03 November 2006

Rent or Buy? Run your own numbers!

I downloaded the November 2006 issue of SL Business magazine. It has several interviews, a tutorial on animations, a comic. Very pretty thing, colorful layouts, even the ads (with one glaring exception) are a pleasure to look at.

I was looking at the article on p32, "Buy or Rent." Spinning numbers is all about good marketing, but wow reading that made me shake my head. Obviously written by someone wanting people to rent. They're ignoring stipends in the calculations, and assuming that everyone pays their membership fee in the most expensive way.

Like the article, I used US dollars, and went with the assumption of L272 = $1. When you include stipends in the calculations, and take into account the monthly cost of the different membership payment methods, you get more interesting results. I ran the numbers for all three current versions of stipends - 300, 400, and 500. What stipend an account gets depends on the date the account was made.

If you pay membership, you pay no tier for the first 512m lot. This has some interesting effects on the numbers. Here. And the spreadsheet for those with a Google account.

Yes, you saw right. If you're paying yearly, own 512m or less, and are on the 500 or 400L/week stipend, you're getting paid a little interest. The examples on the sheet aren't the most effective use of tier; after 1024m2 they aren't optimized to get the most out of your tier.

I can't change your stipend. And only you know what payment plans you're comfortable using. My numbers here don't take into account the purchase cost of land, the risks involved in renting, or of having your credit card number in somebody's database, or investing in virtual property. *wink* Feel free to work those out on your own.

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