First, an introduction.
I have been a resident of Second Life now since September 2006 (although it seems more like eighteen years than eighteen months), and my two main alts are Rock Ryder (business) and Rock Vacirca (social).
After being in SL for six months I decided to try my hand in the rental business, mainly because I was dissatisfied with the homes and environments on offer at that time, and so the Fair Isles Estate was born. My first sim was Sukka Mire, and it was a runaway success, filling very quickly, and with a waiting list for vacancies. This was due in no small part to the fabulous SkyHomes custom designed for me by that ace SL architect, ArchTX Edo, and with the inspiration for the interior design provided by another good friend, Kryss Atansoff.
The success of Sukka Mire prompted the purchase of another sim, Swey, and the same formula for success was employed there. Swey also quickly filled. The next sim was Hoini, and a different approach was adopted for this sim (I could always revert to the proven formula if the new approach failed). Hoini was to be a themed sim, and the theme was the 1001 Arabian Nights.
ArchTX was approached again, and he came up with a stunning design for the new SkyHomes based on his Blue Frost design, but again customised to employ domes and other nice touches. He also designed what has become a legendary place in SL, the Scheherazade Gardens, a magical place for hopeless romantics, floating serenely up at 700m. Each SkyHome was decorated to the highest standard, and all the art in the Homes came from the illustrations from the early editions of the 1001 Nights, with those of Edmund Dulac being prominent. Each tenant got a free magic carpet to get around on, and the sim became an overnight success on opening, and quickly became the flagship of the Estate. Whenever some one in the Resident Forums asked 'what is the best build in SL?', or 'what is the most romantic place in SL?', or 'where is a good place in SL to propose?', Hoini was mentioned by many people in response. You cannot imagine how this made me feel, I was glowing so much I almost went super-nova :)
But by the summer of 2007 things started to take a turn for the worse. Stability issues in SL started to stretch toleration, lag became the new demon, and support was almost non-existant. The introduction of a new continent, Corsica, brought land prices down which tempted some of my tenants to try their hand at land ownership/building, but I was able to replace them with those on the waiting list. So, I was still full, my tenants were reasonably happy, and it was costing me nothing (I never made a profit on the entire Estate, that was never the goal, the rents were set to simply break-even on my investment, with a capital amortization period being set at eighteen months).
However, in late September 2007 LL sprang a surprise announcement on their European-based customers, with the news that they would be charging European rates of Value Added Tax (VAT) on all land purchases and on monthly tier payments. They later admitted that they had been absorbing the cost of VAT for some time to ensure a level playing field for residents within SL, but could absorb it no more and were passing it on to their European customers. [Reference] There was no mention of the possibility of this in the Land Store when I was purchasing my sims. Had I known that LL were required to charge VAT to their European-based customers, but had been absorbing that cost for months, and that one day they may decide to stop absorbing that cost, I would never have expanded my rental estate. I was simply not made aware of this risk.
Although I am English, I reside in Germany, and my VAT rate there is 19%. There was no way that I could compete with US-based rental competitors who were not having to pay this tax, and I lost tenants quite quickly. Only a third of my tenants believed that the ambiance in my sims was enough of a factor to keep them from going off to other sims charging less rent for the same number of prims. Several of my competitors were openly advertising the fact that they were US-based, and not subject to VAT, and their rental rates would reflect this accordingly.
I had to cut costs, I got rid of two of my managers, which was not an easy thing to do at all, and I still could not compete, and I was losing money, fast. So in the following October I had to, very regretably, break up the Estate, selling all my sims, except for Hoini, which I wanted to hold on to as it was this sim that I had put the most work, time, and heart into.
As an aside, many people have asked me where I got the names for my sims from, such as Sukka Mire, Swey, Hoini etc. The answer is in the name of the Estate, the Fair Isles Estate. Fair Isle is an island off the north coast of Scotland. If you check a map of the island you will see that the names of my sims have come from field names and other places on the island.
More work was then done on Hoini to improve further the experience of living there, and eventually I managed to get the occupancy rate back up with a strong core of dedicated tenants who just loved the Hoini environment. I also purchased an OpenSpace sim to provide even more room for the tenants (luckily getting back my old sim name of Sukka Mire, after the purchaser of SM changed its name, making the SM name available again). However, more announcements by Linden Labs were to change things for good.
In early April 2008 LL announced drastic price changes on the purchase of new private island sims, down from US$1675 to US$1000, and OpenSpace sims down from US$420 to US$250. They also announced the release of more Mainland, and promised to review prices again in the third quarter of 2008.
Land prices dropped, tenants left to take up these attractive offers, and I was onced again faced with a 50% occupied sim, and losing money once more. New entrants to the rental market could afford to charge less rent, having less capital investment to amortize, the pressure was finally just too much to bear, as I had only just managed to keep my head above water following the 19% VAT hit, I now found myself sinking.
It was time to call a halt.
With a regret that I can only describe as deeply personal, I put up my sims of Hoini and Sukka Mire. I got US$1000 for them (not each, for both!), losing over US$1000 of the original purchase prices in the process. Luckily, the new owner Beady, intends to keep Hoini as it is, and is the reason I chose him to sell them to above the half-dozen other offers I received.
It was at this point that I decided never to put my fate in the hands of Linden Labs again, and I embarked on a new journey, with the up and coming OpenSim software.
As this was to be a new direction for me (while still maintaining a presence in SL, paradoxically as a tenant now in Hoini, rather than the owner), I thought it might be useful to start a blog on this new path, so that others might discover something about OpenSim, OpenLife, OSGrid, RealXtend etc and learn from my experiences purely as a user of this software, as i am no software developer/programmer.
I will post regular updates now to the blog, detailing my experiences in setting up a standalone sim on my own PC, then doubling the population, then inviting others to join me there, then connecting my sim to an opensource grid, such as OSGrid, etc.
The journey begins....