Will the pie become any bigger?

[Bold Burner]

Strange opening line maybe... 

 

Meaning... in general.. is it worth investing money in any kind of business and more specific real estate in SL? 

Aka what is SL's future will the pie become any bigger? 

[Randall Ahren]

The pie appears to be shrinking.

[CaithLynnSayes]

I'm personally not sure about that one. There are a good few established tycoons in SL and from what i heard they don't always take kind to new wannabe landlords. - I also hear constant moaning and complaining about prices and i've seen a few go down in spectacular fashion.

I'm not trying to discourage you because i know too little about this branch within SL. I'm just relaying what i hear. If you want to go that route, do your research and make sure you have a contingency plan of some sort. I'd hate to see another one full of ambition go flat on its face and in dept.

Edited December 2, 2021 by CaithLynnSayes
typo

[Coffee Pancake]

Replace "investing" with "speculating"

Simply hurling money at something is not investment, especially in the case of land where that "investment" requires a fixed recurring fee to keep it alive.

The break even point constantly increases over time and the value can only be recovered on sale, if you can find a buyer.

To keep this simple the numbers have been rounded out a lot.

Say you buy a 1024 parcel on horizons. Get out of bed price to purchase the plot is 100,000 L$. It costs you 10,000 L$ per year to hold that parcel (price of annual premium, less value of years stipend at L$300 a week) . If you hold it for a year, to break even you need to sell that parcel for 110,000 L$, assuming you don't spend any of the stipend.

But it's not that simple.

Land buy in prices are artificially held high by a rash of other speculators playing the same game, at any point about half the land on horizons is held by speculators and not placed for sale in order to create artificial scarcity, many of these parcels have been owned by the same speculators since the land was launched and they payed significantly less than 100,000 L$ to get started. They can under cut you and still make a profit. Some of these speculators are operating with tier from vintage accounts granting up to 4096 sqm of free teir, they do not have monthly upkeep costs. You can't buy a vintage account as LL do not permit accounts to be transferred.

But it's worse.

I've scripts tracking parcels changing hands on the Horizons region I have some land on for the last few years. Land is not moving from speculators to regular customers, it's almost exclusively being quietly shuffled between land holding groups, much of this happens on parcels that are never set for public sale. (originally the intent was to watch for neighboring parcels coming up for sale so I could expand, however the resulting data has been an eye opener)

In short it's ebay beanie babies (and collectables in general).  Some sell for extremely high values and are bought by the seller in a wash sale with a second account, this creates the appearance of value and profits. Existing speculators are able to say (and show evidence of) of prized collectables holding a high yet entirely fictitious value in order to lure a mark into believing the apparent value and buying in only to find there are no future customers for the purchased item.

Wash sales are the norm.

In SL this can be further be masked by apparent and fictitious rental incomes.  A land owner rents a parcel, has an alt as a tenant and moves the same money in a circle. Apparent occupancy is common, well decorated pretty homes that no one ever uses.

I have been repeatedly offered low ball sums for parcels I own (and actively occupy) on horizons, or special slightly discounted 'buy it now quick" offers by land speculators and their alts. 

Mainland in general is plagued by these practices with single landowners often operating multiple land groups.

Land auctions from LL are the only way to procure land without being a mark, however, existing speculators play this market too often buying land at over inflated prices in order to maintain their monopoly and hold inflated land values.

LL do not care what happens so long as someone is left holding the land and paying their tier fees.

 

This behavior is endemic and why I wish @Linden Lab @Patch Linden would update the rules to prohibit the rental of mainland parcels. Legitimate land rental operations are a rare minority.

 

You will notice there is no land speculation for private islands which from a tier perspective (not affected by legacy charter accounts) are only slightly more expensive to maintain. Land on private islands is often sold for 0 L$ simply to temporarily transfer technical owner abilities, it's not uncommon for region owners wishing to sell a region to do so well below the costs of buying a brand new region direct from LL.

tl;dr Land values in SL are a lie, the market is stitched up.

