Sl Land

well this is true.

Also Sellers selling something of such value have responsibilities to give a full inventory of their commitments to the buyer.

This problem is magnified every time the land has been "resold" to someone else and appreciated in cost. It's out of control. I wouldn't want responsibility for that, not as a buyer. Buyer beware - force the seller to evict unless you're going to keep the status quo covenant.

plus you'd want a hefty discount - you will never get paid for that land unless they abandon it, or you evict them and you sell it.

Buying an island with covenant tenants on it sounds like too much hastle to me.

Unless you were a crook - then it would be an awesome way to make a profit ...

Demand a discount because the covenant land is already purchased , then evict everyone anyhow.

I'm sorry, but I can't agree, just because there's no possible way for the buyer to really know for sure all the seller's outstanding obligations to current tenants. Much the same problem arose with banking: given the nature of SL "accounting" we have absolutely no way of knowing what assets or liabilities are associated with a business enterprise, even if they claim to be "transparent." (They may be transparent. Or not. It is completely unknowable.)

Given the mechanics, we can't shift any of the responsibility from the seller to the buyer. Say I sell you a used island, and show you the Covenant: no up-front fees and tenancy-at-will. And I tell you everybody's fees are due next Tuesday, nobody's paid in advance. Should you really believe me?

On the larger topic: I think the underlying problem is one of "loose labels." Estates may have prudent financial reasons to charge an up-front fee (Des explained this in at least one other thread), and the buyer benefits by having a solvent Estate owner. (The reason this isn't equally applicable on the Mainland rentals elludes me, but never mind.) The problem is that the up-front fee is termed the price for a land "Sale", when it is nothing of the kind. And "Covenant" implies a legal agreement, when again, it is in no way binding on the Estate owner.

IMO

It's the seller's responsibility to make clear any and all obligations & liabilities associated with the sim to a potential buyer before a sale is made.

If a seller fails to do this, and the buyer then clears the sim upon purchase, I see the seller as being at fault and any compensation to residents evicted should be made by the seller.

If the buyer clears the sim having been made aware of the obligations and liabilities, it is then he/she who is at fault, and it is then the buyer's responsibility to compensate the evicted residents.

Then change the name of the GAME to World of Scamcraft and be done with it.

For some people it's a game, for others it's not. It really is that simple.

I'm going to buy a island with plots with nice strips of 16m land in between, sell it to the unwary and when its all sold fill those 16m strips with spinning pr0n ads and such like to see how quickly they will sell the land back to me for half the price or better still just leave!

ROFL! Maybe ESC could design a new inworld game called that, now that Legend is over!

watch it, someone may draft you into a forum clique, you keep up with that funny stuff.

When you sell your house you have to clear on liens I believe.

So I can see this.

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I don't see the current system working long term. As the number of islands grow, the problem will become difficult to control.

Yeah, seriously, I need more people on my waiting list just like I need a boot to the head.

I've shut down all advertising, and *still* the list is weeks long, even after opening 1/4 million sq. meters in the last few months. And the wait is climbing fast; it's high season. No joke, I could charge triple for a new region and it would still prebook instantaneously (though of course I would never do this).

And once the land goes from snow to its spring meadow look, the high end land market will go crazier than a toy poodle.

* * * * *

It's painful to watch land baron wannabe's flame out. They usually leave a lot of destruction in their wake.

Most start thinking it's 'cool' to rent a region, but after a few months at 20 hours a week effort, which results in less than 200 USD a month, well, who wants to work their tail off for two bucks an hour? It stops being fun fast, the first time there is an adversarial relationship with even one resident.

I'd say 80-90% of those who get started have *no* idea how un-fun it can get, or how fast that can happen. And a lot of times you may be dealing with a 20 year old who 'just thought it would be cool' and is both a financial and social disaster.

* * * * *

As for scamming... no, not everyone is a scammer. In terms of hours invested per return, if anyone's getting scammed, it's me. By a longshot. What little I charge in up-front fees is a laugh, compared to long term support.

Here's how bad it gets. Imagine someone pays 23 USD for a bit of land, drops less than 4 USD of tier payments on it, then ties up my evening for an hour, four days in a row.

