Sl Land

RE: the first question: my plan in the event Caledon needs to close.

The deciding factor would be: why would it need to close? Let's address that seriously. Some background for you, first.

I hate to be so bluntly arrogant about it (but remember you did ask!) Caledon has some of the hottest real estate on the grid. Let me put that in real numbers for you. Use of land in downtown Victoria City has been exchanged for over $L 40/m when changing hands privately. Some, closer to $L 50/m. It's been this way since opening day, over a year ago. My up-front fee to the founders was $L 4/m. Which didn't even come close to covering my sim cost. I've personally never made $L 40/m off anything, anywhere. Don't plan to.

But here's the point, if Caledon needs to close due to occupancy or tier problems, a few other places are likely to close before I do. We aren't exactly the canary in the coalmine here.

But let's say, for whatever reason, I was having occupancy problems. As much as I would hate to do it, I might have to move some folks onto regions I'd keep, and sell off or abandon some regions.

"Abandon!?" you say? How can you say that? Well, let me ask you this: by the time Caledon is having occupancy problems, what do you think the state of the grid, and the resale value of a region would be?

Say I did get $L for a let-go region, it would go to one place: tier reserve. Occupancy issues are a tier reserve crisis. Existing residents would get land for land (remember, occupancy issues means there is space available).

Suppose I had some RL reason for leaving the grid. Well, it would depend upon what the reason was. Let's say... disability or death ( Desmond = X_X !) The Company would have no choice but to leave Desmond's stuff to my next of kin. I have a daughter on the teen grid. Say I survive for just another few years - do you really think she would give up 40-50k USD annually because it's too hard to answer some IM's and do occasional land transfers?). I don't speak of her much here, because a responsible parent shouldn't be doing too much of that. She's a teen, I respect her childhood, and she doesn't mention who her dad is. Anyway, that's probably what would happen there.

Finally, let's talk about 'selling' Caledon. As much as I try not to be too tied into what Caledon is, it's kind of like selling a piece of my personality. Think: Sgt Pepper's Lonely Heart's Club Band - but with Green Day or Britney Spears, not the Beatles. It just. doesn't. fly. Who could possibly buy it and succeed?

Let's consider what Caledon would cost, too. Right now my tier is 5980 a month (71760 USD annually). I've got over three months reserve tier. I won't even *begin* to talk about P/E ratio, for those who understand such things - it would be embarrassing. Know anyone that could casually afford the place? There aren't many.

'What happens to Caledon' is largely dependent upon what sort of disaster could befall it.

Before taxes, if things stay pretty much as they are, Caledon could reasonably make about 1/4 million USD over the next five years or so, above and beyond tier (yes I pay taxes big time). So... if you were in my shoes, would you sell it?

* * * * *

RE: Second question, or why a tenant would want to 'subsidise my growth' at 'risk only to themselves'.

All good business relies on both parties getting their needs met. I'm sufficiently financially motivated to keep Caledon healthy, stable and super-premium.

Let's look at what tier costs. Take 4096m of standard prim land - a bit more than what most people have, but let's start there. Let's presume 30 USD/mo tier for it, very typical for private estates.

One year costs 30 x 12, or 360 USD.
Two years: 760 USD.
Three years: 1080 USD.

Say that the land had an up-front fee of $L 6/m, or about 93 USD.

If you are looking at long term risk, that 93 USD rapidly pales in comparison to tier, and keeps getting paler. And the longer you stay, the more you are betting that the estate owner stays solvent, and has some clue about business.

So if you are looking to get in and get out fast, the right strategy for a tenant is to go with someone that has no fees up front, and even more advantageously, a refund policy. The big risks here are that the estate owner might be thinly capitalised and default (I showed the numbers in an above post), or that the estate owner might get fed up ("all this drama for a few hundred a month? I'm outta here!"

A tenant looking to *stay* somewhere should find an estate owner who is:

a) solvent and has high occupancy,
b) not thinly capitalised, a 'financial glass house'
c) has clear financial motivation to remain in business
d) has a track record of not screwing up financially or in dubious investments.

An inexpensive estate fails (b) unless it has been around 3-4 years, or the owner is independently wealthy in first life. It also fails (c) unless they have lots and lots of regions.

This strongly favours larger, conservative estates that charge a bit more, for tenants wanting to use their land for a long time.