 

PS .. It's not uncommon for existing land "investors" to fake final retail sales and then place obnoxious builds in order to try and force nearby actual land users to sell out and move for a low ball price (by having an apparently unconnected alt message with a low ball offer). Skyscrapers, HUGE full bright builds full of cars, pyramids, "art projects" and script lag are common weapons of choice.

Edited December 2, 2021 by Coffee Pancake

[CaithLynnSayes]

15 minutes ago, Coffee Pancake said:

Replace "investing" with "speculating"

Simply hurling money at something is not investment, especially in the case of land where that "investment" requires a fixed recurring fee to keep it alive.

The break even point constantly increases over time and the value can only be recovered on sale, if you can find a buyer.

To keep this simple the numbers have been rounded out a lot.

Say you buy a 1024 parcel on horizons. Get out of bed price to purchase the plot is 100,000 L$. It costs you 10,000 L$ per year to hold that parcel (price of annual premium, less value of years stipend at L$300 a week) . If you hold it for a year, to break even you need to sell that parcel for 110,000 L$, assuming you don't spend any of the stipend.

But it's not that simple.

Land buy in prices are artificially held high by a rash of other speculators playing the same game, at any point about half the land on horizons is held by speculators and not placed for sale in order to create artificial scarcity, many of these parcels have been owned by the same speculators since the land was launched and they payed significantly less than 100,000 L$ to get started. They can under cut you and still make a profit. Some of these speculators are operating with tier from vintage accounts granting up to 4096 sqm of free teir, they do not have monthly upkeep costs. You can't buy a vintage account as LL do not permit accounts to be transferred.

But it's worse.

I've scripts tracking parcels changing hands on the Horizons region I have some land on for the last few years. Land is not moving from speculators to regular customers, it's almost exclusively being quietly shuffled between land holding groups, much of this happens on parcels that are never set for public sale. (originally the intent was to watch for neighboring parcels coming up for sale so I could expand, however the resulting data has been an eye opener)

In short it's ebay beanie babies (and collectables in general).  Some sell for extremely high values and are bought by the seller in a wash sale with a second account, this creates the appearance of value and profits. Existing speculators are able to say (and show evidence of) of prized collectables holding a high yet entirely fictitious value in order to lure a mark into believing the apparent value and buying in only to find there are no future customers for the purchased item.

Wash sales are the norm.

In SL this can be further be masked by apparent and fictitious rental incomes.  A land owner rents a parcel, has an alt as a tenant and moves the same money in a circle. Apparent occupancy is common, well decorated pretty homes that no one ever uses.

I have been repeatedly offered low ball sums for parcels I own (and actively occupy) on horizons, or special slightly discounted 'buy it now quick" offers by land speculators and their alts. 

Mainland in general is plagued by these practices with single landowners often operating multiple land groups.

Land auctions from LL are the only way to procure land without being a mark, however, existing speculators play this market too often buying land at over inflated prices in order to maintain their monopoly and hold inflated land values.

LL do not care what happens so long as someone is left holding the land and paying their tier fees.

 

This behavior is endemic and why I wish @Linden Lab @Patch Linden would update the rules to prohibit the rental of mainland parcels. Legitimate land rental operations are a rare minority.

 

You will notice there is no land speculation for private islands which from a tier perspective (not affected by legacy charter accounts) are only slightly more expensive to maintain. Land on private islands is often sold for 0 L$ simply to temporarily transfer technical owner abilities, it's not uncommon for region owners wishing to sell a region to do so well below the costs of buying a brand new region direct from LL.

tl;dr Land values in SL are a lie, the market is stitched up.

 

PS .. It's not uncommon for existing land "investors" to fake final retail sales and then place obnoxious builds in order to try and force nearby actual land users to sell out and move for a low ball price (by having an apparently unconnected alt message with a low ball offer). Skyscrapers, HUGE full bright builds full of cars, pyramids, "art projects" and script lag are a common weapons of choice.

