How to make 5.000 US$ per month ?

Hi,

I'm thinking of quiting my RL job and to start a business in SL.

I have an idea to make one area with 9 islands (3x3). In the middle a plaza with commercial center, club, ...
Land arround plaza for selling/renting land, houses, appartments, small private islands, docks for boats, skyboxes, ..., ...

I have the money to invest for buying the 9 islands, to pay the monthly fees for 6 months and for living in RL during these 6 months.

MY QUESTIONS:
Is my plan realistic or not ?
Will I make 5000US$/month PROFIT after 6 months or not?
What do you think: am i crazy or not ?
Are there people earning money in SL as a fulltime job ?
...., ...., .... ?

Don't quit your day job !!!

Many people make full time income in SL but most of them treat it as a very full time job.

Personally, I would invest the cash in something different and find an RL job but if SL is your thing then by all means go for it.

Till Phil decides he's tired of the whiners and paparazzi snoopers and pulls the plug.

that being said. try IMing someone who owns a lot of sims. there are people making money doing similar things.

If you've got that sort of spare cash from your current job then you'd be stupid to jack it in!

You. Are. Nuts.

Sorry, I don't mean to piss on your parade but I seriously doubt if it would work out. It would be nice if it did, but you'd be setting yourself up for waaaaaaaaaaaaay too much stress just to claw back the tier on 9 islands let alone turning a profit. Do you have a masochistic streak, perchance?

My recommendation:

Keep the day job for the time being and work your way up slowly towards your 9+ island goal. Start with 1 or 2 islands. Once they're at break-even or turning a profit and you've built up a bit of cash reserve, then think about expanding. Otherwise you risk throwing good money down a bottomless pit.

Not too many people are making a real life living doing what you propose, if any. 9 sims is a relatively small estate, and if you broke even each month, you'd be fortunate. Also consider that with open source servers just over the horizon, the land market in general has a big giant question mark hovering over it, with some pretty serious questions about the long term viability of this particular type of business model.

Keep your day job, as Alan says. It's too risky.

seems a HUGE risk to me.

Wouldnt it be better to keep your RL job; buy one island and see if you can turn a proffit with that first?

for 9 islands to earn you 5000$ US a month you need to make over $500 US PER ISLAND Proffit.

That seems a bit high considering thats over 100% proffit. Would be too easy for the competition to Undercut you by reducing margins.

Let's look at the numbers.....

$15,075.00 sim cost.
$2,655 first month tier.

Assuming you can get your sims totally up and running in one month without having to buy anything else, you will have spent $17,730. I'm sure you've looked at these numbers, and I am assuming you do not expect to recoupe these costs any time soon.

Now let's look at your potential monthly income.

Assuming you got all 9 sims up in the first 30 days and are ready to rent. You have also been marketing like crazy and were able to rent out all 8 of your rental islands to 100% occupancy (GREAT JOB!). Now you were able to charge more than the average current rate because of the awesome community you have built and are now renting each island for $500 per month. That's $4000 per month from the 8 islands.

The club in the center is a HUGE hit! Congratulations! You somehow found the holy grail of SL clubs and are making a whopping $1000 per month from it. Good work.

So your monthly income is $5000. Deduct the tier and you are left with $2,345. Less than half of your desired amount. If you are able to maintain the clubs status and 100% occupancy, it will take 8 months to recoupe your initial investment.

Good luck!

(edited: Bah, Schwanson beat me to it!)


Why not just do the math and see?

A sim contains about 16k prims. Say you'd use 25% of that to put up buildings etc. Leaves 12k.

I'm a assuming that you plan to sublet it as apartments or vendorspace. A competetive price would be about 8L / prim and month. Assuming that people will rent 100% of your land at all times, that would bring in 96k L per sim and month, or 864k for all nine sims. Or about 3200 USD.

That is the absolute maximum, and it completely ignores tier costs or any other expenditures. Realistically, you'd make allot less. So no, 5k USD a month isn't possible without a much larger investment.

Build it and they will come. But what are you going to build? That's the rub in RL and SL.

