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Thursday, January 15, 2015

How to Be A Land Baron(ess)

I rent out land to residents in Second Life.  Technically, that makes me a "land baron" although we usually reserve this term for those Private Estate owners who own and manage large numbers of regions.  My own enterprise is much smaller...less than one region, on the Mainland.  Still, I've been doing this for about five years now, and since my little business is FINALLY showing a (small) profit, I feel qualified to write about How To Do It.

First of all, it's not all that easy, at least not at first.  Those of you who think that Land Barony is a quick road to riches, please go back and re-read the first paragraph.  Note the "five years" and "small profit" parts!  But if you are still serious about trying this, read on.

First Steps.  Well, you need some land, obviously!  If you have never owned land in Second Life, I STRONGLY urge you to start slow.  Be a land OWNER first, with just a parcel for yourself, before leaping into renting land to other residents.  There are three ways to get land.
  1. Buy Mainland directly.  You'll need to be a Premium member to do this.   You can start with a free Linden Home, or buy a small 512 square meter parcel from another resident.  You don't have to pay a monthly land fee until you own more than 512 m2.
  2. Buy Mainland through an auction.  The majority of Mainland parcels are sold resident-to-resident, but some are offered through an auction process.  You can find the land auctions here: http://usd.auctions.secondlife.com/  These auctions work like the auctions on eBay, with an automatic bidding process.
  3. "Buy" a parcel on a Private Estate.  You don't have to be a Premium member to do this.  "Owning" a Private Estate parcel is a little like Mainland ownership and a little like renting.  You will probably have full control over parcel access privileges, and may have some terraforming privileges...but you will pay your monthly fee to the Estate Owner, not Linden Lab, and you may not be able to deed the land to a land group.  You are also subject to the rules, not to mention the whims, of the Estate Owner.  A good Estate Owner can make your Second Life more pleasant and preserve the quality of the neighborhood.  A bad owner, on the other hand, can make your life miserable.
While I do enjoy living on a well-run estate, I don't recommend buying just part of a Private Estate region if you intend to rent some or all of it to other residents.  The Estate Owner might not allow sub-leasing, and even if they do, you're competing directly with the Estate Owner for tenants -- and by the nature of things, she can charge less than you can.

Learn how land works!
  • how to rez things
  • how to limit the ability to rez things to only those people you want to have that ability
  • how to find lost things
  • how to return unwanted things
  • how to use Autoreturn
  • how to terraform the ground
  • how to build things.  You may use a lot of pre-fab objects like trees and houses, but you should at least be able to build and edit simple things like walkways!  The more things you can create yourself, the more you will save on pre-made things, and the more unique your land will be.
  • how to put up a skybox without violating parcel boundaries
  • how to share or deed land to a group  (and how to create and manage a group, if you haven't ever done that before!)
  • how to get a radio or a TV working on group-owned land
  • how to fight lag
  • how to deal with trespassers or stalkers
  • how to get LL support when needed
  • how to set up and use a rental box
  • how to set up and use a security system, and how (and when) to use banlines
I have not described how to do all this in detail.  For one thing, it would turn this blog post into a book.  For another, I'm leaving them as Exercises for the Student.  You'll learn them better by DOING them.  When you feel comfortable with these things, then you are ready to take the big leap and become a landlord.

What To Offer?   You can offer your tenants bare, unimproved land...just parcels for them to put their own house on.  Or, you can create homes, or buy prefab homes from other creators, and put them on your land, ready to move in to.  You can even buy fully-furnished and scripted homes and rent turn-key residences.  Each of these approaches appeals to a different market segment.  You may want to create a complete environment for your tenants...a city, a science fiction setting, a fantasy forest, or an underwater realm for mer-folk.  This approach may appeal to the roleplaying crowd.  Remember that the more prims you use in creating a desirable environment, the less prims you can allow your tenants.  You must work to achieve a balance.

What to Buy?  You can buy Mainland, or you can buy an entire Private Estate region.  A new region, bought directly from LL, costs an initial fee of $1,000 USD, but you can often buy a region for much less by taking it over from an existing owner.  There's a forum where you can find such regions on offer: http://community.secondlife.com/t5/Regions-for-Sale-Full-Private/bd-p/RegionsforSaleFullRegions
There is also a specific procedure for this type of transaction.  DO NOT pay the owner anything directly!  Instead, follow the directions here: http://community.secondlife.com/t5/English-Knowledge-Base/Managing-Private-Regions/ta-p/700115#Section_.3

Your Private Estate region will cost you $295 USD per month.  Be prepared for at least several months of negative cash flow while you get your land set up and get the word out to prospective tenants.  Tier is less on the Mainland ($195 per month for a full region) but the initial purchase price may be higher, depending on the land's location.

Private Estate regions offer you more control.  You can see more information about what scripts are running there (and causing lag.)  You can write your own Covenant and have it show in the land window.  You can terraform more (+/- 100 meters, vs. +/- 4m on the Mainland.)  You can re-start the region yourself, and you can assign the terrain textures.  On the other hand, the Mainland is very large and if your land is well located offers your tenants (and you!) the opportunity to explore widely on foot or by vehicle.

Location is very important, especially with Mainland.  Land around the Blake Sea sailing regions is especially desirable (and will be priced accordingly!)  But if you want to offer skybox rentals, any old bombed-out hunk of Mainland will do, since your residents will be far above and never see it.  Be sure to check the Maturity Rating.  This is set by LL and cannot be changed, so be sure it supports what you want to do with the land, and what your prospective tenants will want.