I *lose* 3.26 USD on initial payment for the smallest bit of land, and in a case like the above I lose literally half a work day 'helping.' Which is often veeery basic info (what prims are, &c), laced with misplaced anger and interspersed with ten minute waits while the resident chatters on in IM to their lover, with me left standing there.

All that just to break even. Don't get me started on what it takes to get just slightly ahead in this biz. I spend, on average, literally two hours with new folk - one hour explaining the parcel maps, risks and so forth, and another hour helping with move-in. Multiply by several hundred residents. Yeah, it is frequently that bad.

* * * * *

As for land barons that have just spent 1675 USD and pray they get enough people to float 295 USD/mo tier just by flat-rate renting... well... good luck to them.

I doesn't surprise me at all when land barons on such a weak biz model have to sell out. In fact, for anyone without wickedly good business skills, the 'nothing up front' biz model is the fastest trip to insolvency there is on the grid. Remember, you started at negative 1675 USD, and a sim doesn't even balance its costs until it's well over half full.

Something to think about.

*cough* I seem to remember paying nothing up front for my Caledon plot.

Apples and oranges, you are pointing out people who are actually Committing what is, In most Jurisdictions, an indictable offence (Setting up, and operating a pyramid scheme) and Suggesting LL has no right or Obligation to STOP people from using thier platform to Break the Law.

As the Lawyers would say "Assumes facts Not in Evidence". You have someone who legally sold land, and someone who legally bought Land and No Evidence what-so-ever that any form of Collusion took place. There is certainly Nothing in the Original post to indicate it. I see someone who is angry, and Disillusioned that thier Plans were derailed, But there is nothing at all to even suggest there was a conspiracy. Lets not start making up juicey details when the story starts to get Dull shall we?

Angel.

Actually, let's look at the concept of up-front fees.

What is the point of paying a fee to buy mainland? Well, it becomes an asset. You are not going to lose that. You will be able to sell it on, perhaps not at the price that you bought it at, but perhaps for more. Either way, it is not money disappearing into nowhere.

What is the point of paying a fee to buy island property? That depends on whether it becomes an asset or not. If the person is a reliable, regular sort who is going to remain around for a while, then yes, it is an asset; perhaps it will depend on how much they develop their sim, how much demand there is afterwards and so on, but assuming that they don't ban reselling plots, you possess that as an asset.

(If they do ban that, then divide the upfront cost by the amount of time you imagine spending there. Then double it, because you have almost certainly misjudged how long you are going to spend there. Then add that to the monthly rate and see whether that seems reasonable.)

Are they a new, "i just bought a sim lol" sort of landlord, with no proof of continued interest in SL and no indication of particular funding? Your investment is worth very little then, and is basically money down the drain. I would quarter its expected return value at the very least. I am sorry to be blunt and mean no offence to the honest new sim renters out there, but that is what things are like. So, take 3/4 of your purchase price, and add the amount on to your monthly rent, as above.

First of all, what you're describing is not so different from -every- mainland landlord out there. We all paid for our land probably much more than US$1675/sim. By definition, we do flat-rate renting and ask nothing up-front from a tenant. Like any business, some succeed, some prosper, and yes, some fail. But even in failure, our asset holds full resell value, making the investment and risk worth it for us, and the risk very low (maybe what, 2 months rent at most) for tenants. Personally, I think thats a very good business model. Raymond might agree

With complete respects, you design some lovely sims, but I do not see that as any reason to expect residents to help you recoup the 1675 purchase cost immediately and I would warn people away from your place just as I would warn them away from buying on Dreamland or any other private estate that "sells" parcels up front. The fact that you -can- get people to help you recoup the island purchase cost is something I see as not much different as the people that could convince others to invest their money with them. There is no guarantee of return, there is only level of risk as a tenant who would have no recourse if Caledon suddenly closed for whatever reason.

I think you are probably the safest bet of all private estates out there. I feel like you are the type that would make arragements for any contingency. But you are still a higher risk than even the worst mainland landlord because there are no up-front costs.

