Becoming my own estate owner

So far, my experiences with land in SL have been ... not encouraging.

I have had the thought that maybe the only way for me to own/rent land would be to acquire a private sim of my own, use the small area that I actually need, and rent out the rest -- as the kind of estate owner I would like to deal with myself.

That means primarily --
a) Zero tolerance of griefing.
b) No truck with the fiction that land buyers own anything -- this would be rental-only.
c) A clear and unambiguous covenant that applies to all residents without fear or favor.

I would be happy to break even on tier -- not looking for profit.
Land use -- residential, light commercial, educational.

Then I had the thought that I might be biting off more than I can chew -- and that I should try to pick the brains of residents with more knowledge and experience (probably everybody reading this).

Some things I am wondering about --
1. What is the condition of the land rental market in SL?
2. What rate of occupancy do estate owners expect?
3. What is a reasonable rental rate per sq m?
4. Is is possible to be an estate owner, and not come in to SL every day?
5. What can go wrong?
6. Am I being stupid?

c) A clear and unambiguous covenant that applies to all residents without fear or favor.

Not always possible.

1. What is the condition of the land rental market in SL?

Not great

2. What rate of occupancy do estate owners expect?

50% or more is decent

3. What is a reasonable rental rate per sq m?

L$2 to 2.5

4. Is is possible to be an estate owner, and not come in to SL every day?

Yes, have trusted managers

5. What can go wrong?

Everything and anything thats never gone wrong in SL to date

6. Am I being stupid?

No

If you do not care to make a profit, then just divide the cost up by however many tenants you wish to have share the island with you and be done with it. It doesn't require a ton of market research. You will end up on the cheap side of estate rentals because you are pricing your lots at cost.

What can go wrong? Lots. You could get bad tenants who put your investment at risk; you could have low or no occupancy (but if you are cheap that is unlikely).

Are you being stupid? Maybe. That's a lot of money to throw into something you're mostly disinterested in doing (being a landlord). And when your interest is up and time comes to sell the island, you could end up screwing X amount of people.

This thread probably will answer many of your questions.

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Hello Peace and welcome to the wonderful world of renting

Just some thoughts on your post:

a) Zero tolerance of griefing.
good luck with that. Griefing comes in many ways. The obvious stoppers are having anything other than resident plots turned off for object entry and build. But you'll still get low level stuff like people harrassing your tenants, using their prim/poseballs, using their house etc as a meeting place (all of which I've had)

b) No truck with the fiction that land buyers own anything -- this would be rental-only.

Too true, but leasing (as I prefer to call 'buying') is separate from 'renting' - you will need to make clear distinction between the two. In my experience, without some major draw, expect more renters than lessees

c) A clear and unambiguous covenant that applies to all residents without fear or favor.

Others have already commented. All I would say is that there are plenty of gray areas in whatever anyone writes, so leave yourself a loophole - "subject to the owner's final decision" or some such

I would be happy to break even on tier -- not looking for profit.
Land use -- residential, light commercial, educational.

OK, assuming no local taxation, you have to have an income of $295 a month. Reckon on about 50-60% occupancy, and do the math on prims allowed vs cost. Bear in mind you will have to factor in landscaping prims etc which is an overhead. Please avoid the 16 etc squares surrounded by narrow canals as plot edges - there's thousands of such estates like that.

Then I had the thought that I might be biting off more than I can chew -- and that I should try to pick the brains of residents with more knowledge and experience (probably everybody reading this).

Some things I am wondering about --
1. What is the condition of the land rental market in SL?
Hard. There are peaks and troughs of course - I'm experiencing a peak at the moment, but I know very well there'll be a downside at some point. So ensure you keep a tier reserve - I work on three month's worth

2. What rate of occupancy do estate owners expect?

Antthing over 60-70% is good; price accordingly but recognise that renters tend to drop out all the time

3. What is a reasonable rental rate per sq m?

I work on L$ per prim, but that's because of the way our sims are set up

4. Is is possible to be an estate owner, and not come in to SL every day?

Yes, but you will still spend a lot of time servicing your tenants' needs, marketing, landscaping etc. My partner and I spend a good 60-70% of opur time sorting out residents' issues

5. What can go wrong?
lol Just about everthing

6. Am I being stupid?
No.

I'll be honest her as possible about some potential pitfalls you may be setting yourself up for. Most notably " break even on tier ". While it might sound like a great thing to do, you'll find most failed sim management senarios have poor fee structure as its major fault and ultimate cause of demise. I buy distressed sims quite often, you'll have to set a goal occupancy and set you land fees to that, if you do it properly you'll fine your land fees to the sims residents arent nearly as low as you would first think

For ex. 295USD per month divided by 16x 4096 meter plots would be about 18.50 USD per month per 4096 plot, at 100% occupancy you will never recover a dime on your initial investment so you might as well consider throwing away 1675 USD to start, its hard to have 100% occupancy, so your mostlikely going to lose money every month, maybe upto 20% of your LL tier cost (40USD).

A smart sim owner will realize the proper amount to charge for land on a monthly basis to make AND keep the sim sustainable. You'll quickly come to realize that your enjoyment in recreation in SL will diminish as your responsibilities to your residents grow, this will no doubt cause you stress do to the lack of compensation for your time and efforts. in turn making the sim less of a fun thing and more of a chore.

Before you purchase a sim make sure to consider all your possible senarios and what they could evolve into before you decide on setting a pricing for your land fee's, and even more importantly your should do a double check on your fortitude as you may find yourself in a position of constantly losing money on something that has turned from a fun project into a job, sim ownership isnt for everyone, for every 10 sims LL sells theres probably a couple on the resell market that are going to take a loss because of poor financial management

Peace, it sounds like a good plan.

Be prepared to have to maintain the tier on your own for a long time, until you become established and people begin to trust you and rent from you.

Best of luck!

As someone who just entered the rental market with 1/4 a sim to rent out, I can say you need to landscape, have some decent houses to display and rent with tinting windows etc, I can reccommend the HippoRent system, or you can go to someone like CC Rentals and they will look after the rentboxes and advertising for tennants.
You will have to spend $3k on an ad to get it noticed in search, tennants are scarce, the market value seems to be $2 per prim per meter, but I had to drop to $1.50 to get half my properties filled and even then it took weeks and they filled over the long weekend. A lot of renters don't understand the relationship between prims and land plot size.
It's work being a landlord, tennants need a little looking after to get set up, but most seem good friendly people.
Advertising is your biggest problem, getting feet onto your land to look at it, then presentation is important to and preparation and patience. Don't be frugal and try build everything yourself, there are som good prefab houses and shops around that ad that professionalism to your estate. Also put space between plots so there is chat buffering distance. Communal features can be good too.
I started aiming at 50/50 residential / commercial and am at about 70/30 now, also offer different sized plots or options to increase /decrease their size later. About 1600m/366 prims seems to work for me, apparently 1024m is most common landsize.
Breaking even is the initial aim, when you hit a winning formula think of making something from it, but a living? Hmm you would work full time at it for minimum wage I suspect and the market is flooded with land.

When you guys talk $L per sq/m. Is this figure for a week or a month? for a 1024 plot, figuring 2L sqm - would that be 1024/wk or 1024/month?

That would be approx 1536/month 1024 x 1.5, based on what has been said, however I would guess that renting a 1024 on mainland you would expect to get 2048 to 2560 per month.

There are lots of different set ups, if you have private land to rent the calculations can be different to mainland.