From: nimrod Yaffle
Owning a bunch of land, you cannot "sell" the lots to other people, and be able to reclaim them.
This quote might confuse you, Greybeard. Let me explain. This is going to be quite longwinded, but if you want to be a baby land-baron, this is stuff you need to know.
On the normal mainland, you can own just part of a sim, and when it is yours you can divide it into smaller bits, and set each for sale separately at any price you like. Another resident can buy such a plot by just clicking on a button, after which the SL servers have them registered as the owner, and any recurring land charges automatically become the new owners responsibility. You as previous owner then no longer have any power over the plot at all.
With a private island, the SL servers register a single person as owner of the whole island, and the only way this changes is when the whole island is sold, and a new owner becomes the single owner. Its all or nothing as far as the relationship with LL is concerned.
If you wish to divide your land up and get other people to use parts, and pay you, you can do this two ways, but however you divide it up you will remain registered as the owner, and will remain responsible, on your own, for paying the recurring fees to LL.
One way is to rent out subplots, and use the rent you get from your tenants to pay the Linden "tier". Because of quantity discount you can make a profit on this, but you need to find the cash to buy each sim, so your rate of expansion will be limited by your wallet. The rental is a private, unenforceable agreement between the two of you. But of course, you, as sim owner, can boot a non-paying tenant out at any time.
The other way is to take a capital sum from each new tenant as he starts to rent. This can be thought of different ways. Some like to think of it as a "non-returnable deposit" which each tenant attempts to recover (maybe at a profit) from his successor.
Others talk of it as a "selling price", either for the transfer of the rental agreement or "lease", or even for the sale of the land itself. Use of the latter language is controversial, and generates argument and heat.
This is because such a landsale is not registered on SL servers, or recognised as a sale by the Lindens. It cannot be accomplished by clicking on the "buy" button. You as sim-owner cannot lose your ownership privileges, and can seize the land back at any time with a couple of clicks. it is another unenforceable private agreement, with you in total practical control via your landowners powers.
As sim owner there is of course a huge advantage if you can persuade your clients to "buy" in this way. You can be quickly reimbursed for the US$1250 cost of your sim, allowing you to immediately buy another, and so on. Very fast expansion is possible by this method. But you will face criticism if you tell your clients that they are buying the land, and that you are actually selling it to them. This is technically incorrect and, some feel, borders on misrepresentation.
As a potential simowner, this would be a moral dilemma for you. But the rewards of seeking a little positive ambiguity are so very high that it must be a strong temptation.
Some of us wonder why the client goes along with it, rather than take a straight no-deposit tenancy which otherwise has every one of the same benefits - theming etc. Presumably some are emotionally attached to the idea of "ownership", maybe not realising, or worrying, how it can be repossessed at a stroke. Some others are probably hoping for a capital gain on resale of the lease. But according to the biggest of the sim owners, posting here recently, no such capital gains have yet occurred - I think she said the average to date is a 35% loss.
But if you can overcome any moral compunction, Greybeard, the pseudo-sale method will give you a big advantage over those competitors who consider it wrong, and won't do it (and there are several).
You will be able to expand much, much more quickly, because your tenants will effectively gift you your next sim. You'll probably leave your more punctilious competitors floundering in the dust.
There, you are, Greybeard, my guide to making money from owning a private sim. Enjoy......