Feedback Needed: Your opinion on pricing rental homes

[Angie Mornington]

Hi all,

 

This is 15 rentals on 1/4 region. A mini community on mainland waterfront. 10 bungalows and 5 skyboxes.

How much would you pay weekly to rent a really nice bungalow with a 100 prim allotment? 

How much would you pay weekly to rent an already furnished bungalow with a 75 prim allotment?

 

thanks in advance  :)

[Persephone Emerald]

I think around $L 2/ prim/ week is reasonable for an unfurnished rental house, but I've rented nice little apartments for as little as $L 1/ prim/ week. You should take into account what other amenities are being provided along with the prims. Is there a functional prim counter the tenant can use? Is there a door lock that can have multiple avatars added. Is there a security system beyond just locking the door? Can the renter set their own music or video stream? Is there a nice view and/or road access? Is the parcel separate from other rental units with enough space and/ or restictions on voice & sounds that they'll have some privacy? Are there public spaces shared by tenants, such as a cafe, gardens or sandbox?  Also, avoid alpha textures in your units that could interfer with a tenant's hair or furniture. 

My advice is to start no higher than $L 3/ prim/ week & no lower than $L 2/ prim / week. If you don't get any bites, step up your advertising.  If you still don't get enough tenants, then you can start dropping the price, but never go below $L1/ prim/ week.  One good incentive is to offer one free week, after the renter pays for 2 weeks. Once they get settled in, they're more likely to stay, assuming your environment is pleasant.  As a landlord, you have to be really helpful & available at the beginning. Help them work out any problems they have with the property straight off. Once they're settled, they'll usually leave you alone more or less, & then you can do the same.

I've been both a renter & a landlady, & I'll tell you it's work if you want to keep your units rented & break even, let alone make a profit. Especially with the free Linden Houses available to Premium members, you have to offer something special to make potential tenants choose your place over all the others available in SL.

[Angie Mornington]

Thank you so much! You have been a tremendous help!  :smileytongue:

[Erwin Solo]

FYI, if you are at full SIM tier on the mainland and hold the 1.1 SIMs allows by the 10% group bonus, then your cost is L$0.695 per prim per week at a L$255 to US$1 exchange rate.  So, if you are able to charge L$1 per prim per week for __all__ the prims (including the ones you provide in home and landscaping), and maintain a 70% occupancy, then you roughly break even (counting your time as free). 

 

The math works like this:

US$195/month * L$255/US$ * 12 month/year / 52 weeks

= L$11475 per week for full SIM tier on mainland.

 

Then, if you hold a full SIM plus another tenth (i.e., 1.1 SIM) as allowed by the group bonus, you get 1.1 * 15000 = 16500 prims.

 

Then, your cost per prim is L$11475 per week / 16500 prims

= L$0.695 per prim per week, as your cost. 

 

So, if you rent for L$1/prim per week and maintain a 69.5% occupancy (average over time), you break even. 

 

 

[Erwin Solo]

Now, let's repeat for the case where you are at Quarter SIM tier. 

The math works like this:

US$75/month * L$255/US$ * 12 month/year / 52 weeks

= L$4413.5 per week for Quarter SIM tier on mainland.

 

Then, if you hold a Quarter SIM plus another tenth (i.e., 1.1 * 0.75 SIM) as allowed by the group bonus, you get 1.1 * 15000/4 = 16500/4 = 4125 prims.

 

Then, your cost per prim is L$4413.5 per week / 4125 prims

= L$1.07 per prim per week, as your cost.

 

So, if you rent for L$1/prim per week (for all prims including improvements like skyboxes and landscaping) and maintain a 100% occupancy (average over time), you only loose a little each month.  Specifically, you take in L$4125 and you pay out L$4413.5, for a loss of L$288.5 per week.

 

If you have an occupancy of say 70%, and you use 100 prims for each of your 15 lots (1500 prims total) for skyboxes and signs and such, then you will be renting 2625 prims (= 4125 - 1500), and receiving an income of L$1 per prim * 2625 prims * 70% occupancy (averaged over time) for a gross income of L$1837.5 (averaged over time).  When you subtract your L$4413.5 per week tier from your L$1837.5 income, you yield a net loss of L$2576 per week. 

 

[Erwin Solo]

Now, let's do the math for a Linden Home provided "free" with a premium account.

The premium account cost US$72 year if you pay by the year, divided by 52 weeks = US$1.385 per week.  At an exchange rate of L$255 per US$, this works out to a cost of L$353 per week. 

However, the premium account holder gets L$300 per week stipend from their premium account, for a net cost of L$53 per week (= L$353 - L$300). 

Then, the premium account holder gets a home and nice landscaping on a 512 square meter lot plus an allocation of 117 prims.

So, the premium account holder's cost is L$53 per week divided by 117 prims = L$0.45 per prim per week.   

[Persephone Emerald]

Yup. If you can be content living in a Linden home, then going Annual Premium & living in a Linden home is the way to go.

If you want more land & prims, however, you're going to pay for it.  Either you rent, lease, or "own"  land that you pay for in monthly tier payments.

[Erwin Solo]

Agreed, but what the original poster is offering is less than a Linden Home.