Too many people just build stuff because they know how to build stuff. Or they see other people building stuff and say, "I can build a shopping mall, too!" That is the trouble with most businesses in RL, too. One must find out what people want before you build/manufacture it.

I started a number of businesses here because they solved a problem I had in SL. I then went asking around to see if it was a problem others had and wanted solved. Then I researched what value people gave the solution in L$s, and if I could solve the problem and still make a profit.

I wouldn't put together a nine-island estate unless I had already established the problem it was solving for SL residents: no place for Centaurs to live, no high-end resort with lots of customer service, no live entertainment venues with famous RL names, etc.

SL has plenty of discomallsexclubkasinoshopping wastelands. Please, please don't throw your money down a prim rabbit hole.

Research the hell out of a number of concepts and then start small. Rent a quarter of an island. Or test three concepts at once on three separate islands.

Or create a concept that does not require a lick of land. The service industry is still in its infancy and still undervalued.

Have an exit strategy before you enter. If you suddenly have to sell nine islands, how do you do that? Is it even possible? How much would you make/lose selling a used island, considering the supply of brand new ones is endless?

From the plan you described I think you would be lucky to break even. Discounting those people that invest thousands of dollars to flip land for profit, I think the biggest earners in SL are the content creators, and not the people who rent out commercial, residential land/buildings or facilities. What you are suggesting requires a large amount of initial investment, with addtional monthly investment without gaurentee of any return. creating content requires little to no investment and return is pure profit, you can then develop your land holdings in line with your profit margin.

Even if you were able to make $5000 per month, I wouldnt advise quiting your day job. I have invested $10 of real life money into SL and thats it. Ive been totally self sufficient since day one and I could now afford to quit my day job and live entirely off of SL but never in a million years would I choose to do so. Second life is just too unstable and Linden Labs are positively wobbly! I cannot trust my sole income to LL. There are just too many unknown variables and things that can and do go wrong.

Personally, If I was in your position, your money would be better spent taking a course in 3D modelling, buy the applicable 3D software start churning out those sculpties as thats where the easy money is going to be made in the foreseable future. There are only a fraction of content creators who have the ability (and software) to embrace sculpties and they are going to cash in big time as soon as the main grid can support them. And until the rest of the world catches sculpties are going to be the next big thing.

Porky has spoken

I would too not really recommend it. If you have fun with SL and just wanna do something nice, thats fine, but don't expect to get rich. Hard times ahead i guess. Take a close look at all the changes coming with Age Verification, Voice, Banning what ever the media will bring up, put on top of that Grid problems, account problems and all and think it over. SL is a very nice place to make dreams come true, but i would not invest a lot money in it right now, unless you can live with it if it does not get you profit.

Three little words: Open Source Server.

Your plans might work for a while (though I'm highly skeptical), but with Open Source servercode coming sometime in the next year or so, it's going to take more than a land rental property based on Linden Servers to make money. While the numbers cited here are ambitious and optimistic--you need to look at your long term sustainablity over the course of the remainder of your projected working life.

There are also benefits to having a RL job over an SL job that you might consider. Assuming that you live in the USA (and admittedly, you may not, in which case, plug in equivalent numbers here), you need to consider medical insurance. If your current job supplies some form of health coverage, you'll need to figure out how much matching your current plan will cost you. Deduct that cost from your projected profits. Deduct 28% of your profits for Federal Income Tax. Deduct your state income tax. Deduct FICA. Then look at the retirement plan you have at your job and match that. Still have any profits?

My advice would be not to quit your day job. In the meantime, take some small business oriented classes at your local community college or equivalent. Develop a solid business plan and then and only then pursue your dream.

I hate to be a downer, but most of the larger successful SL businesses (ACS and so forth) started small and grew to be the monsters they are. They didn't start overnight, and some (especially those in the Developer's program) have become RL corporations, complete with formalized business plans and organization.

Point blank, just because SL is a graphic interface doesn't mean you should approach business formation in anything less than the same way you'd approach it in Real Life. And the truth of the matter is that sustainable and profitable businesses in SL have done just that.