Earlier in the thread I called up-front "sales" of parcels on estates a scam... it is. Not only do estates recoup the purchase price of their island by "selling" parcels, but then they often sell those entire islands to a new owner for nearly that same cost again... double-dipping. In fact, my suspicion is that for many, this IS their business plan - to recoup the costs, have tenants cover their teir, and then sell the island later, leaving the tenants who "own" parcels to lick their wounds. I doubt you could convince me that -any- of the good estate owners listed in this thread would do any different if the need arised. The "scam" is that the risks are not layed out for the tenants. Its a good business strategy for the owners ... just like "banks" were. And so very bad for the customers

Ok look if I'm gonna get told off for suggesting scams go on then so are you It's not a scam until the scam is enacted. There's potential for a scam. However the bigger the landlord the less likely they are to scam, they have too much invested.

I've sold parcels on my estate and to be honest, I've stopped doing it. I don't like the associated hassle of outstanding tier on a parcel they've paid for. The end result has been that I've paid them myself for the parcel so I don't have that guilt hanging over me and to avoid that now it's all straight rentals bar the tenants who are left who paid for parcels, the majority of the place is now straight rental.

I made no such suggestion, I'm asking for LL to intervene more in resident to resident disputes, not ignore them.



I don't buy the "ignorance is bliss" argument. If you're buying an estate you should damn well know that estate scams go on, you should be checking every little detail of what you're buying and if you want a blank estate, heck buy a blank island.

If you're buying an occupied island you should find out by asking for a list of rental deals, who owns what plots and whether they paid for them or not. If you don't do that, then I'm sorry, you are very much part of the problem.

I have to agree with Sammy. I've been a mainland landlord for almost a year now, even though I'm allowing that business to fade away as people leave. I had 58 skyboxes up - often full and often one or two vacancies due to people leaving. Here's where I agree with Desmond - it's a lot of work for the small return when you calculate it in RL hours. As Sammy said, it's no different to being in the same business on mainland. The amount of work is entirely down to the person whose business it is. S/he can choose to get bigger and have more work, or s/he can choose to keep the size such that the work is comfortably managable.

I see no justification to recoup the cost of an island by selling it to people UNLESS the landlord accepts that s/he no longer owns the land, and isn't free to keep the money if the island is sold. The idea that it's a lot of work isn't justification in my book.

It is a lot of work and you have to enjoy it as a hobby if you are going to put the hours in (it helps that I have a stellar sim manager, because I'm not online very much). And as far as recouping my investment, I don't plan on doing that until I sell my sim. This is risky, because LL could screw up the land market at a moment's notice.

I'll second that Mine was just a hobby that paid me RL pocket money. It would still be going strong if something else hadn't come along that's a better hobby

For Point #1, we get back to TOS where they specificly state that they will Not get involved in Disputes. The problem was, you Sited something that was Not specificly a Client Dispute, though many Rose from it. It was, for LL a legal, and Civil liability issue, and that was the Primary reason for thier BANNING, Not regulating or adjudicating this Practice. Setting up, and operating a mediation system would be a nightmare LL simply does Not want to become involved in, therefore they stress to the players They are on thier own and should use a Little Common Sense. Banning the Practice of renting Property is not even on the table. Unlike banking The Land rental market is Deeply integral to the SL Economy. Remove the right to rent out Space, and you Destroy a Massive portion of the SL Business community (How many Sims does Anshe Own? And her rental practices have always been above Board).

As for your second point, the realestate market in SL is So fast paced that there is rarely Time for buyers to make the enquiries you Suggest Unless the situation involves a private sale. IF it is a private sale, then yes, i agree the Buyer should make the proper enquiries. In ALL cases public and private i feel it is the Ethical responsibility of the SELLER to Post ALL Current land conditions and liabilities for the foreknowledge of any potential buyer. But again, If Wishes were horses, beggers would Ride. Even Honest Land vendors would tend to Miss this Point.

