need to collect about 76,000 L$ per month to make the 295.00 for tier. You get 15,000 prims to sell. if you sell all 15,000 (which can be hard to do) you can sell for about 1.30 per prim. If you sell a more reasonable 13000 prims you could sell in the 1.50 - 1.60 range.

I think what makes a good region is first and foremost that you know what you are doing and are responsive to people. Make sure the whole operation looks and feels professional. Next make your region look very, very nice. Make it a special place people can call home. Design it well, and use top quality materials to landscape and decorate.

Its hard to compete with the big time estates, but you really do not have to. You can build a following and keep your region full with just a little effort.

[Pussycat Catnap]

Its foolish to get into real estate as a business in SL.

 

That ship sailed years ago. Look at the date of the 'how to get rich online' article you read and then look at today's date.

 

If one insists on being an SL landlord some cold reality will set in fast.

You either do it to help make up some funds for some other venue: like a roleplay sim or club... Or you buy up roughly, at least half of an entire SL continent - so that you can hit whatever the secret break point is for being a mega-landlord. This breakpoint is huge. Whatever it is, we don't know. But we do know some landlords SL users often think of as big have yet to reach it...

My bet is that you'd have to buy about 100 to 200 sims...

At that point, you will have insane amounts of money invested in SL, and your return will likely net you enough money to pay for a spot in a trailor park somewhere next to the guy who cooks meth in his RV...

- For that same level of investment, you could pay cash for a few condos in San Francisco and rent them out to techies for a nice cushy upper middle class income. And have laws in place to protect your investment.

 

SL today, is a place to play with virtual barbie dolls. It is not an investment opportunity.

 

 

[Prokofy Neva]

It's true that some people have grandfathered islands for $195.

But there is a big market for homesteads and people who were able to buy up a lot of those when the initial cost of them were cheaper some years ago seem to benefit still.

Its very hard to get islands to pay for themselves because there is such a glut on the market and a slowing of new customers coming in.

I think to make it in the real estate business you have to have multiple kinds of land, islands, homestead, and mainland, and also sell content. You also need special themes that attract long-term customers.