How To Calculate True ROI in Mob Wars?
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This is regards to the Mob Wars game on Facebook, specifically the 'City' mechanic. It seems to be assumed that there is no benefit in investing in 'land' vs. 'buildings'. I want to know if that is valid. For those unfamiliar, it works like this: First you can buy any of five types of land (listed here with initial price, and income provided): Empty Lot :: $5K :: $0.1K City Block :: $50K :: $0.3K Downtown Square :: $1M :: $2K Beach Front :: $4M :: $8K Container Yard :: $6M :: $12K The income per unit of land is static. As noted, the price is an initial price. The price charged for a given transaction is P=I + ( n * 0.1I ) Where P is the actual price per unit for a transaction, I is the initial price, and n is the number of units owned at the beginning of the transaction. Additionally, you can buy land (and buildings) as units, or in groups of 5 or 10. Since each transaction increases the cost of the next transaction, it is ALWAYS more efficient to buy in groups of 10. Example: You own 700 Empty Lots. Your income from this land is $70K. The next group of 10 will cost $355K each, for a total cost of $3.55M Next buildings. The mechanic for buildings is almost exactly the same, with one change: Any given building will 'consume' a land. For example, Villas consume Empty Lots, so you must already have 10 Empty Lots to purchase 10 Villas. This almost means that the price you paid for that land is effectively added to the price of the building. Because income per land/building is static while cost goes up, the return on investment (ROI) decreases as you purchase more units. All other things being equal, it would be efficient to purchase from all land types and building types to keep ROI as high as possible for each purpose. However, as noted above, land cost adds to building cost, decreasing the ROI of the building cost more than just the normal cost increase. So: The actual question. Is it ever effective to invest in land, or will the hit to building ROI /always/ counteract the income from land. For reference, the details on buildings are below Building :: Initial Price :: Income :: Land Used Villa :: $10K :: $.3K :: Empty Lot Restaurant :: $30K :: $.7K :: Empty Lot Apartment :: $200K :: $5K :: City Block Hotel :: $400K :: $10K :: City Block Highrise Apartment :: $5,000,000 $50K :: City Block Office :: $16M :: $150K :: Downtown Square Luxury Hotel :: $20M :: $200K :: Downtown Square Beachfront Hotel :: $30M :: $220K :: Beach Front Casino :: $40M :: $300K :: Downtown Square If there are any additional questions, I will answer them the the best of my ability. If the answer varies based on amounts of this or that, I will be happy to have a formula that describes a true ROI for land.
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Answer:
http://enid.afrosden.co.uk/
sapph at Ask.Metafilter.Com Visit the source
Other answers
If the calculator zephyr links to is to be believed, villas and land are always a bad buy compared to buildings.
onalark
So: The actual question. Is it ever effective to invest in landDo you mean "is it ever wise to purchase land other than for the purpose of immediately purchasing a building"? If so, yes, of course it is. Specifically, when the time it would take to recoup the cost of a lot is less than the time it would take to recoup the cost of a building. Note that there is definitely such a point, because the time it takes to recoup the cost of a building always increases (with more buildings purchased), with no upper limit. Still, that purchase of ten lots may make your next best purchase be buildings. But that, in turn, will drive the recoup cost of buildings even higher, and simultaneously drive the recoup time of lots back down to its original level. So you'll soon get in the same situation again - your best purchase is ten lots. Then ten buildings. Then lots. Then buildings. And so on. But eventually, due to the ever-increasing recoup time for buildings and the (essentially) static recoup time for lots, you'll get to a point where it makes sense to buy ten lots and never use them to buy buildings. You will still buy buildings after that, but not with those lots. You'll buy more lots, then buildings with them, always retaining some nonzero number of lots. And in the long term, that nonzero number of lots will always increase, without limit.