* * * * *

At the end of the day, there is no free lunch.

Land barony at low or no up-front fees *can* be safely done over a very, very long timescale. But as shown by the numbers, it typically takes a land baron one year to recoup sim cost and safe tier reserve margin, all the while valuing their time at exactly zero.

After that you are relying on their continued passion in helping you, for the return of about 150-200 USD per month per region that they have. In the case of a 'discount' scenario, returns might be more like 80-100 USD/mo.

As an 'investment' or 'second job' this is *very*questionable in terms of both time and finance, and in fact, you'll notice that some of the quality people who did discount land barony in the past took a gentlemanly exit.

* * * * *

Sparks,

RE: region cost doubled and tier reduced: this would lock in everyone with existing regions, and be devastating to the grid economy. Only those with 3500 USD burning a hole in their pocket could afford a region at that point. Existing land barons would make tons of money, due to almost all competition killed off. A few rich entrepreneurs might go for it, in a world where it would take two to four years for anybody to pay off a region's initial cost. You would need 50-100 regions to even try, and get any sustainable return.

RE: region cost halved and tier doubled: I think this would kill the platform within 90 days. It's way outside the price elasticity boundaries of virtual land, and I think people would rather play checkers naked outside in a blizzard, than pay that.

Right. Well, non-transferable *from the land*--so that if the sim were sold, the tier reserve would stay with it, protecting the tenants' interests under new ownership.Usually when I don't fully understand one of your posts, Des, it will eventually submit to repeated intense concentration. But so far, I'm stumped with this one, enough to make me suspect that you were responding to something other than what I'd intended to express--which may be quite different from whatever the hell I actually said.

What I was proposing as a strawman was intended for much smaller-scale operations than Caledon. Somebody with a few occupied sims who just wants to get out of the business without screwing the tenants. Or a buyer who'd like to keep the sitting tenants on a few sims s/he's buying. What is the honorable way for those parties to transact the transfer of property, given that the buyer isn't known to the tenants, and perhaps changes to the covenant will apply?

One approach that seems "theoretically fair" would be for the seller at time of sale to automatically refund all the tenants' up-front fees and any rent payed in advance, giving the tenants the option to again pay their up-front fees to the new Estate owner. But this isn't ideal: the tenants all must *do* something or they lose their places, the seller has to eat all the refunds (and presumably raise the sale price to cover it), and the buyer starts out without tenants, only hoping they'll decide to pay him the refund they get from the seller.

My "hare-brained" proposal was intended to give everyone pretty much the same rights as the above "theoretically fair" approach, but retain the inertia of status quo, to every party's benefit.

And all of this is really motivated by Ciaran's assertion that the buyer shares responsibility for fair-dealing with the previous owner's tenants, and my hang-up about the impossibility of the buyer knowing for sure what's actually fair. As I noted, there's still no mechanism for the parties to know they can trust each other, but the intent was to at least make evident who was at fault if somebody reneged, and to provide some mechanism by which the value of a renter's up-front fee could be preserved through a transfer of Estate ownership.

None of which is to claim the idea isn't completely loopy, only to explain that I don't understand a response to it, if one was intended.

re: #151.

/me (once again) kneels at Desmond's feet.

If you ever do X_X, Des, the scientists of Caledon better preserve your brain for posterity. What an intellect.

Just to throw a wrench into some very intelligent well thought out posts--what about the future possibility of *private* mainland sims? That is, outside servers joining the grid someday with LL's blessing?

Might dramatically change the whole cost/benefit analysis.

Rather than quote the whole post, I just quoted that bit to show which post I'm referring to.

That doesn't cut it, Desmond. You only wrote about recovering the money. You omitted the fact that you still have the goods - the island - and the money can be recovered in a very short space of time by selling it. The details in your post are only good if you are a person who will distribute the money from the island sale to those who morally own the land. I've no idea whether or not you would do that, but most island owners wouldn't.

I am still persuaded that there is no justifiable reason to sell a piece of land twice, and keep the money both times, which is what usually happens when islands are sold.

Is it essential to the topic that they be *mainland* sims, specifically? For both business and technical reasons, I find it hard to envision a time when LL will allow grid interconnect on positions adjacent to the Mainland.

