PROPOSAL: Buy a year, get some months FREE

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Han Held
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PROPOSAL: Buy a year, get some months FREE

Post by Han Held »

Hiya

A lot of you have met Lyubov in Neufriestat -she's developing and running a little yoga studio in Neufreistadt, on Ulrikastrasse. (if you haven't been, you should see it -she's friendly and what she's done with the space is awesome)

She has bought one large parcel in NFS and last night her and I discussed her buying another one. The one she's discussing buying is P200, which is larger.

She's willing to pay for a year in advance (which would be an investment of roughly , however she wants 4 months free in exchange.

Each month is approximately $20, 4 months would be $80; for $80 we'd be getting $240 and the assurance that someone has that plot for a year and four months.

I've been buying land in SL since 2010, I know that it's not uncommon for people to offer discounts. Usually that discount will be a lower amount of rent (say, L$200/week).

I'd like us (YOU) to write up either some sort of policy or law that addresses bulk discounts of this nature. That way when this situation comes up again (and hopefully it does) the Estate Managers (and Chancellor) will have something to point at that says "this is the parameters I'm working with".

Elements that must be addressed by this law or proposal would be:

Amount of time bought in advance required for a discount. In most places which offer discounts it's typically that if you pay for 4 weeks in advance they'll either kick you one week free or reduce your rent. At least that's been my experience as a renter.

Amount and type of discount: Do we want to offer a reduced tier in exchange for paying for a year in advance? Or do we want to offer a "by X months get Y months free" deal?

Rental account type: Institutional memory is a thing, but not a reliable one in a place where the government you rent from in one January is composed of different people than the one you originally paid rent under. What I mean is how would we want to mark these accounts? This might be something to do in Caspervend, but what if (like Hippovend) it goes down?

Refund Policy: this will need to be addressed in a fair manner. If someone pays for a large chunk of time they need to be assured that it isn't simply going down a well, at the same time we don't want to refund "free months" and lose money that way.

I'm willing to chip in and advise on this, if necessary; but I don't feel I have a heck of a lot of expertise. I feel that this is a policy that if set up could help us draw in and keep people for a longer amount of time, so I would really like to see the RA and the SC get together and draft something so that EMs can add it to their toolbox ...and so that we may possibly use it in our promotions.

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Re: PROPOSAL: Buy a year, get some months FREE

Post by Callipygian »

Hi Han!

This really isn't a matter for the SC to get involved since the SC doesn't draft policies or laws.

Since the Chancellor has, as part of the responsibilities of the Executive, the task of recommending cost of land and any necessary increase or decrease in tier, you can present a proposal to the RA suggesting this, with or without input from whomever you choose. Someone you might want to consult would be Sudane, since keeping track of prepayments or handling refunds would be part of her duties.

Some random thoughts that aren't based on being in favour or against this, just observations: I am not sure how many people are in a position or would choose to pay for a year in advance, so this is unlikely to be a frequent thing; perhaps having the Chancellor present each case on an individual basis to the RA, with the recommendation of approving, might make more sense than adding another law to the books.

What would you see as the investment needed for prepayment discounts -a year prepaid, 6 months, 3 months? What percentage of income is it prudent to discount by 25%? Will it be seen as 'fair' that those who can afford up front payment pay a lot less tier overall than those who can't.

Calli

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Re: PROPOSAL: Buy a year, get some months FREE

Post by Sudane Erato »

I'm opposed to any discount in tier for paying for multiple months. I think that offering such a discount comes out of a misunderstanding of SL land economics... so I'll try to explain.

If I go to the supermarket to buy paper towels, I expect to pay less per towel roll if I buy a larger pack of them. The store offers this incentive to pay more and get "even more" because a lot of their cost is not really directly in the cost of pound of paper, but rather in the advertising, the packaging, the shipment. It really cost them very little more to provide a 12 pak of paper towels than it does a 2 pak of towels. Certainly not 6 times as much. So I save per towel roll by buying the 12 pak, even though I'm spending more money. I'm happy; the supermarket is happy.

But land in SL is different. The CDS pays a steady US$1070 every month, month in and month out, for our land. And we collect tier from our citizens every month in order to make those payments to LL. If someone decides to pay for more than one month, that's absolutely fine... they are simply paying for future months of tier expense that we will owe to LL. If, for whatever reason, we decide to charge someone less for their tier, we are simply collecting less for that inevitable monthly tier bill that we have to pay LL.

And I think we all know the problem we currently have in the CDS regarding money. The CDS is in some ways a wealthy community (relatively speaking!). We have a hefty bank balance, which we've managed to collect from surpluses over the years. But times have changed, and anyone can see from looking at the data:

https://docs.google.com/spreadsheets/d/ ... 1615174755

that the CDS has struggled with break-even finances for several years now. The result of lowering someones tier, for whatever reason, simply makes it harder to reach break-even, and more likely to run a deficit.

