Land Business crisis ?

What world would that be? Certainly not on planet Earth.

Hmm on Earth many people have seen their equity wiped out do to the housing bubble deflating. If you are in just the business of speculating it can be a good, but risky investment. However if you are just a single homeowner, you cannot expect any decent return on your investment which would relate to what I was saying about people being upset that the land they bought in SL, their 'investment', being worth less now.

If you just write your land purchase off as an expense and just use and enjoy it without expecting a return, then it will not matter how high or low the market goes. You lose any worth it had in tier anyway.

The housing bubble is a short term risk not a long term one.

wow we finaly actualy agree on something raymond

Real estate may be "safe", but as an investment it tends to simply match inflation over time. So, while it is a good way to shield your capital from inflation, it won't appreciate much beyond that over time. Riskier investments--such as stocks--tend to appreciate at a rate higher than inflation.

Of course, anything can be a good investment for a small chunk of time, and there are times (and places) where real estate is a nifty way to make money.

Very interesting this thread has become.

I don't know if ts is wise to say, but during the bubble from Jan untill May this year I had been able to sell protected mainland ( real beauties ) between L$ 35 and 40 per sq.m ( no joke ).
At one time in Feb. even a parcel for L$ 71 was sold to a rl model from Paris on the condition that I could sell her old land which I could.
On average it took 2 - 4 weeks to sell. At the highest bubble in May it was 5 parcels in one week. Then it slowed down severely as initially posted.

My clients had been various, mostly successful professionals in rl or just people who could easily afford and didn't even discuss price; they just bought.
Allare still very dear friends. I helped them during setting up de land, or problems or complexities they ran into.
Lately a student has bought two of my parcels protected land for L$ 34 per sq.m. using the company creditcard for an assigment in sl. He is allowed to buy sl content with the company creditcard an just buys as he pleases.
In other words everyone is happy, however I do understand that these prices might sound abnormal. Nonetheless my clientelle just bought it and all are still close friends in sl.
Now, I do also understand that protected land has become more available since the start of continent Corsica, consequently ( or just maybe ) effecting prices of protected land.

However, could it also be that professionals have become less interested in SL lately, combined with all I have read in this thread ?
I know for example that some high positioned professionals from my network in rl had been in the game around Christmas holdiays, and I have met a few in sl also. Could it be that this public is spending less users hours because of their busy rl lifes.

In other words, could it be that the public for SL is changing around the year and I would need to adjust my focus, expectations or plan from time to time.
For example, during summer holidays maybe more less adults are inworld with no rl budget to buy land ( but better for the renting market ). After summer holidays more students who are internal at a rl company, more adults again; and during Christmas and the aftermath more professionals who have more time and budget available at that time of year?

Or... is the land business just strong speculative and we just need to take as it is.

Very interesting this thread has become.

I don't know if it is wise to say, but during the bubble from Jan untill May this year I had been able to sell protected mainland ( real beauties ) between L$ 35 and 40 per sq.m ( no joke ).
At one time in Feb. even a parcel for L$ 71 was sold to a rl model from Paris on the condition that I could sell her old land which I could.
At all times I could sell the parcel at 1.3 to 1.5x the price I bought it for.
On average it took 2 - 4 weeks to sell. At the highest bubble in May it was 5 parcels in one week. Then it slowed down severely as initially posted.

My clients had been various, mostly successful professionals in rl or just people who could easily afford and didn't even discuss price; they just bought.
All are still very dear friends, but less online lately. I helped them during setting up de land, or problems or complexities they ran into.
Lately a student has bought two of my parcels protected land for L$ 34 per sq.m. using the company creditcard for an assigment in sl. He is allowed to buy sl content with the company creditcard an just buys as he pleases.
In other words everyone is happy, however I do understand that these prices might sound abnormal. Nonetheless my clientelle just bought it and all are still close friends in sl.
Now, I do also understand that protected land has become more available since the start of continent Corsica, consequently ( or just maybe ) effecting prices of protected land.

However, could it also be that professionals have become less interested in SL lately, combined with all I have read in this thread ?
I know for example that some high positioned professionals from my network in rl had been in the game around Christmas holdiays, and I have met a few in sl also. Could it be that this public is spending less users hours because of their busy rl lifes.

In other words, could it be that the public for SL is changing around the year and we would need to adjust focus, expectations or plan from time to time.
For example, during summer holidays maybe more less adults are inworld with no rl budget to buy land ( but maybe better for the renting market ). After summer holidays more students who are internal at a rl company, more adults again; and during Christmas and the aftermath more professionals who have more time and budget available at that time of year?