(For that matter... God... wherever they go, they better stay well separate from other owner's private sims, or imagine the Daily Drama! That is, unless LL charges like a full sim fee for the service of moving those private sims around the grid--now *that* will be a profit center!)

I think private islands is confusing enough, with plenty of speculation about the up-front fees LL will charge for initial grid placement, plus monthly fees for interconnect. Some expect these fees to be substantially lower than current sim costs, such that even with reasonably robust hosting, a sim owner would realize savings. That's not what I'd expect, though. (Consider just the networking costs of keeping a sim reliably connected to the grid, most of which is currently saved in the "economy of scale" LL enjoys, where much of that bandwidth is in the datacenter LAN rather than a humongous internet access pipe.)

Tier (or rent) is rarely riskier than a few weeks, and is a matter of the tenant essentially paying for real-time services (occupancy). Yes, an insolvant landlord could put them out on the street, but on a private island charging up-front fees, that tenant has also lost thier lump-sum nest egg.

I think you would make a better argument saying that your up-front fees are a one-time, no-refundable payment for the privilege of renting (tiering) in Caledon. I could understand this argument, because I might look at your place and be willing to pay that fee if presented like that, openly. That also makes it clear that paying for the privilege of living elsewhere is simply that fee, with no misleading "ownership" catch-phrases thrown around.


My estate owner is Governor Linden, and I guarantee he is more solvent, has higher occupancy, is capitalised, has motivation, and a great track record. And yes, as much as I respect you, all better than could be said about you.


This thread, and the concern stated by the OP was risk to the unwitting "buyer" of estate land. I totally (trust me) understand your concern for your own financial security, but let's be honest that its what this is all about.

O, would it were true! A sadly different tale is told by the auction page--plus all the purple on the map not yet on that page--plus all the parcels abandoned to Maintenance that don't even have an Auction ID yet assigned--plus the unknowable acreage where tier hasn't been paid but the Governor has yet to reclaim.

(Not disputing the point, just bemoaning the sorry excuse for an Estate manager the Lindens have been to date. And hoping recent encouraging developments will continue.)

That is *precisely* what I am saying! All along. Openly. More than openly!

I've been blabbing about the perils of private estate 'ownership' on these forums for literally years. Ownership doesn't exist on private estates.

I have *never* told anyone they owned anything in Caledon. Check my covenant, I make it *painfully* clear in the covenant. Lots of decent estate owners do this - check Steve Mafouz's covenant too, for instance.

Ask anyone in Caledon, read my statements on these forums and ask anyone who has dealt with me, ever - nobody. owns. land. on. private. estates!

The trouble with private estates is that it's easy for scammers or the foolish to misrepresent them horribly. It's like going to Hertz, renting a car, peeling the Hertz stickers off and then 'selling' the car.

This is a big part of why I'm on forums, and resident answers. It's critical people know what an estate owner can do:

a) reclaim any parcel from anyone at any time
b) decide their estate is not worth the fuss and sell off
c) make devastating financial blunders, no matter how nice they are.

I have a screenshot texture inworld, showing the reclaim button and estate controls, which I can show to anyone who thinks they 'own' something on a private estate anywhere.

* * * * *

RE mainland track record: Caledon's percent occupancy and day to day attention to the estate kicks mainland ass.

Sorry to put it that way, I loooove the folks at Linden Research Inc and the mainland team. But they are in a situation that is kind of outta control, and it will take them a long time to get the mainland experience on par with the private estates.

This is why people rent from other residents in the first place. Otherwise it would be completely ridiculous and pointless to ever leave the mainland.

On the mainland, your land is your own - at least until a neighbour sets out 40 camp chairs and two dozen temp rezzers. Sure, you can abuse report them and they may be forced to back down a bit. But we all know how effective that is in the long run.

Our service provider is making the best of what they have, really and truly. But I'm in a boutique situation comparatively speaking, and they are going to have a really, really rough time matching boutique service and performance across a quarter billion square meters of mainland.

I can back my statements up - I'm running a waiting list with real people that you can talk to, and you can IM anyone with a name or group having Caledon land. You can look at my traffic (Tateru Nino's dwellonit blog logged us at around 11 or 12,000 visits a week for most of the summer/fall), you can look at green dots on the map, you can come pay us a visit any time you like and see for yourself.

