Are the land speculators really making money?

I've been playing SL daily for close to four months. I prefer living and being on the mainland.

It appears that the recent low cost of land has created a sort of feeding frenzy on the part of the speculators. Lately, whenever I see a nice piece of land that is more than 1024 m2 that is affordable it is quickly bought up then immediately broken into smaller pieces and put back on the market, often with a hideous strip of 16 m2 ad spots lining the road. Some formerly nice sims are really being degraded and have become ugly.

Yet I've seen the same blocks of 512 m2 land sitting unsold for months. Or they are sold to others who put the same property back on the market for a slightly higher price., and then they still sit unsold.

My question is: with so much unsold land sitting around are the buyers really making money doing this?

Some do, but it all depends on their tier costs as it may take a while for them to sell it. I'm 10,000 sqm from my tier cap, so it wouldn't hurt me any to buy more land and sit on it if needed, but for those at the limit, they will lose money each month until it is sold.

MallardZ, you are addressing several issues in your post, so as someone you'd likely title a land speculator, I'd like to address each individually. Firstly, yes, we are still making money. Some less, some more. Depends on the business model you ascribe to in SL. Not counting the pre-bot haydays of Fall/Winter 2006, I'm making a bit more than I was a month or two ago. From my perspective, LL's gambling and VAT bombshells worked out well, as those who sold weren't selling cheap granit land but land that was worth something. I know that sounds harsh, but it worked out well. Conversely, the dumping of cheap land by LL hurt my business, as I didn't dare buy anything for nearly a month. I only lost about L$400 on the last crash, and my rental land pays my tier, but the inactivity nearly drove me batty. My business model made those realities, not the market so much.

As for those 16m2 ad spots, those are the result of adfarmers and they are not about ads at all. That is a myth. You see ads, but VERY few SL business really uses adfarm ads. That would be like a cigarette company making kids' toys today. The social backlash in SL against adfarms would hurt them more than the ads would make them a recognizable brand. Reputation is still important here. No, adfarms are extortion parcels. The adfarmer is saying 'Pay me L$5,000 and get your view back'. You'll notice most ad lots are marked to sell at exhorbanent prices. This isn't a mistake.

As for the 512's that sit, that is either somoene with alot of tier who can hold onto land for months till it sells or baby barrons. People who come into SL often hear about the real estate business. They look around, see what is being sold at what price, and decide to try their hand. Often they don't understand that what is pretty is not always what is valuable, and they loose out. The land sits, then a as tier approaches they are forced to drop their price, even below what they paid. This is why a business model in SL land sales is crucial and must be responsive to market conditions.

16M spots are blackmail. Build something nice next to it and up they pop with their adult friend finder ads to ruin your build.

I used to make a bit of money by buying up cheap 16m plots and amalgamating them into larger ones - mainly 32's and 64's. Seems to go against the perceived wisdom but it worked.

Until landbots came in, anyone could hammer the search listings and occassionally get a bargain. It was time consuming but you could cover your tier with a few underpriced finds a month.

Now a small handful of landbot runners get all the cheaper, more profitable plots the instant they are listed (and L$1 mistakes too, but I won't go into that right now). They chased hundreds of people out of business. A spokesperson for LL said on the blog that they were looking into taking action against the bots but they lied and never did.

You can still make a few dollars a month, but without that occassional lucrative score, it's not worth the time. The smart land barons have moved on to rentals or other ways of covering their tier. The smartest land barons run landbots.

I would not go that far...

I'm glad you think rental barons are smart, I suppose I'd take that as a compliment (if a few sims makes a baron).

I think you're making the mistaken assumption that everybody goes and figures out what makes the most money and just does that as their SL profession. In my opinion, land speculating (with a bot or however you want to do it) doesn't offer any creative outlet for me, and doesn't do much to make people happy or make SL a better place, so I have no interest in doing it. Many people may disagree with that: I'm not here to argue the point. But being a rental baron vs. a land speculator has nothing to do with how smart I am.

There's good in everything, if one one goes looking for it.

I never thought I'd have a good word to say about landbots, but you've just crystallised a thought I've had before.

Buying a plot, putting a nice build on it and selling on is a useful service for people who don't have the skill or energy to do a nice build for themselves.
Flipping plots without adding anything of value is parasitical activity. It simply increases cost for end users, nothing more.

If a "hundreds" of bottom-feeding parasites have been driven out of business by a "handful" of larger parasites, then that's not a bad thing. It lowers the parasite count. It sends the would_have_been_parasites off to turn a buck in what hopefully will be a more constructive enterprise.


Important note!!!!!! :-
Because LL do not sell new mainland other than in whole sims, I do exclude those 'first level' who buy the sims and sell on from my 'parasite award'.
I also understand that the 'second level' dealers who buy big chunks of sim from the 'first level' are assisting the cash flow of the 'first level'.
Something has to happen in order to pare the initial whole sim down to end user parcels. It would be unrealistic to expect the 'first level' to eat tier until such time as every metre gets bought up by end users.
Dealers at 'third level', flipping end-user sized plots could be argued to be assisting the process in the same way, but ONLY if they are not beating actual end users in a race to buy at a reasonable price.
Once we get down to the level where the plots are being bought purely for resale by minnows, we are definitely into parasite territory.

Now some may argue that the minnows perform a service, in that they might be buying tier that someone desperately needs to dump at a giveaway price before billing date.
The answer to that is that the bots perform that 'service' with great efficiency and predictability, and guarantee a successful and instant tier reduction.

However, as for the 'third level' above, if the bots are beating genuine end users to reasonably priced plots, then that's not good.