How do people afford renting out entire sims/homesteads at these prices?

[Andy Greenstein]

Just had a quick question.  I noticed most homesteads are going for around 7000 L$ a week (or less), which equals 28,000 L$ a month.  This is about $113 a month USD.  How are they making any profit, considering it costs $125 USD monthly to simply pay for the Homestead?

[Loco Mycron]

I bought my Homestead Sims back in 2007 / 2008. At that time the monthly tier was $75 / month. A few years later, the monthly tier went up to $95/ month for the people who were paying $75 and new buyers after that time had to pay $125/ month. The same tier rates apply today. The term used for the regions which are old enough to incur the lower tier rate are called “Grandfathered”.

When Homestaed Sims were priced at $75/ month - they only had 1875 prims available.

When the cost went up -the prim allowance increased from 1875 to 3750.

[Nova Convair]

7000 L$ a week is not 28000 L$ a month but approx. 30300 L$. (how many weeks has a year hmmm?)
That is a little below 125 US$ but of course you can't make any money at that rates, but loose a bit.

So a big landowner either gets a rebate or has quite a number of grandfathered sims to keep things in the plus. I'd be interested too in how that works.

 

[Loco Mycron]

Yes like any business, if you buy in bulk from the supplier you can negotiate good discounts.

[Andy Greenstein]

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Loco Mycron wrote:

I bought my Homestead Sims back in 2007 / 2008. At that time the monthly tier was $75 / month. A few years later, the monthly tier went up to $95/ month for the people who were paying $75 and new buyers after that time had to pay $125/ month. The same tier rates apply today. The term used for the regions which are old enough to incur the lower tier rate are called “Grandfathered”.

When Homestaed Sims were priced at $75/ month - they only had 1875 prims available.

When the cost went up -the prim allowance increased from 1875 to 3750.

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 Ah, that makes sense.  My account is actually from 2004, so I have the gradfathered stipend of $500 L$ a week.  If I purchase the quarterly or yearly subscription I actually make money because of this.  I hadn't considered this would apply to land as well.  Thanks.

[Andy Greenstein]

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Nova Convair wrote:

7000 L$ a week is not 28000 L$ a month but approx. 30300 L$. (how many weeks has a year hmmm?)

That is a little below 125 US$ but of course you can't make any money at that rates, but loose a bit.

So a big landowner either gets a rebate or has quite a number of grandfathered sims to keep things in the plus. I'd be interested too in how that works.

 

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Good point.

 

Thanks for the reply.

[Andy Greenstein]

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Loco Mycron wrote:

Yes like any business, if you buy in bulk from the supplier you can negotiate good discounts.

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This is what I was assuming.

 

Thank you!

[ChinRey]

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Nova Convair wrote:

So a big landowner either gets a rebate or has quite a number of grandfatheredsims to keep things in the plus. I'd be interested too in how that works.

 

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Not even grandfathered sims will make a profit at that rate since there will always be some vacant rentals eating up your margings. And don't forget that there is a substantial startup fee for private sims too.

There's certainly some overselling going on - you rent out more prims than you have, figuring that not everybody will spend their entire quota but even that can't explain the difference between the official tier and the actual rental prices.

The only possible explanation is that the big landowners get huge discounts. Makes sense too. As much as it goes against the "level paying field" illusion many in SL still seem to believe in, fact is it is much easier for LL to rent out a hundred sims to a single person than 200 halfsims to 200 different people.