Or... is the land business just strong speculative and we just need to take as it is.

Linden will not be released any land for at least the next 7 days to 14 days. After which, they will resume the supply at "no more than 8 regions per day" till end of SEP 2007 which could possibly mean no release of mainland till it's OCT 2007.

Now is the best time to buy land.

In RL you can't just "Add another SIM". Land is a finite quanity. As long as there are people being born, land will, in the long run, continue to increase in value. Not so in SL.

I think thats the thing.... estates aside, the bubble was PRO cost rather than against it. I wasn around then but ive seen lots of posts about land being cheap before the 06 rush, then there was a supply / demand situation whe prices hit the roof and the prices have stayed relitivly constant for the last 8 months. As a RL professional eaning above £30k i STILL wont buy land for what I see to be unrealistic costs, but ultimately if you are selling land at 20L$ sqm and every one around you is selling at 6-10 then you wont sellyour land ad another month of tier is heading your way. This is why i said that its pretty much the way it goes. There are plenty of estate owners out there who are offering an "experience" to thier residents.... with protected envirment or themed sims. Mainland should always be cheaper due to the likes of add farmers and creative freedom, but LL want people to own land becasue thats tier... and they want that land owned by loads of indepentant people at 8$ here and there as thier income is based on maximum return. They certainly would rather that than ONE user recieving massive discounts. Tier is always the point in contest for most players but those that purchased land at what was a temporary price increase are hoping that those days will come again and they wont make a loss, unfortunately unless SL has a MASSIVE relaunch and the users come in droves all signing up for PREMIUM accounts or the Estate runners (didnt want to use Land barons ) buy them up there is going to be large swathes of land available. And to be honest in every sim theres at LEAST 4096 up for sale by somebody at a reasonable price and 1024 worth of 16's selling at 2 - 10k each.

The likes of 10L$ Chung made a killing early from the land shortage, they have teams of people working for them and I would hazzard a guess they were also instrumental in the first land issue but thats gone now. With LL offering premium membership with little or no incentives and land sellers making land so expensive that even seasoned players think twice about it........ you pair that with reduced service and reliability.... the customer base has decreased.....Premium members are heavily on the decrease and LL has floated enough land to counteract the HIGH profit land market in order to entice those who MIGHT BECOME premium into buying land and paying tier. So....
There are so many negatives that effect the willingness for the player to buy the expensive land...... coupled with the many many MANY free accounts... Theres really only 2 ways to go.... either step up... buy a sim and rent it out and try to go that way OR stay where you are pay your tier and hope for the best. Its not the death of SL .... its more the reinvention by LL to try and give everyone a little piece of land.

From what I see........ I would love to see a utopia full of bright ideas and builds but i would have to buy an island to do that.... instead i see fields of add farms and spinning for sale signs all at high prices. I ask anyone in the land business .... if you walked into a store and found the SAME item for 5 -6 times more expensive than the shop next door, the seller offered no "value added" services which item would YOU buy

Hi to all,

The pro and cons for Islands versus Mainland seems to have some deep misconceptions to my opinion in this thread.

Most private estates are far from utopia aswell and elite selected protected areas on the mainland have no lag ( most Islands suffer massive lag, even class 5 ), are owned instead of leasing them ( On Islands endusers always lease ), have no ads and commerce, have no limited access or blocked views at all, have very friendly neigbors, have an open view, no crazy buildings, have no estate owners in between and have speed even when the sim is crowded... And... the Time dilation and SimFPS are mostly drastically more healty ( speed ), specially on the new 5th and 6th continent.
Usuable oceans for long distance play around Islands can also not be found as this is not profitable for estate owners. Around the Mainland there is plenty usable Linden ocean, directly at well selected premium and elite parcels.
Selection on an Island is also to be done VERY critically .

For pros and cons I have anothter thread... Misconceptions seem to be... plenty.

this house was bought for $35,000 in 1966. today it is worth nearly $500,000. this is actually a common occurance irl. and that is nowhere near the rate of inflation nor the rate of wage increases. whoever told you longterm property investment has a poor return...

agreed.

dunno what planet some of these people of from. jeeeez

Man, I should hire you to be my Mainland rental salesperson.