As for our service provider having 3 months of reserve capital lying around for operations, as I do - I honestly don't know. They might.

As for motivation, I do agree - Linden Research has more motivation to stay in business than I do. I'm pretty sure of that. Which is why I'm willing to be a private estate manager here.

I love your full disclosure and the way you point out the truths people need to know who are thinking of renting on a private estate. Your Hertz analogy was perfect.The only way to get around the pitfalls of mainland and to have the mainland simulate estate living is to buy the entire sim. Even then, you have to pray the neighboring sims don't go to hell, but at least you've got control of 65k meters.

You are blaming the victim here. If someone sells an island that they have already sold all or part of a new owner, he or she has defrauded two parties: 1) the people he or she originally sold island land to, and 2) the new buyer of the island who was sold the island to as if it were unencumbered.

Both parties have been taken advantage of. You appear to think that victim number two (the new owner) should be penalized by having to buy the island over again, from victim(s) number one. That is no more fair than the alternative. There is no good way for two people who have been sold the same land to deal with the situation.

Desmond makes it very clear to people "buying" in Caledon that what they are buying is the right to lease land. He's always been quite clear that it is not a true sale as it would be on the mainland.

The buyer, by not investigating what they are buying, makes this scam all too easy and hey many of them don't seem to care about the existing residents in their rush to snag a bargain. It's greed on the part of the buyer that makes this scam all too easy.



If victim number two will not buy responsibly, then yes, they should be penalised. If buyers would actually take responsibility for what they were buying, these scams would be less prevalent.

Yep, force old owner to evict .... that is the only safe solution for any buyer who is getting an island with resellable plots.

The reason why I didn't have fees then - or rather why I wouldn't have paid them if they had been asked for - was that Caledon was new, and so were you, really.

As far as I was concerned you were just some person that the Professor had spoken with, and who was starting a sim. I had never heard of your business in Alice and if I had, I would not have been particularly interested. The Lodge was placed there, but that was it. I would not have property in Caledon now had there been an up-front fee.

It might have been like passing out money at the time but without that, Caledon would just not have happened at all.

(And, oh, yes, I have had land in Victoria City, and I still have some in SteamSkyCity, for which I have paid an upfront fee - but that was done on the basis that Caledon at that time was a respectable ongoing concern, and thus I was making an investment, which could be recouped. I made a considerable profit selling rights to my VicCity land.)

I understand this part better now. And it's extremely fair, because it truthfully represents precisely what one gets in return for a payment--and that is precisely the *only* thing that anyone can be sure of getting, no matter what a reputable Estate owner may promise to do.

But: So now, if the old owner had the "fee for privilege to rent" philosophy, the previous tenants are just SOL, and the seller has effectively been paid twice for the same property: once by the tenants' up-front fees, and now again by the sim buyer.

I'm beginning to think that sims should not be transferable at all but rather revert to Governor Linden and become Mainland outposts if the Estate owner stops paying the monthly fees. (Ignoring for the nonce that unpleasantness about the tenants having to become Premium members.)

In a nutshell, yes. The island owner can collect the privilege fee multiple times over before ever selling the island. There is nothing wrong with that, in my opinion. The only problem comes at the end of the road for the old island owner. The transition is always going to be rough, especially for those last in, who did not get much opportunity to enjoy the island before getting kicked off.

Ah, sorry I missed this post, wasn't ignoring you.

The money can't be anywhere near fully recovered.

You won't get 1675 USD back for your used island - who would pay it? Plus transfer fees. It's too easy to get a new region from our service provider with the first month's tier not due for 30 days.

I've seen it plenty - I'm contacted regularly by people asking me to 'buy and save' their region (I have never once done this, or purchased a used region).

Generally these land barons on the way out are kinda desperate, and staring down tier deadlines.

If they deceived anyone and thereby stuck it to residents, sure, there's an ethical responsibility there. In any case, there won't be much left to distribute however.

* * * * *

Here's an interesting question for you.

What's worth more: Caledon as it stands, or the equivalent in a bunch of used regions for sale, possibly with strings attached?

If you say "Caledon" then that implies that there is added value.

Might some of that added value be due to me?

I have absolutely no plans to sell off Caledon as an estate. But say I did. Would I deserve to get anything for it? Anything at all?

