Guide to Second Life Real Estate: Buying and Selling Land in Second Life

When virtual land baron Anshe Chung (the creation of real world couple Ailin and Guntram Graef) became the first millionaire from profits made in a virtual world last year, the business press went into a frenzy. The May 1, 2006 issue of BusinessWeek even featured the avatar on its cover for her prowess in making money in the online game, Second Life, created by San Francisco’s Linden Labs. Many are shocked at the amount of money spent buying and selling land made of pixels, but the number of virtual land transactions made in Second Life increases daily. Those who play the game regularly, and there are 5 million registered accounts, want a place to call their own. As a matter of course, Second Life residents buy land, put up houses and shop carefully for furnishings. After all, they want everything to look great when they invite their Second Life friends over, and it's important to keep up with the Jones next door.

There is money to be made in virtual land, but like real land deals, success goes to those who do their research and plot their strategy. Second Life real estate is its own animal, and to be successful, you must learn the rules that govern land transactions.

Action Steps
The best contacts and resources to help you get it done

Buy vs. Rent

Not all land that appears to be up for “sale” is equal. To actually “own” land in Second Life, you must buy it directly from Linden Labs (usually referred to by residents as "the Lindens") or from a resident who is willing to turn ALL rights over to you. Many residents will buy large parcels of land, subdivide them and say they are “selling” it to you, while retaining ultimate rights of land ownership. In that case, you are only buying a lease, and should the resident decide to evict you, you have absolutely no recourse. (How to understand if you are buying or only leasing is further explained throughout this Guide.) Although this has never happened, Linden Labs has made it clear they will not step in to help you. Also, some land you “buy” from residents may have a covenant that prevents you from transferring to another owner. When in Second Life, right click on the land in question and closely read the information in the category “About Land” in the window that pops up.

I recommend: Learn more about wheeling and dealing in Second Life land on the Second Life web site.

Who Can Own Land

Most people begin Second Life with a free account, but to buy land directly from Linden Labs you must have a premium account for which you pay $9.95 per month and receive a small monthly stipend. If you are told that you are not required to have a premium account to buy land, then you are essentially just renting it from another resident, even though they may call it a land sale.

I recommend: Check out the Second Life membership plans.

Form a Group to Buy and Sell Land

You may want to go into the land business with someone else, in which case you will want to form a group to own land.

I recommend: See how you can own land with others by forming a group.  

Buy at auction from the Lindens

The Lindens usually have land parcels of various sizes up for auction. This is a great way to get land, just be sure you understand what you are buying. All the land for auction is listed on the Second Life web site. After you select a parcel, bid the maximum amount you wish to pay, and the auction will bid for you until you reach the maximum bid amount you entered and the auction is over.

I recommend: See the list of land Linden Labs has up for auction. But before you bid, read the auction FAQ.

Buy an Entire Island

Want to build a nightclub and sell residential parcels surrounding it? Sounds like you may want to buy an island. Islands can be ordered with a choice of six different topologies from Linden Labs. They are delivered in anywhere from a few days to a couple weeks. Many make money buying islands, then divide them up into smaller residential or commercial parcels they sell at a profit. Islands are currently priced at US$1,675 for 65,536 square meters (about 16 acres). Monthly land fees for maintenance are US$295.

I recommend: Find out details on how to buy an island. Once you are ready to buy, go to this map, click the area where you want to buy and order one! You can pay by the U.S. credit you used when you set up your Second Life account (credit card or Pay Pal) or you can pay by wire transfers.

Buy Land from Other Residents

Residents are always putting plots of land up for sale. (Be aware of the warnings in this Guide regarding "buying vs. renting".) You can see what is currently on the market (owned by both the Lindens and residents) by checking out Second Life's in-world map which indicates land that is for sale. Also check the Classifieds within Second Life. At the bottom of the screen, click on the Search button, then Select the Classifieds tab. From there, select Land Sales and hit Search. Be aware that land owned by residents that they rent or “sell” usually has covenants that dictate what you can and cannot do on that land. Land may be zoned as residential, commercial or mixed use. (If you are buying an island, of course it’s your choice.) Some land may be in a region with a theme, such as ancient Rome or 19th Century Tombstone, Arizona, and you must build within that theme.

I recommend: In addition to checking the Classified within Second Life, see the Seond Life Land Sales and Rental Classifieds Forum.

Land Use Fees or “Tier”

Once you buy land, that’s not the end of your financial obligations. Once you own more than 512 sq. meters of land (a parcel only big enough for a tiny house crowded against the neighbors), Linden Labs start to charge you a monthly land use or “tier” fee. A “tier” fee is based on the amount of land you own, but it is discounted as you acquire more. Land use fees are billed based on the peak amount of land held during your previous 30 day billing cycle, so be aware of this as you buy and sell, or you may be in for a nasty surprise at month’s end.

I recommend: If you are REALLY buying and not just renting land, you will pay your tier fee to Linden Labs. If you are paying “tier fee” to another resident, sorry, but you are just renting.

How to Sell Land

Like real life, you need to advertise and market your land. 1) Place a classified ad within Second Life for the specific land in question. 2) Place an ad in the Land Sales and Rental Classifieds Forum. 3) Put a sign on the land itself. You will be amazed how many people fly by. 4) Put up an ongoing classified ad listing yourself as a real estate broker and have a landmark that enables people to come to your office and get information. 5) Network! Make an announcement or send notices in Second Life groups to which you belong (be sure they won’t consider it spam) and put yourself out there as a a player in the real estate business.

I recommend: Want to see how Second Life land deals are done in the big leagues? Visit Anshe Chung's web site.

Tips & Tactics
Helpful advice for making the most of this Guide

• Protected Land: If you can find land that is adjacent to Protected Land, it will be easy to sell. Only the Lindens can build on protected land (such as for waterways and roads), so if you buy next to protected land, you can rest assured your nice view will remain and no one will build a monstrosity next to you.
• PG or Mature: All land in Second Life is rated PG or Mature, and the activities and degree of nudity that will be tolerated are governed by this rating. Of course, if you buy your own island, you can determine its rating.
• Prims: In Second Life, it’s not all about the amount of land or the view. It’s also about the amount of “prims” that land will support. “Prims”, short for “primitives” are the building blocks used to create Second Life goods and furnishings. The more prims you have, the more plants, furniture and rooms you can put on your land. And the more land you have, the more prims it will support.
• Make it easy for people to buy land from you. Often people see a classified ad listing interesting land find it all but impossible to track down the owner. If you are serious, consider setting up an office in Second Life where people can go and view land listings and leave messages for you. Check your email regularly (which of course you must tie to your Second Life instant messages) to see who contacted you while you were offline. In your classfied ads and the signs at your office, list the times you are available as well as the avatar names of employees who can help potential buyers when you are unavailable. People will generally work for miniscule amounts within Second Life, so help is affordable. To make it even easier for your customers, put up a web site featuring your land listings so people can shop with you even when they are not in Second Life.