How does AE work?

Hello all! I've tried Googling this, but I'm not getting clear answers, so I'm going to try here, if that's ok.

How does one actually make money in AE? I understand you buy virtual land parcels, but then what? Google says you earn money by Rent, but who are you renting to, and what are you renting? Renting space, but for what? People don't live on virtual space, or build houses. I'm so confused.