Friday, June 1, 2007

Linji and Peronaut Sim rent rate drops

I am proposing a rent drop in the Linji and Peronaut Sims, that will affect all tenants having parcels smaller than 4,096 sq m. Since this affects the Covenants, I'd like to consolidate the two covenants (which are already very similar), into one covenant, for easier organization.

The original rental rate structure was based on a simple premise: match the US$ monthly mainland tier rate set by Linden Labs, converted to weekly L$ prices.

Because the mainland tier rates improve as you own larger amount of land, rental rates per square meter of land were dramatically better for tenants renting large parcels. Also, because the tier rates occurred in "steps," I needed to choose rental rate "steps" as well, which limited all rental parcels to increments of 1,024 sqm (i.e., 2048, 3072, and 4096 sq m). This made for reduced flexibility of carving out parcels.

Proposal: simplify the rate structure to a simple L$ per square meter per week, matching the "best rate" currently enjoyed by tenants holding 4,096 sq m parcels. The following table shows that rental rates will decrease by from 2% to 18%. The prim allowance will remain the same: standard 234 prims per 1,024 square meters.

With the rent drop, current tenants in both sims will have their "days remaining of paid rent" adjusted upwards proportionally, rounding UP by 1 day, and subsequent payments will be at the lower rates.

Area (sqm) Current L$/wkCurrent L$/1024sqm/wkNew L$/1024sqm/wk% rent drop

The simple ratio of L$390 per 1,024 sqm per week will make it easy to figure out rental rates for parcels that are not even multiples of 1,024 sqm as well. Rental rates of additional prims, as available, will remain the same (actually, a piddly 2% price drop), and be calculated at the same proportional rate: L$195/week for an additional 117 prims. And, as stated before in the covenant, I intend that there will be NO rent increases, unless Linden Labs raises the mainland land tier rates. (Actually, if the L$ to US$ exchange rate changes SIGNIFICANTLY, which is hasn't for months now, I'd also have to adjust rental rates, upwards OR downwards.)

For the smaller parcels, I think these rental rates will be amongst the best in Second Life. And for larger parcels, the rates are still competitive.

I'd like to consolidate the covenants for the two Sims as well. The covenants of the Linji and Peronaut Sims are identical, except that with Peronaut, the wording for build heights is that you have to obtain approval from your neighbors BEFORE you build beyond the 2:1 height limits. Strictly speaking, this is not a difference, because in cases of conflict in the Linji Sim, the build height rule would be used anyhow.

I will give everyone a few days (perhaps till Monday) to speak out with any objections. The new consolidated covenant will be posted here, too. Otherwise, I will go ahead as planned. Comments?

PS - if you are curious about the financial ramifications for me, the sim owner, and the future stability of the Sim: the rent drop WILL, obviously, decrease the "margin" that the sims can operate without generating losses. But, I've long ago decided that "profits," in order to recoup the sim auction costs, will not be achievable regardless, so, if I can operate without losses, I still want to provide these "clean" oases on the mainland.

And, I hope that these lower rates will keep occupancy both higher, and more stable. I don't like being a landlord, and I don't like scrambling to find tenants. I'd much prefer to live, and have my own shop, in Sims that have a stable and familiar set of faces :) This is more important to me than the fairly meager "profits" (pretty pathetic, actually) that the rental business can generate.