As to the land it's Self, I think the only REAL solution here is a new system whereby, when a Sim owner subdivides, and Sells Portions of his land it shouls be Similar to the mainland Subdevisions. Once sold it is No Longer in the Control of the original Island Sim Owner. That allows him to sell what parts of the sim he Still owns while Not removing the rights of the people Purchasing Subdevisions. Given however the difference in set-up between mainland, and island sims the programming necesary to Manage this would be problematic at best.

What we are left with is the situation As it Stands. "Caveat Emptor" Let the buyer beware. Knowing land Scams exist BUYERS should seriously consider the situation before they enter into these sorts of "Gentlemans Agreements" without any Foreknowledge as to whether they are actually Dealing with a Gentleman. If you want to get down to specific persons, I would Never "Purchase' land in this fashion, because i am already well aware of the Risks, and even if i Knew the vendor for some time, I Know there are Miriade reasons that do NOT involve Malfeasance, why a Piece of land may be lost, or have to be sold rapidly and Cost me My investment. I would be Content with renting from them, and letting them apply the rent to tier if they chose, and i would Understand that the situation has no Guarantees.

If you want to own a Small plot, Buy Mainland, If you get land on an island sim from another client, Understand that no matter what the wording of the Deal, you are ONLY renting on a month to month basis and have No more rights than anyone renting anywhere in SL.

Angel

Would this practice, if it became widely accepted, be workable?

As a condition of sale, the buyer of an Estate sim requires that the seller publicly post a promise to refund any renter's full up-front fees and advance rent within (say) one week of the sale, and at the same time the buyer must post any changes to the "covenant" (which are also part of the terms of the sale).

The idea is that the seller then has an incentive to make sure the buyer is reputable and won't immediately screw-over the tenants (otherwise the seller will have to part with lots of those refunds). And the buyer has a similar incentive, otherwise the seller will have to inflate the sales price to compensate for all those anticipated refunds.

Now, this doesn't prevent scams: the seller could always renege on the promise, or the buyer could just change--or simply ignore--the new covenant. But it seems to me an "in good faith" way to protect sitting tenants, to the extent such a thing is possible.

And of course there could be no requirement that every sim sales transaction follow the practice. But it would be a way to build the reputations of buyers and sellers who follow it.

(Or is this just a lame idea anyway?)

grin... you didn't. The original Caledon sim didn't have up-front fees.

The original 1250 USD spent on the region was largely given away, insofar as most people informally sold their rental rights when they moved on (though not everyone has left the original sim).

Yes, it was very much like passing out over 1000 USD to random people on the internet. I learned the hard way. You had use of land in Victoria City once; that did come with a fee of $L 4/m.

* * * * *



The risk is still *very much* there without up-front costs. In fact, it can be far worse. The risk is just distributed differently.

Here's some math regarding private estate regions without up-front fees, to prove it.


Example #1: Fully occupied 65536m region at $L 500/wk per 1024m, with only 468 prims of infrastructure, not one open spot ever, booked from the splitting instant of region's arrival on the grid:

62 plots *1024m * $L 500 = $L 31000 weekly

$L 31000 weekly * 4.333 wk/mo = $L 134323 monthly

$L 134323 / 265 $L/USD * .965 (LindeX service fee) = 489.13 USD

489.13 USD - 295 USD = 194.13 USD/mo

Time to recoup 1675 USD for the region: 1675 / 194.13 = 8.63 months.


Example #2: Something Realistic. Say the region has 936 infrastructure prims, leaving the equivalent of 60 1024m lots. Let's presume 90% occupancy - the equivalent of 58 occupied 1024m lots - veeery typical.

Running the math on that...

58 * $L 500 / wk * 4.333 wk/mo = $L 125657/ mo

$L 125657 / mo / 265 $L/USD * .965 (LindeX service fee) = 457.58 USD/mo

profit: 457.58 - 295 = 162.58 USD/mo

Also, presume it took a month to set up and get tenants in.

So the time to recoup 1675 USD: 1675/162.58 = 10.3 months.

Add 1 month for setup, and it's 11.3 months recover initial region price.

Saving up an extra month's tier just in case: 295/162.58 = 1.81 months.

Which means it takes over a year for this business model to be in reasonably safe territory, even while pretending the land baron's time is worth absolutely nothing.

