Questions about parcel rent pricing and tier

[Valkyre Pevensey]

I've dabbled in SL off and on for several years now but I'm interested in owning and renting out land now. I've read up on it around the internet but I still have a few questions.

First, about pricing. I may just be having a really dense day, but deciding how much to rent out parcels for to cover the cost of tier is just not adding up. I'll have a few 512sqm plots to rent out soon, but everywhere I go I see crazy low prices that would hardly add up to half of my tier costs if I were to match them. Am I missing something here? 150 $L per week? Does that sound right at all? Maybe I was just in a strange area lol.

And second (also last, I guess), a question about tier itself. I'm still working out all of the group-owned, deeding, contributing tier, etc. I'll figure that out in time. But can a single user surpass the $195/m tier? I'm nowhere near needing that much but it's just something I've been curious about. Not sure if smaller mainland landlords have a way around that using groups or anything.

Thanks in advance for any replies. Some of this might seem sort of silly, but I want to make sure I have a good grasp on all of it before doing too much and making promises I can't keep!

[Muletta]

My experience is - but others may correct me, if I am wrong - that you have to own a lot of land to rent out to others, before you can count on more income from tenants, than you have to pay in monthly land fee...

But I think you should give it a try anyway. It gives a lot of fun, and some very good moments, though, to have places for rent

 

 

[Valkyre Pevensey]

That's the only conclusion I've been able to draw so far. I know private regions work differently so maybe you have to take the plunge and invest in that before you can actually cover your costs. Mainland does seem like it has a certain draw to it after all. I'd imagine it's more appealing to own shops for commercial use. Could just not be meant for profit anymore after LL flooded the auctions with new land and screwed L$/m prices!

Hopefully the answer is just painfully obvious and hiding right under my nose. Been thinking about this non-stop the last few days! Thanks for the input. :matte-motes-bashful-cute-2:

[Wandering Soulstar]

Hi Valkyre,

 

I have played in and out of the rental market now for a number of years and there are a few things that I can pass on to you:

 

-The market today is much slower than in the past, so could be difficult

-To have those low prices and make your tier you need to own at least (by my calculations) at least 1/2 if not a full sim (mainland).

-Odds are you'll never be fully rented out, so unless you are going to make a huge investment and own tonnes of sims .. do not count on making a profit

-It is loads of fun

 

[Valkyre Pevensey]

Ah, sweet, a bit of info. Thanks for the reply. :matte-motes-bashful-cute-2:

I think I can take a bit of loss for a while and just enjoy SL. I'm not exactly sure how owning and renting a full private region works, but I definitely am interested in investing in a lot of tier to try out my luck on mainland. Getting a bonus at work soon and I've been considering setting some of that extra money aside to toy with in SL.

Still a bit iffy on the idea that owning more land somehow makes up for loss though! Is it because higher levels of tier allow you to own more sqm/US$ or something? Kind of like paying for premium annually instead of monthly? That makes sense if that's the case.

I wish I knew more about building and the technical side of SL. Might try to brush up on some of that while I'm diving in again haha. Anyway, thanks again for the information, Soulstar!

[Wandering Soulstar]

No problem .. and what I meant about having more makes it easier .. just look at the mainland tier pricing schedule:

1/4 of a region is $75/mo or $0.02 per prim

1/2 of a region is $125/mo or  $0.017 per prim ($25 less than 2 x 1/4)

1 region is $195/mo OR $0.013 per prim ($105 less tahn 4 X 1/4)

 

See what I mean?

 

[Valkyre Pevensey]

Yup! Like a wholesale discount. That's the key factor I was missing I guess! Well, I guess I'll be getting things off the ground then. Only way to move is forward! If I gain nothing at least it'll be a fun experience. I'm sure I'll meet lots of awesome people along the way too.

[beethros Karas]

http://secondlife.com/land/pricing.php

PLUS V.A.T. 23% For Europians.

Welcome back to Secondlife. We need more landlords; As for the prices you mentioned, i have seen lower. So, as the rest of the people advice you, prepare your self for a lot of fun!

 

[Buttacwup Float]

I am happy to help if you have questions on understanding pricing if you go the private estate route. On mainland though everyone has laid it out for you. The more land you have the less you pay per sqm. When you deed to a group it goes down more. One thing to consider when you charge people and they pay in Lindens. LL charges you in USD not Lindens. So if you collect 150 L$ from a tenant you need to turn that into US$ in order to pay your tier. 