Here's another bit of data. I personally average about two hours of customer support per new resident, in the first month. This doesn't stop at the first month, for many. (any land baron could tell you horror stories)

I don't really know what estate service support should be valued at. But in my first life business, I bill out at anywhere from 50 to 100 USD per hour, depending what I'm doing.

Would I be 'worth less' or 'worth more' than say, another random estate owner? Should I be able to 'set the rate' for such service, or should it be set for me?

Another interesting factor: I have volunteer estate managers. I can't even begin to tell you the amount of time they spend, helping residents. Sometimes an estate manager may not spend a lot of hours helping, but maybe they write a key post on the sl.dev list, or submit a JIRA that crucially affects the estate.

What is their time worth, for their expertise, to the residents?

We have a trolley, a multi-sim railroad that people enjoy, and a ferry coming. I 'thanked' the creators a little bit but this wouldn't even remotely cover what anyone would consider as 'paid.' Some of it is under creative commons licence.

What of the added value here?

* * * * *

I can't speak for other estates. But if I put an honest, nay even a deeply discounted dollar amount on the time spent for the sake of residents, the up front land expense is a sorry joke - on me and many other parties helping out.

In terms of justice - true, poetic justice - the volunteer estate managers pwn any claim made by anybody.

All that said, I still don't have plans to sell off Caledon regions.

The amount isn't important. It's selling the land twice and keeping the money both times that matters. I'm talking about what I believe is the norm. Since I posted that, you said that you personally don't "sell" the land to people, and that you make a charge for services (my paraphrase), so it wouldn't apply to you, but I believe it does apply to most other island owners.

I can't answer the question because I don't know Caledon.

Thanks for the all the posts in this thread, especially the one with your price breakout and time-to-breakeven calculations. I was looking for that a couple days before you posted it here and couldn't find it. Interesting CEO succession plan. If your daughter would be capable of running Caledon, then you could add in the cost of the MBA education that she'll have by the time she gets out of high school. That'll bring your hourly pay up to something more than $2/hour. Maybe as much as $5. Keep up the great work, and one day the Lindens will be washing her car and bringing her coffee.

I've heard from others you are an excellent Estate Owner and it's obvious reading your post. Your point is very valid about the added value. I also hope what you derive from your business is worth the effort and time.

Too bad there are many people into real estate in SL, not of your caliber and I fear as things are, it will become worse, which effects the good estate owners as well. There is just too much room for scamming in SL, as it is and too many people with no principles looking for any trick to make a buck. So many horror stories.

Well, but that's kinda the problem: If you sell it, it instantly loses all the value that is attributable to the fact that you're the owner. So the question would become, what is Caledon worth--with all the invested time and effort of all contributors--without Desmond Shang? The wrong buyers could very quickly find themselves owners of a lot of very pretty vacant sims without enough revenue to cover tier.

Ironically, then, the more you're worth to Caledon, the less Caledon is worth to you (at sale).

(Btw, I notice the careful formulation: "... as an estate" but I won't hazard an interpretation. I've just been reading too much of the Byzantine Bankers problem lately. )

Thankfully I don't have that issue with Liome. Now that it's built, anyone can collect the rent. The most important part of Liome these days is Rosie Castro, the sim manager.

Based on what Desmond was saying earlier, you've been told the earnings, and you can estimate the growth. If you start to value Caledon, Inc. as if it was a stock, you can easily see that it would require some very deep pockets to pay what Caledon is worth. The kind of people with that amount of resources wouldn't buy it without a whole team of qualified people on full time salary to replace Desmond. Someone could have made the same case about Walt Disney and his company, but they've managed to do pretty well for themselves.

And before you say that Desmond is no Walt Disney, remember that Desmond is warmer, more animated, and is not responsible for that Small World abomination.

Yeah, and I don't know Des's politics, but I'd venture to guess he's a bit more progressive.

But I'm not sure deep pockets are enough. If Well-Capitalized Corporation were to buy Caledon, I think they'd face an immediate challenge of retaining people's trust. Is WCC's PR department well-versed in SL? Do they have Des's in-world track-record? (Who does? Anshe? Prok? How many would stick around loyally through the first tier increase, with either of those at the steam controls?)

I don't mean to make Caledon sound like a cult of personality. But Des brings a lot more to the table than deep pockets.