Contrast that to 0-3 months for a region that has up-front fees associated with it, depending on $L rates asked.


What am I trying to show here?

Some scenarios:

a) (no up-front fees) The region owner doesn't grow the estate and ends up getting stuck putting in a lot of time for 160-200 USD/month. This is unsustainable the instant it is no longer fun. Incidentally, even if they charged fees, small estates are all subject to the 'simply not worth it' issue. Look for passionate hobbyists who are immune to drama nonsense at the small estate level.

b) (no up-front fees) The region owner tries to grow by faster than one region every two years, but is so thinly capitalised that their estate has no reserves unless they can pay 295/mo per region in a pinch. (10 regions: 2950/mo in a pinch). This case is dangerously unstable, and you are betting that you are either renting from a millionaire, or nothing will ever, ever go wrong. Your risk is minimised in one way only: gettin' outta Dodge while the gettin' is good.

c) The region owner goes for the super-premium market, charges fees up front, and has reserves on hand. It's case (b), except that there are much, much deeper reserves and most regions are paid off in a few months. The risk to anyone who stays is far, far, far less because there are reserves backing the regions. A caveat: there's no real way of knowing if the region owner didn't just foolishly blow the reserves or 'invested' in WTF bonds or some other nonsense. I'd love to have a way to prove that I haven't - something I'm looking into. This is the achilles heel, even with my business model. If our service provider had an "X months untransferable tier reserve on hand" function, that would work perfectly.

d) People are told they are 'buying' land on a private estate, or otherwise led to believe they have more control over it than they actually do. Or are told they are free of risk based on another resident's situation. This is scam territory, regardless of category. Words to really, really be watchful of: "buy", "own", "purchase", "sale" or anything like that.

* * * * *

Estates are fairly transparent. You can put in tier fees + occupancy rate and get a good idea, fast, of how rapidly an estate can build $L capital and grow safely.

The one unknowable is if the estate owner foolishly cashes out too much tier reserve, or is thinly capitalised, or starts griefing people at the Welcome Area or suchlike and gets himself banned. Which if an estate is doing well, that's like killing a goose that lays golden eggs.

My equations above are for discussion, dispute, or what-have-you; in the form of a Resident Answer for anyone who can follow it.

Don't take my word for any of this, check it out yourself. My logic is laid out above.

* * * * *

Qie, even with a strict 'no refund' guy like me, if someone IM's me 20 minutes later about some land and says they changed their mind for whatever reason, yeah, I'm not going to stick it to them.

But it's like Angelique said: there's really no way (at this time) to know who you are dealing with, or who will honour what, and when.

It cuts both ways. People toss a tantrum like a two year old on a land baron's sim (this happens with regularity), harm business and drive off other tenants, and generally there's an expectation that the land baron will stay cool. That's just how it is. We absorb all this stuff, daily. Yep, even me too with Caledon.

We're still a bit in the Wild West - reputation counts for a lot. Someday that will end, I have no doubt - the 'real world' will descend, and starting up in SL will be every bit as hard as the 'real world'. I've started real world businesses before (I still have mine) and believe me, SL is a cakewalk by comparison. We really are on the frontier.

I'd like to ask, now that you have recouped your island purchase price... what is your plan in the event Caledon needs to close? I assume you would sell island ownership to someone else, thereby doubly recouping that initial island purchase. And no matter what is said, the new owner has complete authority and no obligation.

What you're explaining is a rationale as to why its good strategy for yourself and future growth to charge up-front if you can get away with it, but you are not explaining why a tenant, if completely educated on the details of island purchases and risk, would ever want to subsidize your growth at risk only to themselves.

Hi Desmond

I did some very quick calcs (although I used L$/prim rather than per sqm) and I agree with the numbers - I am sure this is a great weight off your mind LOL

To all Island owners - a question - perhaps best done as a separate topic:

Consider and discuss the two scenarios..

a) Linden double the purchase cost of an island and halve the monthly tier

b) Tier is doubled and purchase cost halved.

I know this is unlikely at this level, but change is always with us and the 2:1 change takes it out of the "we'll muddle through" range.

LL can of course do what the hell they like!