Land Purchase & Maintenance

Use this thread to discuss land pricing.

MONTHLY $ -- SQ M OF LAND -- COSTS PER SQ M

$195.00 month/65535 sq m=$0.0029 per sq m
$125.00 month/32768 sq m=$0.0038 per sq m
$75.00 month/16384 sq m=$0.0045 per sq m
$40.00 month/8192 sq m=$0.0048 per sq m
$25.00 month/4096 sq m=$0.0061 per sq m
$15.00 month/2048 sq m=$0.0073 per sq m
$8.00 month/1024 sq m=$0.0078 per sq m
$5.00 month/512 sq m=$0.0097 per sq m

At the 1/128th region tier level, how much is a region worth? $640
At the entire region tier level, how much is a region worth? $195

Land at the 1/128th region tier level is 328% more expensive then land at the entire region tier level.

The current model for purchasing land should be replaced with a flexible model that charges based on how much land is actually owned by a given resident.

A resident who currently owns 8192 sq. m of land has little or no motivation to acquire an extra 512 sq. m sitting next to their parcel of land.

- This is a lost $5 in monthly land fees. If all current premium users purchased an extra $5 of land, this would be an extra $200,000 a month in gained land sales.

- Jumping from $40 a month to $75 is an extra $35 per month. This may be quite a bit more commitment then a resident is willing to make.

- To get the most most out of the $75 a month, the resident would have to purchase an additional 8192 sq. m of land. The resident only wants the additional 512 sq. m of land.

- The extra land this resident can purchase most likely won't be available in the same region.

- Those residents in developing countries may have the extra $5 but not an extra $35 a month.

Good post, Effsey. I totally agree with you. I'd like to see a system put in place that is more sensitive to people's needs, perhaps a tier for every 512M^2 increment.

However, it would have to be done with concern for those in the land rental business. It still has to be cheaper to rent than to own, or no one will rent, and all the landlords will be SOL. The new governance tools we heard about should help with that some, as they will add value to managed communities, but still, there has to be a financial incentive in place.

Right now, let's say a landlord owns a sim, and rents it out as 16 parcels (I think that's pretty typical). The landlord is paying $195 a month, which means as long as he or she is charging above $13 monthly to each tenant, and below $24, he or she is making a profit while undercutting regular tier fees.

Next year, when the cost for new islands goes up to $295, that window will significantly narrow. The bottom line will go up to about $19 instead of $13. Split the difference between landlord cost, and regular tier, and you're looking at somewhere around $22 to rent a 4096^2M plot on a private island. That's only $3 cheaper than someone would pay to have his or her own plot somewhere on the mainland, not a huge incentive.

Now, throw in a more fair pricing scheme for incremental tier fees, and you could destroy landlord business completely. No one wants that (I hope). I should qualify that statement, by the way, by stating that I am not a landlord myself, so I have no vested interest in this, just human-to-human concern for those who are running land rental businesses.

The point is balancing the numbers to account for the interests of all stakeholders is not an easy task. What looks really good for one pool of residents could be really bad for another.

The only (unfortunate) solution that seems to be balanced for everyone as I look at the numbers seems to be to increase prices across the board, not just prices for islands. That would allow landlords the breathing room to undercut regular tier fees while allowing mainland residents the flexibility to increase or decrease their tier in small increments.

If $295 is the magic number for a whole sim, I might propose something like the attached Excel file for the distributed cost breakdown. I've set it up with the current tier increments, which I'm calling the "base", highlighted in yellow, and I've added one additional one for 75% of a region. In between those amounts, fees are added on a cost per unit basis, with one unit being 512 square meters. The cost per unit goes down as the base goes up, ranging the total cost from $5 for one unit to $295 for a whole sim. The lowest tiers remain the same or very close to what they are now, while the highest ones increase incrementally to balance the whole thing.

The numbers might need a little tweaking, but assuming I'm thinking straight today, I believe a structure like this would make it much easier for "the little people" to acquire land while still allowing sim owners to make a profit on rent. Check it out, and let me know if you agree.

Chosen Few --

I will look over your .xls file when I return home tomorrow. To protect those renting land, we can start at $5 per 512 sq. m and finish at $295 per region.

The main goal should be to eliminate the large "steps" in the current tier system.

This flexibility would work in favor of those who rent/sell land as well as those who want small parcels of land.

:o)

Effsey

I am definitely open to the idea of only paying for land you actually own (metered pricing) instead of our current tiered pricing system.

Right now its difficult in our billing system, but moving in that direction may make a lot of sense.

Also, no need to presume that mainland whole region pricing is going up to $295 early next year. I think the concept of a different, lower mainland price makes sense while we don't have the estate tools.

And I definitely do not want to harm the land rental/resale business in second life.