Flunkie
@zephyr_words: I have used/examined over two dozen calculators, but none get that deep into the details. @Flunkie: You understand the question perfectly. I believe there IS a point where it will become economically efficient to invest in permanent land - land that will NEVER be used to purchase buildings with. Every single ROI calculator, without exception, assumes that land is NEVER a good investment other than a means by which to buy property. So, the real question is: what IS that point? I'm sure it can be formulaicly determined - I just need to figure out what that formula is. The tricky part, I think, is the long term view. The base price of Empty Lot is, as I mentioned $5K. In groups of ten, this is $50K. This means any purchase of 10x Villas is increase by $50K. But lets say I decide to purchase 10 permanent Empty Lots. This means the land purchases for Villas are $55K. The price for each Villa has increased by $5K, forever. Every time I purchase 10 Villas, I suffer this $5K penalty. Therefore, I can see why there may not be a point where permanent land is efficient - or that point may be far far off. But, I want to know where that point is, if it exists.
sapph
This is my current portfolio:Land Type Income # Owned Total Income Current Cost Turns to pay for itselfEmpty Lot $100 10 $1,000 $10,000 100 City Block $300 10 $3,000 $100,000 334 Downtown Square $2000 10 $20,000 $2,000,000 1000 Beachfront Lot $8000 10 $80,000 $8,000,000 1000 Container Yard $12000 10 $120,000 $12,000,000 1000 ------Villa $300 286 $85,800 $301,000 1004Restaurant $700 225 $157,500 $710,000 1015Apartment $5000 244 $1,220,000 $5,130,000 1026Hotel $10000 245 $2,450,000 $10,250,000 1025Highrise Apt $50000 95 $4,750,000 $52,550,000 1051Office $150000 84 $12,600,000 $151,400,000 1010Luxury Hotel $200000 86 $17,200,000 $193,000,000 965 Casino $300000 62 $18,600,000 $289,000,000 964I do hold the beachfront lot and container yard as investments since I'm forever away from being level 120 (where buildings can be built on them), but on the lot, block and square vacant land types I hold ten for convenience. You can see that I'm just now breaking into the return on investment territory for most of the various land types, where holding land might make some sense. Early in the game the concept of the "land bank" is important so you can stash money out of reach of other players. I'm making $55M every 54 minutes now, so I don't really worry too much about people fighting me and grabbing $100K a shot (if they do it frequently, I put a hit on them, which stops it, generally). But early on, those lost fights can be a real drain of cash. You'll note that each of the properties double in value on the initial investment of ten of a kind. If you sell those ten all at the same time, you get all your money back because they sell at the current price minus 50%. As a bonus, you make a bit of money by holding them, so it's an interest-bearing account. In this way you can stash $50,000 (ten lots) + $500,000 (ten blocks) + $10,000,000 (ten squares) and make a few percent interest, whereas the bank charges 10% to safeguard your money. If you're trying to hold land as an investment, you can't use it as a bank. In short: By the time holding land might make sense from a ROI perspective, you're too busy buying other stuff to bother with it.
maxwelton
Well, I might be at that point already. Here is my current portfolio:Land Type Income # Owned Total Income Current CostEmpty Lot $100 0 $0 $5,000 City Block $300 0 $0 $50,000Downtown Square $2000 10 $20,000 $2,000,000 Beachfront Lot $8000 0 $0 $4,000,000 Container Yard $12000 0 $0 $6,000,000 ------Villa $300 710 $213,000 $720,000 Restaurant $700 550 $385,000 $1,680,000 Apartment $5,000 590 $2,950,000 $12,000,000 Hotel $10,000 600 $6,000,000 $24,400,000 Highrise Apt $50,000 240 $12,000,000 $125,000,000 Office $150,000 220 $33,000,000 $368,000,000 Luxury Hotel $200,000 230 $46,000,000 $480,000,000 Beachfront Hotel $222,000 170 $37,400,000 $540,000,000Casino $300,000 190 $57,000,000 $800,000,000 There is no point when I'm too busy with other stuff. I built my own worksheet to make sure I'm doing things as efficiently as possible - I'm just not sure how to write a formula to account for the long tail effects of permanent land investment.
sapph
I'm schooled by a master. Well, maybe not schooled, but you're a couple of orders above me. Probably at the point you're at, the extra cost of the land as you buy and hold is a relatively minor part of the overall building purchase prices, so you might as well start accumulating it. I know you want your own chart, but the calculator in the first link will at least give you the ROI numbers so you know when to chill on the land versus buildings.
maxwelton
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