Hi! I’m Kyle, the Penny Hoarder.

I've got some creative ways to fix your budget.

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How to Make Money Buying Virtual Real Estate
Virtual Beach House on Second Life

by - August 12, 2013 - 16 Comments

For Sale: Luxurious, seaside bungalow. We guarantee that the structure will never need re-shingling, re-siding, a new furnace, a new water heater or foundation repair. Appliances will never break; you’ll die before they do. Property’s unique arrangement makes it so that you will never need homeowner’s insurance, gas and electric, garbage pickup, property taxes or water.

Best of all this real estate is so cheap, there’s no need to start Googling refinance rates and mortgage brokers. So, who’s ready to buy?

This is not a deal that is too good to be true. Anyone can go out and make a real estate purchase like the one listed. Although, did I forget to mention that the house doesn’t technically exist except in a computer game that you play online?

I’ll stop my sales pitch, because I just lost many of you. While you may not be interested in spending money on virtual real estate, there are hundreds of thousands who play online video games and would jump at the opportunity.

Today’s weird business might be about pretend products, but the money earned is very spendable and just as green as any bills found in physical cash registers.

Anshe Chung, the First Virtual Real Estate Tycoon

For Ailin Graef, the game Second Life wasn’t just a virtual world where she’d escape the doldrums of reality through an alter ego. The game was a place for her to use her computer and design talents to build and develop virtual real estate for other players. Those talents were worth millions.

The game Second Life created a complete virtual world for players. Kind of like a more realistic and open-ended Sims game. One of the game’s features was the use of an online currency called Linden Dollars that could be converted into actual money. Since the game currency had real value, astute players could use their unique game talents to earn real income.

With a mere $10, Ailin Graef created an avatar named Anshe Chung who came to control 36 square kilometers of virtual land in Second Life, worth over a million in real dollars. Chung’s empire started with small virtual real estate purchases which were subdivided and redesigned with chic landscaping and architecture, then sold to other resident avatars. Virtual real estate success gave birth to a real company staffed with 20 to 25 employees. (Source)

What We Can Learn from Ailin Graef

Lesson #1: Your Talents are Worth Money

You might have goofy talents, but those talents can be worth millions. For Ailin Graef, she was proficient in her use of the Second Life platform and had an artistic eye for virtual architecture. I’m confident that neither of these talents would have impressed a crowd at any given cocktail party, but who cares? Technology opened a worldwide market for her talents.

Since the beginning of time, entrepreneurs have battled basic business constraints: how do I reach my market and how will my market reach me. Technology is reducing the difficulty of both these constraints. When you think about these basics you can see how traditional commerce made selling your talents difficult.

If you had really amazing Rubik’s Cube skills and wanted to give lessons, how would you reach the thousands of interested trainees spread across the world 30 years ago? You might be able to write a book if you could find a publisher. Today, there is any number of ways to sell your talent. You can create You Tube videos with advertising, a virtual class, an eBook, etc.

Lesson #2: Solving a Consumer Problem is All the Reality You Need

Although Ailin Graef’s talents were virtual, she fulfilled a vital role for Second Life players. Building your own property in Second Life required a great deal of time and effort from new players. Players could spend a small amount of money and receive a pre-built virtual home instantly.

Consumers have an endless supply of problems and they are just waiting to pay someone to arrive at a reasonable solution. It’s your mission as penny hoarders to find those answers. Succeed in this process and earning money won’t just be a dream, but a reality.

Good luck Penny Hoarders!


 

  • Bev

    So is this virtual money that we are spending?

    • The Penny Hoarder

      Well, yes and no. Folks, like the one featured in the article, earn/spend/trade virtual money (Lindens) in the game, however the virtual money has a real USD value. Players can buy/sell their Lindens on the “Linden Dollar Exchange” for real money… Crazy, I know!

  • Dana

    Could you possibly post a link to this game? I foun this article very interesting as I have similar talents. I play alot of the sims games mainly just to go crazy decorating and building elaborate layouts and such,lol. I would love to try this game! Thanks
    P.s. I love your blog & have made a bit of money from a few of your articles! Keep them coming!!

    • The Penny Hoarder

      Thanks Dana! You can find the game at SecondLife.com. I’d love to hear what you think of it…

      Kyle

  • http://www.velvetchickenblog.blogspot.com Jen

    I’ve been on Second Life for 2 years now and while I haven’t created anything….yet ;) there are many people who make real money creating and selling clothing,avatar skins,furnishing and lots more besides making money on virtual real estate like you mentioned above!

  • Phil

    I’ve been in Second Life for over 5 years, during which I made US$4000-5000 a month from virtual furniture. When Anshe started, and some years later later when I started, there really was good money to be made from it, but not by very many people. However, times have changed over the years, and it isn’t like that any more for new virtual businesses in Second Life. It’s still possible to make some money but the days of a lot of money for more than just a few people are long gone, I’m afraid.

  • http://everythingfinanceblog.com Tushar@EverythingFinance

    I had created my Second Life account a few years back but did not do anything with it. Maybe its time to revisit :)

  • http://prairieecothrifter.com Miss T @ Prairie Eco-Thrifter

    This sounds too good to be true. I am definitely going to have to check it out.

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  • http://www.moneyahoy.com Derek @ MoneyAhoy.com

    This is such a crazy cool story! It must feel awesome to get in on the ground floor of something like this!

  • Inventive_Exile

    But if she were allowed to design actual real-estate without a degree, she would have easily been able to prove her worth and would have made MUCH more money. The system doesn’t want you to succeed without paying homage to your masters. The virtual world is the escape from our horrible society.

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