I knew certain things are going on with land. I didn't know the rabbit hole was that deep. - Interesting read.

[Coffee Pancake]

I suspect the information I have been able to gather from scripted logging and inspecting land ownership and occupancy trends is just the tip of the iceberg.

You will notice on Horizons almost every region has some parcels with an acquired date matching the horizons launch date & often sporting the default themed sci-fi homes.

No retail customer would pay years and years of tier fees and never bother to rez a single prim, many are not for rent or being used as prim-bank land either.

[ChinRey]

4 hours ago, Bold Burner said:

Meaning... in general.. is it worth investing money in any kind of business and more specific real estate in SL?

No, you have no chance whatsoever. The big established rental businesses paid down their initial costs years ago, they have a safe income from old well established tenants and they pay lower fees to LL than you - so much lower they actually charge their tenants less than you will have to pay LL.

If that wasn't enough, LL is mainly focused on their own rental business these days, undercutting even the land owners who got in early enough to have grandfathered regions.

In other words, even if the pie somehow got bigger, you wouldn't get a slice of it.

 

4 hours ago, Bold Burner said:

will the pie become any bigger? 

It's possible but extremely unlikely and it certainly won't get much bigger. Apart from the recent Corona boost, the trend has been going slowly but steadily downwards for over a decade and there is no reason why this should change.

Edited December 2, 2021 by ChinRey

[Maitimo]

3 hours ago, Bold Burner said:

Strange opening line maybe... 

 

Meaning... in general.. is it worth investing money in any kind of business and more specific real estate in SL? 

Aka what is SL's future will the pie become any bigger? 

I think that point passed about eight years ago. Real estate is currently at the lowest price its ever been. Even land-barons won't pick up land at more than L$0.2 or so per square meter and if they do, no-one else would buy it. Concurrent users hasn't increased in years, except for a brief spike at the start of the pandemic. If financial investment is your only interest (and you're not a full-time content creator making womens clothes, hair or bodies) then SL is not the place to look for getting rich. I very much doubt that any virtual world, present or future, ever will be now.  

I think SL will survive for years to come but with a slowly declining userbase and economy. It'll just be the same old people, a gradually ageing userbase, until enough people have died of old age that there isn't enough left to keep it going.

[Arduenn Schwartzman]

From a zero-sum game point of view, to scare away any new, potential competitors, I'm obliged to tell you: no, the pie is shrinking. Big time. Don't do it.

In other news: can anyone on this forum give me some medical advise?

Edited December 3, 2021 by Arduenn Schwartzman

[Lindal Kidd]

Here is the best medical advice you will get from any internet forum, Arduenn:

SEE YOUR DOCTOR.

[Arielle Popstar]

19 minutes ago, Lindal Kidd said:

Here is the best medical advice you will get from any internet forum, Arduenn:

SEE YOUR DOCTOR.

Since the doctors opinion is currently regulated by the government:

SEE YOUR POLITICIAN

[Zidaya Zenovka]

Even if there was a chance of making a decent profit in SL the last thing anyone needs are more land barons or landlords. It's one thing for creative types to make a profit-it's capitalism but on a limited scale. It's another thing to end up having people buy up sims then turn around and jack up the cost of owning one. That or do things like what one land group I saw was doing and getting businesses to rent at a low tier then slowly nudging up costs once their renters had become firmly established. I'm more for community groups who rent land as at least then you know the money you're paying is helping support the community you're part of. This whole aspect of SL where it supports late stage capitalism is one of its worst aspects.

[Arduenn Schwartzman]

1 hour ago, Lindal Kidd said:

Here is the best medical advice you will get from any internet forum, Arduenn:

SEE YOUR DOCTOR.

