Sunday, March 4, 2007

Land -- wouldn't it be nice...

Land in Second Life -- it's an interesting situation. Perhaps the best option is to purchase a private island, shared amongst friends. Why?

Well, thanks to a very generous person, I've recently tasted land ownership for the first time. Although I am VERY fond of my 512 sq m plot, the 117 prims allotted are just not enough to comfortably furnish a place to live. Still, I'd like to show off what a few friends and I have done with the place. Here's a pic:

But, now, not surprisingly, I want more space. I've notecarded my 3 adjacent neighbors asking if they might be interested in selling, but no responses thus far. And in the long run, the people in the sim trying to get extortion money with their 16 sq m plots with giant, rotating eyesores will still be there.

I've looked into land for sale elsewhere on the mainland, and even educated myself a bit on how LL land auctions work, for entire Sims as well as parcels. All of which makes me wonder whether the best option is to get together with other like-minded individuals, and going all-out and purchasing a private island.

Rentals I would definitely consider for the short-term, but in the long-term, it doesn't really make financial sense. Owning for long enough should provide savings.

Mainland small parcels
  • at historical high prices now, generally over L$13 per square meter
  • historically, just half a year ago, land could be obtained for L$6 / sq m
  • a "quality" parcel (protected water-front), might run to L$20-30 per square meter; this gets REALLY expensive
  • at risk of plummeting in value, if the rumors of LL's stepping up sim releases are true
  • no matter what the neighborhood looks like currently, you might always end up with "land griefers" putting up their ugly signs, or starting up a giant camp-chair driven casino

Mainland entire sim auction purchase
  • because a quality parcel can run up to L$30 per square meter, I wondered whether a better way to obtain a "quality" parcel might be to purchase an ENTIRE sim at auction, keep the nice parcel for my own use, and then sell off the rest, hoping to not take on too much of a loss (i.e., selling off parcels for L$, and then converting to USD)
  • the goal would NOT be to become a baby land baron, but merely to acquire the small parcel for a net cost that would be less than trying to purchase it separately
  • here's how the math sort of worked out:
    • mainland sims are now being auctioned at ~$3,000+ USD
    • tier for an entire 65,536 sq m sim for a month $195 USD
    • exchange fees to recoup L$ to USD transfer 3.5%
    • current exchange rate ~L$270 per USD
    • $3,195 USD = L$ 862,650; increase that by 3.5% = L$ 892,842
    • divide by 65,536 sq m in a Sim, means you'd need to sell the whole thing off at an average of L$ 13.6 per sq m, just to break even
  • this REALLY makes me respect the Land Barons, who must be working at really slim profit margins (granted, their $195 USD of tier is split amongst many Sims, not just one)
  • with this tight a margin, I could imagine not being able to sell all of the rest of the Sim, and getting stuck with additional months of tier fees
  • sounded rather risky
  • and even if it succeeded, I might end up living next to a giant lag-inducing casino, under a neon sky of rotating porn advertising

Private Island

  • when mainland sims are auctioning for $3,000+ USD, it starts to make the startup cost of a private island at ~$1,700 sound almost reasonable
    • also, unlike the current mainland sim auction prices, I'd be really surprised if LL dropped prices of Private Islands, given that they've just recently increased them; this makes it perhaps a bit more stable of an "investment", as its value should not drop precipitously
  • add that the complete control you have over what types of neighbors will be allowed, and the advantage of increased terraforming flexibility, and it sounds like a better guarantee of long-term pleasant surroundings
  • however, monthly island fees are $295 USD/month, compared to $195 USD/month for a mainland sim's worth of tier
  • and, as an island owner, you are left with the bill, no matter what. You can't really "sell" off parts of the island; in the end, the island owner is stuck with the monthly bill.
  • but it's still an enticing thought. How might this work?

I think the way it could work would be if a group of people with similar overall land desires grouped together and shared an island. Because LL will only recognize one island owner, there has to be somebody willing to take the risk of island ownership.

What I would envision, ideally, would not be a themed community, like the wonderful sims of of Caledon, but more like a Mainland sim where gross inconsideration and eyesores were disallowed. A pseudo-mainland sim, free of ugly signs, laggy casinos, griefers...

So, suppose I was willing to foot the $1,700 bill for a private island, retaining sole ownership of it (seeing as LL only recognizes one island owner)?

And suppose I knew enough people in SL, who felt the same way about just wanting a nice place to live, to rent from me? At a rent enough to offset the monthly $295/month island fee, as well as to slowly offset the $1,700 initial investment?

Mainland tiers: are $15/month for 2,048 sq m; or $25/month for 4,096 sq m. I think many people who want a "nice" place to live are looking at this amount of space.

So, suppose the rent was simply EQUAL to what people would pay in mainland tier:
  • if there were 32 people renting 2,048 sq m plots at $15/month --> $480 USD/month
  • if there were 16 people renting 4,096 sq m plots at $25/month --> $400 USD/month
I kind of doubt a private island could be kept at FULL occupancy, and it'd probably be nice to have a nice central plot of public area, so rent income would be less than that. Plus, rent would probably be paid in L$, so there would be the 3.5% fee to convert to USD (which is how LL accepts Island monthly fees).

Anyone renting under what I envision would have all the benefits of Mainland ownership, and more. They would be able to terraform beyond the +/- 4 meters height change. They would not have to pay the purchase price of currently overpriced mainland.

They would live, without the fear of their neighborhood becoming a horrific laggy eyesore. BUT, they would lose freedom -- need to agree to some basic level of covenant.

Covenant would likely be something like:
  • mixed residential / low impact commercial
  • play nice
  • no horrible rotating signs
  • no maxing out sim capacity with avatars or laggy scripts; i.e.,
    • no camp chair farms
    • no very busy clubs / casinos
  • no terraforming / building heights that would ruin a neighbor's experience
    • probably some sort of "distance to border" / "height" ratio
With such a vague covenant, this really would depend on people "playing nice" and not trying to abuse the system. As such, it would probably work best with a group of friends, and friends-of-friends, as opposed to bringing together complete strangers.

Anyone else interested?