Basically, don't forget your cost in changing L$ back to USD. If you want to make $25.00 to cover your tier, you might think towards buying Lindens, you can get 6200 L$ for 25 USD. However, when you sell the same 6200 L$ back to the exchange to get cash you only get $24.21 back. Not a huge difference but you are loosing a bit of money. I calculate prices using 256 L$ per 1 US$.

Hope that makes sense.

[Amethyst Jetaime]

Here are some more reasons for really low prices

• Some of those rentals aren't for land, but the home itself.  They may have two or more on one parcel of land stacked in levels from the ground up to the sky.  Usually, the lots larger than 512sqm though
• LL gives a tier discount to people that own a LOT of sims, so you can't compete with the price some private estates can charge.
• LL sold a lifetime membership in the very early days that came with free land for life.  The amount of land you got depended on the amount you payed for the membership.  Some early residents got large amounts of land because they bought a high dollar membership, so now they have all this free land they can rent out either in whole or by subdividing the land.

 

 

 

[beethros Karas]

Well,

I think you must tell a little bit more about the fees... because the ammount you mention exchanging L$6,200 it isnt the what a premioum member will receive.

Here is a official copy:

Sell Linden Dollars (Market Sell) 

Quantity of L$:  L$6,200

Estimated Value: US$ 24.22

Estimated Proceeds: US$ 23.35

 

 Fees for Selling L$

Sellers of Linden™ dollars pay a fee of 3.5% per transaction. Proceeds will be credited to your US$ account balance.

Also, please note that if someone exchange more than a spesific ammount, then the goverment (RL) asks invoice and receipt, so they can put taxes to those members and thats what happening...

In usa taxes are 30% (internet incoming taxes)

So, if someone wants to be a landlord, they have to consider to compete those Grand Fathered Landlords Amethyst mentioned and  those who are many years in SL renting out land and dont care of profits.

But the big concern has to be about those people who JUST becaming landlords, or wants to be and they buy 2 or 3 small parcels of 512m or something and then they rent it out really cheap, because they simply dont care to loose them money.

All they do care is to get one (1) tenant and so their role play dream ( become a landlord) comes truth!

As for the lower price per SIM when having many...

Well, I never had many SIMS.. but i know someone who pay US$20,000 per month in SL.. maybe they can ask for an extra discount! We need to ask those people. Ask them!

And of course, if someone read the advertisements of the top agents, they will see these people own more than 500 SIMS ( 500x 300 = US$150000)

So If someone is investing US$150,000 per MONTH... i dont think they will let easily the "pieces of the pie" for others. Im sure they have organized companies with stuff and employees and they rent out lands to the majority of the SL members.

But, of course, you have the spirit as you said and you want to go for it! So, i dont want to be the one to cut your wings, im just saying some details you should know before you invest your real dollars for something you thought it would be different.

Here are some official links as about it.

http://community.secondlife.com/t5/English-Knowledge-Base/Renting-land-from-other-Residents/ta-p/1420695

http://secondlife.com/land/privatepricing.php

http://secondlife.com/land/pricing.php

http://wiki.secondlife.com/wiki/Linden_Lab_Official:Value_Added_Tax_(VAT)_Frequently_Asked_Questions

http://community.secondlife.com/t5/English-Knowledge-Base/Managing-Private-Regions/ta-p/700115

 

p.s I would like to mention, that becoming a landlord it needs some skills. Except the part of building , scripting, terraforming and managing a parcel a business skill is needed; But, I believe the most usefull skill is the one its called: "Drama Queen buster"

The majority of SL renters are exactly as those people who rent a room in a RL hotel.

They will always make 10 phone calls to the reception asking whatever impossible, they will always destroy whatever its easy to brake in their rooms, they will always steal the towels and the soap and generaly they will be a big pain for the hotel owner (yes my dear readers, a hotel owner is suffering lots)

So the same think happens in SL.. The majority of the renters have DEMANDS and a landlord has to be THERE to solve those "issues" asap!!! (Time in virtual runs different - One hour could feel like ages - While 7 years looks like a week passed..

p.s2 Sitting on a desk all day makes the back hearts and cant get cure if damaged. I dont think something can pay that!