Once you own at least one full Private Estate region, you can purchase Homestead regions as well.  These cost less to buy and maintain, but support fewer avatars and prims than a full region.  They are, however, the same physical size as a full region, so they are popular with tenants who want a large piece of land for a comparatively low price.  (You could buy OpenSpace regions too, but these are really intended as untenanted ocean or empty land.  They aren't suitable to rent out.)

Landlord On A Budget.  Maybe you can't afford to buy a whole region, either on the Mainland or as a Private Estate.  I think the practical minimum for a rental operation is a half region ($125/mo).  You can probably get as many as eight to twelve nice rentals on a parcel of this size.  However, you may be able to go with even less...just buy some small 1024 m2 parcels and rent them out.  They don't have to be connected, or even in the same region.  This approach is like the Real Life investor who buys up houses here and there all over town, and rents them out.

Commercial Property.  Some landlords build shopping malls, and then rent out store space.  This is a VERY hands on business, because you must work to attract traffic to your location.  If you don't, your store owners will quickly depart for greener pastures.  Merchants WILL pay attention to your traffic statistics.  Hold events, advertise, help your tenants advertise.  Organize sales with your merchants.  Talk to some of the more successful SL business or club owners and see if you can attract one or more of them to be "anchor" stores for your mall.  You are competing with the SL Marketplace, so you must provide a place that both merchants and customers can easily find, and visit.  Malls that have both a ballroom and stores that sell formal wear may do well...one hand washes the other, as it were.

How to Get Tenants.  This is the hardest part.
First, you must make your land a desirable place to live.  A great location is a huge plus!  Nice terraforming and landscaping is the next step, and finally, either sites with pleasant views, or well-made and textured living spaces.  Having amenities helps, too.  For example, we have a singles and couples dance system that works anywhere in the sim, with plenty of remote access points and a good assortment of dances.

Next, you have to get the word out.  You should list your land in Search ($L30 per week per parcel) and you should take out a Classified ad.  Places get a higher ranking in the Classifieds by paying more for their ad, but don't try to compete with places spending thousands of $L per month.  Just get yourself listed.  You can purchase space on ad boards in many places in SL, but I have not found these to be very productive.  You can hold Events on your land...parties, games, scavenger hunts...and list them on the SL Events page.

There are Land forums on the Second Life web site where you can advertise your rentals and sales.  There is also a Real Estate section of the Marketplace where you can offer a notecard with information about your properties.

I also have my land rentals prominently featured in my Profile.  There's a link in my Forum signature too, and I make it a point to be an active participant in the SL Forums.  This blog is another, very low key, method of advertising (RENT AT MASOCADO, Y'ALL!)

Word of mouth is your best form of advertising.  Mention your land rental business to everyone you talk to!  Mention it in group chats (but for heaven's sake, don't spam groups, that will get you banned from them!)  Ask your friends to tell THEIR friends.  Most of all, Keep Your Tenants Happy.  If you do, even if they leave they may come back, or tell their friends what a nice place you run.

What to Charge.  This is very tricky.  Some landlords who can offer a very desirable location can charge more for it.  Others whose offerings don't stand out from the crowd must offer lower prices.  I charge by the prim, at a rate of roughly $L7.5 per prim per calendar month...but I also have land with direct access to vast areas of Linden Ocean.  You should at least calculate your monthly expenses, and set your prices so that your income meets or exceeds those expenses.  Be sure to figure in a vacancy factor...you will probably almost always have some un-rented parcels.

Minimize Your Tier per Square Meter. On the Mainland, the tier system is set up so that the more land you own (up to one full region,) the less tier you pay per square meter.  You can see this by studying the tier table here: https://secondlife.com/my/account/landfees.php?lang=en-US  So buy the most land you can afford.  If you find that you are "in between" tier levels, either buy more land right up to your tier level maximum, or rent out your spare tier to another person who needs it.  (See my earlier post on this, "Wheelers and Dealers.")  You'll probably be making a land rental group for your tenants, so consider deeding your land to the group.  Groups can own 10% more land than an individual for the same tier payment.

How to Charge.  Most Mainland rentals charge by the week.  I have found it much more convenient for both me and my tenants to charge by the calendar month.  They are hassled less often with reminders to pay their rent, and I have many fewer reminders to send out!  Most land owners use some sort of rental box system to collect payments.  I use HippoTech, and I like that it allows me to manage all my rental boxes from a single web page.  Some landlords set up a central payment location with a kiosk or ATM type system.  Some landlords allow payments in $USD, direct to a PayPal account.  You could even, if you just have one or two rentals, just use an informal agreement with your tenants..."Pay me $L3500 directly, on the 15th of every month."

How about promotional offers?  There are several possibilities.  You can offer a "referral bonus" to tenants who bring in another tenant.  You can offer a month's free rent...but don't make it the FIRST month, everyone will come and stay for that month, then leave!  Give 'em a free third or fourth month!

Be Friendly!  Greet all visitors to your land politely.  Respond as quickly as possible to tenant problems and requests.  Be on the alert for a new tenant paying a rental box on a vacancy, and get back to them quickly with a group invitation and a friendly welcome.  If you're holding an event, be sure to get out some group notices about it.  Do your best to be fair if there is a dispute to settle, either between tenants or between a tenant and yourself.

Land management is a hands-on business.  Don't expect to just buy some land, divide it into parcels, plop down some rental boxes and sit back while the money rolls in.  It doesn't work that way.

1 comment:

  1. Thank you for your interesting writeup about Second Life Real Estate.

    ReplyDelete