Oh. Ok. (I was of course being sarcastic. I am aware that asking for medical advise on an internet forum is the dumbest thing you can do). And what about advice on making investments? You think this is the right place to ask?

Then again, maybe I misunderstood the OP's question, because 1. I imagine most people are quite clueless about investing/speculating, but are willing to give their 'expert' advise nonetheless, which is probably as valuable as the advise given by the late Mr. Goxx, and 2. if there are real experts out here, I imagine they either keep their mouths shut or give the OP misleading advise for their own financial benefit. Maybe the OP means whether it's worthwhile roleplaying a real estate investor in SL?

Only if you have 1. a nice logo and a catchy company name, 2. a nice business suit and 3. a skybox decorated as an expensive-looking office. In that case, I can highly recommend Second Life.

Edited December 3, 2021 by Arduenn Schwartzman
Added a link to #BOO

[Teagan Tobias]

1 hour ago, Lindal Kidd said:

Here is the best medical advice you will get from any internet forum, Arduenn:

SEE YOUR DOCTOR.

 

39 minutes ago, Arielle Popstar said:

Since the doctors opinion is currently regulated by the government:

SEE YOUR POLITICIAN

 

Politicians are owned lock stock and barrel by Corporations,

SEE a CEO

 

[Coffee Pancake]

49 minutes ago, Arduenn Schwartzman said:

Oh. Ok. And financial advice then?

A fiduciary.

[Kyrah Abattoir]

Just make/provide something of value instead?

[Hunny Bunny]

[Krystina Ferraris]

5 hours ago, Arduenn Schwartzman said:

In other news: can anyone on this forum give me some medical advise?

If you normally see a veterinarian than yes, I’m here 😃

Edited December 3, 2021 by Krystina Ferraris

[Rat Luv]

4 hours ago, Krystina Ferraris said:

If you normally see a veterinarian than yes, I’m here 😃

Oh good! Can you send me some of this for protection against Omicron? 🐴😈

[ChinRey]

11 hours ago, Kyrah Abattoir said:

Just make/provide something of value instead?

That's not normally how people get rich you know.

[Evah Baxton]

Does the pie taste delicious?

[Sprout Evergarden]

5 hours ago, Rat Luv said:

Oh good! Can you send me some of this for protection against Omicron? 🐴😈

you might want to eat raw meat until you get worms** so you can get prescribed that drug in a form that is approved for use in humans your less likely to hurt yourself with it. Yes It is available with a prescription for humans and is even on the "WHO Model List of Essential Medicines" 

**please don't actually give yourself worms or use a Anthelminthic to attempt to prevent the Coof you will just get the Coof on top of a case of the Intentanal creepy crawlers 

Edited December 4, 2021 by Atosuria Daviau

[Prokofy Neva]

On 12/1/2021 at 11:50 PM, Bold Burner said:

Strange opening line maybe... 

 

Meaning... in general.. is it worth investing money in any kind of business and more specific real estate in SL? 

Aka what is SL's future will the pie become any bigger? 

Real estate is never an "investment" in SL. It's a cost center, a sunk cost. It is like the rent of a building in a city where your business is. You don't call that an "investment". It's like a loan from Fanny Mae you pay off for decades. Land has value, but to imagine that if you have proceeds from a land business you must "plough them back into the business as an investment" is the gravest error any land dealer makes in SL and why so many fail.

The land business is a complex combination of land, landscaping, content, management, service and from that combination perhaps you might make a profit, but there are constant costs and unanticipated expenses.

 

[Krystina Ferraris]

6 hours ago, Rat Luv said:

Oh good! Can you send me some of this for protection against Omicron? 🐴😈

🤣 yes and better stock up now if you want to be sure sure as regulations are changing from January and you’ll need your vet prescription then for every tube 🤣🤣 

[Walelu Summerwind]

I didn't read all of the posts above me... Pie or Pi.. that is the question. 3.14 .. a magical ratio! 😁