Again...in RL that may be the case since land is a finite quality. But in SL, where new territory can be added in an instant, longterm property investment is a bit more problematic. Couple that with an almost complete lack of zoning regulations, land becomes even *less* attractive over time as the property around it gets developed (depending, of course, on what gets built around the parcel in question).
The closest corallary I can imagine...is if someone built an airport runway right next to that $500,000 house you're talking about - and then began flying in 747's at all hours of the day and night. I'm thinking the value of that property just assumed the physical characteristics of what my Unce Nick called "a real clinker". Just like everything else in real estate...it's all about location, location, location...and that's something almost permanently fluid in SL.

Hard to do, but worth a try? figure it out

I notice most "groups" of people prefer to buy islands so as they can be together. Also mostly just english (only 30-40% of SL residents first language is english) on mainland

Why not promote your mainland sim as a "language sim" for example, advertise in forums of other languages, land for sale in this sim for "language" speaking people.
You could also clump sims together (?) with the same themes also.

If you can figure out a way...............I'm sure there's a market

Time for a little re-inventing sales strategies to stand out for now anyways ???

i realise that is the case in sl.
please notice that the comment i quoted above was in reference to rl.

That is only a common occurance in very select markets. When you look at US national averages, in any 20 year period, the rate of return is better in a stock index fund than it is in real estate.

2007 - 1966 = 41 Years. I calculate that as a 6.7% rate of appreciation compounded annually.

The only correlation here to RL real estate is that waterfront sells better than steep granite.

So the house has had no maintenence expenses at all in all those years? If you were to sell where do you plan to live, a cardboard box? You would need to buy a new home in probably the same market. People seem to leave out what they have had to spend and just concentrate on the end number. If you add up all the expenses of holding the house over the years. The rate of return diminishes quickly. does it not?

Don't go into SL real estate unless you know what you're doing or can afford the lessons you're likely to get. It's nothing like RL real estate.

With RL real estate, in general, they're not making any new land. Less valuable land often becomes more valuable due to development. Over the long term, more land will rise in value than fall, as the world population increases.

With SL, new land is created all the time.

With SL, the cost of actually providing land will keep going down as technology improves: it just represents part of a computer on a network.

In a free market, the law of supply and demand rules. Supply will keep increasing, at lower cost to the land creators. Ergo, the only way to make money with SL land is using a short-term gain strategy, and keeping an eye on the fact that in the long term, property values will tend to fall.

However, LL has a vested interest in not allowing the supply and demand equation to go wildly astray. If land becomes too cheap, much of SL will end up like a wasteland -- the land being so cheap it's not worthwhile to bother maintaining it. If land becomes too expensive, this is a disencentive for new users to join and keep playing SL. So, LL will tend to roll out new land that doesn't upset prices too dramatically in the long run. But they will not be likely to worry too much about whether land barons are making profits at any given time.

Furthermore, LL say they plan to open-source the server. When this happens, land prices are likely to plummet as cheaper servers become available. LL will have far less control over the avatar/land ratio.

This tends to be true when the population is constant, or when there is ample new land to develop. False otherwise.

Also, generalizations like these about real estate are somewhat misleading. As any real-estate investor knows, there are three things to consider: location, location, and location. The generalization ignores these three rules. Frankly, anyone who makes a generalization is an idiot.

The main reasons that real estate is an excellent investment for the typical person are
(a) there are very significant tax deductions
(b) leverage: you earn gains based on the home value, but unless you may have actually invested far less (unless you keep the home until your payments match the home's value)

There are often additional advantages due to relatively low mortgage rates and cost of money issues.

A home is the best investment most middle-class families make. Not because it's the best they COULD have made, but because it's usually a decent investment and so many do it, and because they have an obvious interest in keeping an eye on it.

...would point out that $35,000 appreciating to $500,000 in 41 years amounts to an average annual rate of return of 6.7%; from that figure, you may deduct property taxes, maintenance costs, and any interest paid on a mortgage. To me, it actually does look like that house appreciated at about the rate of inflation, if there is no actual loss.

If we accept the common wisdom that stocks appreciate at an average annual rate of return of 10%, that $35,000 invested in stocks in 1966 would be worth more than $1,742,400 today. Strictly as an investment, then, real estate is clearly an inferior choice: Less than $500k minus maintenance and interest vs. about $1.5M. Granted, if you live in your real estate investment you get extra value--but even then that extra $1M of profit in stocks could be used to rent a maintenance-free domicile. The interest on $35K is enough to rent a home for a year in many places even at today's prices and have something left over to increase the capital.