Kam

The vast majority of clubs are money pits; the lucky ones are able to manage the tier payments with vender rentals. As for rentals - yes, I think it is possible to make money, but consider also you are competing with island owners who are in SL as a hobby (the vast majority) and their fee structure only allows them to cover expenses. That would make it hard to get the prices up high enough to return a profit; it'd be like competing against China.

The rental market is pretty competitive. You'll get renters, but it depends on your price point and amenities, and you're crippled by actually expecting a profit.

A few people are able to pull a good income out of here, and more are able to supplement with a couple hundred bucks a month - but understand you're looking at serious time commitment here, its not somthing you can drop on a table and walk away from.

Another route to consider is content creation, but that's off topic. Look up "Electric Sheep" and "Millions of Us".

Assuming you put down the money and are able to pull this off, but find you are only bringing in 1500 a month - or worst yet, 800 this month, 1250 next month and 700 the month after that -- are you in the type of career where you can walk away from a good job, and then find another without worrying about the gap in employement history? Would you have any problems explaining a six or nine month employment gap as "playing in Second Life" to a hiring manager whose only exposure to it would have been an article he read in Time or Newsweek about it being tied in to sex clubs, gambling, and furry sex?

For some reason, when I read such questions I always think "I reveal my business idea, now please share yours and tell me how much you earn with it". Dunno why.

People who make 5000 per month probably are not inclined to post how they do it on the forums.

I have one suggestion - and it is one that many people have relied upon - become a "creature of the night" - or find a very rich patron. It is much easier than chonking up dream palaces and building apartments that don't have room to swing a Neko.

Quitting your real life job is a costly mistake. You will not be able to make as much money on SL as you would IRL. I've been around the block long enough to know. The only successful person i heard about using SL is anshe chung, and a lot of us don't like what she did either.

If you have the money - invest at first very small maybe one Sim. Then see what you can accomplish - I have 3 islands and I am extremely busy literally nonstop for a year. Now, I earn just enough for my habits in SL and to pay tiers for my three Sims.

You can't go by traffic anymore because people falsify traffic with campers, just 2 days ago i went on a exploration safari of busy places every single place i went to was a casino people sitting in a chair in front of a slot machine or something like it and even found a nightclub that every dance ball was a camping chair thats insane,

I do not have any of that I average a legitimate average of 70 people a day and it is for the beauty of my Sims, and I am proud of that - what pays my bills are not the rents - but my merchandise I sell merchandise, and I sell alot of alot of different things, clothing, jewelry , hair, shoes, hair accesories, furniture, houses and commissioned clothing and I have to create literally daily because people are bored quickly my hard work never stops. Thankfully I love what I do.

So my suggestion is for you to be sensible because we are in a virtual environment keep real life earnings as your means to play here not to live out there.

amarismiles

Don't quit your day job.

Only a handful of people (Less than 2%) out of the millions of those who joined SL actually make any profit at all from SL, and only a fraction of that group (less that 300 people) makes anything close to a living wage off SL. The average high school kid (average, not the school sports hero) has better odds of becoming an sports superstar or a top-rank movie star than the average SL Player has of making even a modest full-time income from SL. Millions will try. A handful may win. Most will lose.

I make a small profit every month in SL, working 20 to 40 hours a week as a content creator and a sim architect. I have people approaching me out of the blue asking for bids for me to design and build multiple sims for them. Yet I wouldn't in a million years dream of quitting my day job to work solely in SL. I couldn't possibly get enough income to come close to what I earn in RL.

Others in this thread already ran the numbers for you. 9 sims can't possibly earn enough profit, by any legitimate means, to make your financial goal. Most sim owners are lucky if they manage to break even and cover their start-up costs and maintenance expenses.

Indeed.

With some modest effort, you can make about 170 USD/mo from an island at current rates. That's with 468 prims set aside for infrastructure and no more.

170 USD * 9 is 1530 USD/mo or 18360 a year.

Also realise, that if SL fades a bit, and your occupancy drops from 100%, you might be lucky to make 100 USD/mo, which is 10800 a year. Or less.


