How much are extra prims worth on a homestead let out as rental properties?

[Jason Levane]

I have a homestead region I rent out as furnished homes with a prim allowance for the tenants to "make it their own".  Once in awhile a tenant might need some extra prims, how much should I charge (per prim) for these "extras"??  Can anyone help me?

[Rolig Loon]

It's entirely up to you.  There's no rule and there's no standard practice. You could decide to charge for the extra use as a percentage of their normal rental, or as a percentage of their normal prim allowance, or you could charge a flat fee (like L$50/week for each 100 extra L.I., maybe), or you could just make up a number. The only "rule" I can advise is consistency.  Charge everyone the same way, whatever method you choose.

[Lindal Kidd]

Rolig is right, but let's fiddle with a few numbers.

A Homestead region has a land impact allowance (oh heck, let's just call it "prims") of 5000. Let's say you have divided your region up into 16 4096 square meter parcels. Let's also say you'd like to reserve 1000 prims for communal things like a landscaped common area and/or for your own use. So you have 4000 prims to give out to the residents. Divided by 16, that gives each resident 250 prims.

Now, your region is costing you $109.00 USD per month. In terms of L$, that's about L$27,250 per month. Let's also say that you only have 12 parcels rented, on average, and want to collect enough rent to cover your tier at that occupancy level. You'd need to charge L$ 2271 per month, or L$524 per week. (Remember, there are 4 1/2 weeks per month, not 4. The exact conversion is 12/52.)

That puts your price per prim per week at 524/250 = L$2.10 per prim per week. So now you have an idea of what an extra prim might be worth.

While I'm here, let me bring up something that's not directly related, but pretty important. I learned this from Desmond Shang, the owner of the Caledon regions. He always keeps a reserve of 6 months' tier socked away. This lets him weather a few months of bad times, and lets him see trends forming in time to either add regions to satisfy demand, or cut back on regions if business is falling off. Whether you accumulate this reserve by charging higher rents, or fund it with part of your startup capital, it's important that you HAVE a reserve, or one or two slow months will wipe you out.

Edited December 29, 2022 by Lindal Kidd