Some might say... sure, but collecting ANYTHING on that land is better than collecting nothing. Perhaps. But then you've gone into a totally different "deal" than arguing for the economics of bulk sales. There are no economics of bulk sales for land. But if you want to simply collect anything... anything... just to have land occupied, on the argument that SOME money collected is better than NO money collected, then I say that you're gambling, and hoping that the day after you lock up tier on that parcel for 75% of its value, someone else doesn't come along and offer 85%, or even 100%. No... I don't favor that approach.

I'll be happy to try and explain all this better. But I hope maybe you get my basic position on this. Our tier should be set, and everyone should pay the same, no matter how many months ahead they want to pay.

Sudane...........................

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Sylvia Tamalyn
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Re: PROPOSAL: Buy a year, get some months FREE

Post by Sylvia Tamalyn »

Very well explained, Sudane, and I agree with your position. I want to add a couple of things, as well.

First of all, the fees charged in CDS are *extremely* competitive as it is. I have rented at more than a few places over there years, some very successful and some not so much, and I can truthfully say that CDS is the best bargain I've ever found. There simply is no need to lower or make deals with the rent here. There's no "fat" to trim from our land rental fees. If someone wants a perk for paying far in advance, well... I'd say that their "perk" is having dibs on a very competitively-priced parcel for whatever length of time they are paying for.

Also, though I believe what Han said about seeing this done elsewhere, I've never rented in a place that offered such a discount. I wonder how long the places that do so survive. As Sudane said, the fees paid to LL each month do not get discounted, so it is a gamble as she noted. I have to wonder if, aside from the "gamble" factor, if it's also just too big a pain in the rear to administer this sort of plan. I may no longer be an EM, but I still think like one. ;) If people are allowed discounts for advance payments, then you need to think about all the contingencies that might arise and how you would handle them. What if they want to leave early? What if we want them to leave early? What if we need to change the rent amount for some reason (like when prim allowances were increased for NFS)? What if...

I have no official position in CDS, but for what it's worth, I am not in favor of this plan, even though I could pay less money for my little parcel if it came to be. I don't think it is a good thing for CDS in the long run.

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Han Held
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Re: PROPOSAL: Buy a year, get some months FREE

Post by Han Held »

Sudane Erato wrote: Sat Aug 18, 2018 4:22 am

I'll be happy to try and explain all this better. But I hope maybe you get my basic position on this. Our tier should be set, and everyone should pay the same, no matter how many months ahead they want to pay.

This appears to be the consensus from pretty much everyone I've heard from; so that's what I'm going to go with.

Thank you :)

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Re: PROPOSAL: Buy a year, get some months FREE

Post by Rosie Gray »

Han Held wrote: Sat Aug 18, 2018 2:04 pm
Sudane Erato wrote: Sat Aug 18, 2018 4:22 am

I'll be happy to try and explain all this better. But I hope maybe you get my basic position on this. Our tier should be set, and everyone should pay the same, no matter how many months ahead they want to pay.

This appears to be the consensus from pretty much everyone I've heard from; so that's what I'm going to go with.

Thank you :)

Glad to hear it. I didn't want to appear to be pouring water on anyone's ideas, but I'm definitely not in favour of it either.

Since when are you not an EM, Sylvia?

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Sylvia Tamalyn
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Re: PROPOSAL: Buy a year, get some months FREE

Post by Sylvia Tamalyn »

Rosie Gray wrote: Sat Aug 18, 2018 6:21 pm

Since when are you not an EM, Sylvia?

Since about a month ago! The CDS grapevine must be on summer vacation. lol

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Re: PROPOSAL: Buy a year, get some months FREE

Post by Shep »

Also not in favour of discounts for extended tier payments ... I already pay the max time I can for my parcel and it's never crossed my mind that it should earn me a discount .... as others said CDS is not expensive to start with, so leave it as it is gets my vote :)

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Re: PROPOSAL: Buy a year, get some months FREE

Post by Han Held »

Shep wrote: Wed Aug 29, 2018 1:31 am

Also not in favour of discounts for extended tier payments ... I already pay the max time I can for my parcel and it's never crossed my mind that it should earn me a discount .... as others said CDS is not expensive to start with, so leave it as it is gets my vote :)

Thank you, Shep. I'm definitely going to listen to the majority on this issue.

If there's any doubt let me say it directly; I withdraw the proposal. 8)

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Re: PROPOSAL: Buy a year, get some months FREE

Post by Brian Livingston »

The only way for this to work is actually to look at this inversely, if this is the desired course of action. Instead of discounting rent below tier for longer commitments, you should be increasing rent on parcels for less than a set term such as 6 months or a year. We know what the break even is for our sims, so set a 12 - 18 month lease as the base rent, and increase the rent for shorter term rentals.

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