What Am I Missing?

[Waialae]

I have rented 1/4 regions in the past, and wondered about the economics of buying a 1/4 region. My rent for most 1/4 regions was about L1,700 - L2,400 per month. But Dashboard > Land Manager > Land Use Fees explains that if I purchase a 1/4 region I will have to pay USD67 per month, which is roughly L15,000. This means that the same amount of land - 1/4 sim - can be enjoyed for either L2,000 or for L15,000 per month. Renting seems an obvious choice, especially given all the airports, military bases, GTFO Hubs, advertising boards, tall walls, low skyboxes, and police stations that plague Mainland regions. It can't be that obvious a choice, can it? What am I missing? Is it worth L13,000 per month simply to write your own land use covenant?

[Waialae]

The difference between tier and rent makes it seem as though landlords must be losing a lot of cash every month, which I suspect is not the case at all. I'm missing something important here, but what?

[Rowan Amore]

Were you renting this 1/4 on a private estate or mainland?  Renting 1/4 of a private homestead region with 1250 prims is generally going for 2000L.  Renting 1/4 of a full private region with 5000 prims is double that price.

 

[Waialae]

Aloha Rowan. Thanks, yes, I've been renting 1/4 private homestead regions that allow 1250 prims. I know that a Full Region allows 20,000 prims rather than the 5,000 on a Homestead, so in theory land on a Full Region should cost 4 times as much. So 4 times the L2,000 rent is L8,000 - not L15,000.  Added to that: the Monthly Maintenance fee is USD 109 (Homestead) or USD 229 (Full). 1/4 of these costs is USD 27.25 (Homestead) or USD57.25 (Full) monthly. A big difference for the number of prims / land capacity is included in the price, but the cost of buying a mainland parcel still defies my limited logic.

[Flower Caerndow]

Was your rent for the quarter homestead at L$1700-2400 for a month or for a week?

 

[Rowan Amore]

The monthly maintenance for a private region...$229. No premium membership required.  20000 prims

The monthly price of a full mainland region...$175. Premium membership required.  22500 prims.

From the company I rented from on private estates.

Full homestead rental...6099L/5000prims or 1/4 full region...4343L/5000. The difference being, you're not sharing your homestead with anyone so you pay more for that feature.  Usually full estate right on a full homestead rental just like a full region rental.    ETA:  Weekly pricing

Full region rental...13500L/20000 prim. 13500/wk for 4 weeks...$224

You can't really compare mainland and private regions equally IMO.  One is private as the name implies.  Total control over terraforming, land textures, etc.and no neighbors!

 

Edited July 10, 2022 by Rowan Amore

[Waialae]

Wow, Flower, you're so right! That was my first mistake: comparing rent (WEEKLY) to tier fee (MONTHLY). So yes, multiply rent by 4 (or to be most accurate, multiply by 52/12). But the mainland parcel still works out to be far more expensive.

Rowan, thanks, good comparison. It looks like the difference in costs reflects the difference in prims / land capacity. I would expect that as the quantity of prims increases the price per unit would decrease - but instead it works out the opposite way: the more prims you buy, the higher the cost per prim becomes. Strange.

I would love to jungle landscape my SL home, but not if the additional tier required means paying over USD2,400 per year! 

[Rowan Amore]

  The monthly price for a full PRIVATE island is $229.  The monthly price for a full MAINLAND region is only $175 with 2500 more prims than a private island.   Mainland is cheaper.

Private...

 

Mainland...

[Waialae]

Thanks Rowan, great comparison chart! Looks like building a Homestead region is less expensive than building a Full region. But renting is still less expensive than building or buying. I can only guess that the big property developers may get some sort of financial incentive to build multiple regions at once, lowering the price of building to the point that renting becomes less expensive. .

[diamond Marchant]

Apologies for posting a spreadsheet/graph (cause it turns people into zombies) but what this shows is that LL charges a different price for mainland tier depending on how much tier you purchase. Their "sweet spot" (where they charge the most) is the first quarter region. If you are a land baron and own a region you are paying the lowest rate. This is why a land baron can make money on a rental even if they are charging you less than you would be paying if you bought the tier yourself. The key thing to observe in the graph is the lines are NOT flat. Prices go up then down. I satirize this pricing scheme in The Parable of the Potato Patch

Edited July 10, 2022 by diamond Marchant
usual typos

[Waialae]

Thanks Diamond, that explains a lot.