* * * * *

So how many islands for 5000 USD/mo? 5000/170 = 29.4. That's 30 islands.

30 * 1675 USD = 50250 USD to start.

30 * 295 USD/mo is 8850 USD/mo tier.

It's good to have say 90 days tier on hand: 8850 * 3 = 26550 USD.

So startup (50250) + 90 days tier (26550) is 76800 USD to start.

* * * * *

Let's say each island has 15 tenants on average. 15 * 30 is 450 people.

In my experience you'll spend about 1 hour on average 'explaining things' to a resident and another hour on average helping them settle in.

2 hrs * 450 people = 900 hours, or 22.5 40 hour weeks, slightly over 5 months.

But wait! There's such a thing as resident turnover or 'churn'. This number varies from area to area, I tend to be a bit confidential about it, but let's just say 5 months is about right... except you'll be doing about 60 hr weeks not 40.

* * * * *

So it's 6 months later - what happened?

Well, for one thing, you got most or all of your 50,000 USD down recovered. Because you charged $L 7 per meter for land. Remember, you kept 468 prims aside, and rented out 96.88% of your sims: 63492m.

$L 7 * 63492 * 30 sims = $L 13,333,320.

Lindex cashout: $L 13,333,320 / 266 * .965 = 48370.87 USD recovered in one shot over the course of a weekend, or even one busy Friday night! It won't even move the LindeX rate by $L 1. You effectively put down only 1879.12 USD for the sims, not 50250 USD, by the time it's over.

But what of the 26550 USD you keep aside for 90 days tier reserve? Well, at 5000 a month, that's easily covered with 6 months income at full occupancy. Since you had vacancy to start, expect it recovered after about a year.

* * * * *

So there you go, 5100 USD/mo or 61,200 USD/year. Now taxes. You are roughly in the 30% category, so your 'take home' will be about 61,200 * .70 or 42840 USD a year cold, hard cash after a year of effort, and about 77k USD invested. And largely or fully recovered in 12 months. Not bad!

I'll leave investment income/wage income definitions, incorporation, sole proprietorship or whatnot up to you.


Ah, and this assumes you can make a compelling area with 468 prims per region and whatever spare social time you have left after 60 hour weeks doing the 'land' thing. And that the land market or SL doesn't implode, &c &c.

And that island setup time is zero hours (takes me a few days each; 30 regions would take me 3 months) and that you will have area developers that do stuff for nothing (possible, but I pay 10's of 1000's of $L for each region to be developed myself - I'd estimate $L 1M or say 3000 to 4000 USD for that).

Fun speculation, mmm?

Only one thing crazier than following your dream... that's thinking you are secure making someone else rich from the confines of a cubicle your entire life!

Good luck, and dare to dream.

Say wha????
Now I know why I failed Math - I am in awe of your ability to calculate.
And a little frightened ...

I wouldn't quit your day job quite yet. I am sure Desmond is right, that if you can create an area compelling enough to draw people away from other generic land dealers you can make plenty of money from multiple islands. On the other hand, doing this is hard -not just because of building (which is about to get a whole lot harder) but also because you will be fighting against the network effect of the existing land areas. Unless, that is, you branch out and try a complete new theme - but if you do that, maybe nobody else will like it..

What you are describing is a business model with a large risk factor. I would not recommend purchasing several islands all at once and doing this full time as opposed to working a steady RL job.

In other words, don't quit your day job just to run these islands. As another poster said previously, it will cost you $8850 USD in tier starting 30 days after your islands are delivered.

Start with one island and make it profitable then go from there. I wouldn't quit my day job unless the income I was making in SL matched or exceeded that of what I was making in RL...and for a substantial period of time. It's just too risky.

As for your idea about the islands I do not think anyone can give you a good faith 'yay' or 'nay' because we have no idea of what your building, management, or design style will be and cannot determine whether or not it would be profitable. Even if we could, things change from day to day here and what is profitable today, may not be tomorrow. So it all depends on YOU and your ability to emerge and adapt.

Hope this helps and best of luck to you