Help with tips - multiple players in same place

Hello everyone, I’m here to ask you for help or a tip for my game.
I’m gonna explain:
Imagine that each player has their own house and that they cannot see or interact with each other like THE SIMS.
I thought of 2 methods:
1. Determine a coordinate for each house on the map for each player, so if the maximum number of players in my game is 50, then I would have to place 50 different positions away from each other so they don’t see each other or interact.
Example: https://i.imgur.com/tXOD2GN.png

2. All houses would be in the same position, but it will be “Client Side”, that is, only the determined player will see their own house and will not be able to see other players (just make them transparent and without collision).
Example: https://i.imgur.com/rqQX6r1.png

Problems I thought of:
Method 1: With the game full, 50 houses on the map with 50 players can be cumbersome as all players will be rendering everything unnecessarily.

Method 2: 3D sounds are played only by the server and therefore you cannot play a 3D sound just for one player but all players nearby will hear it and this is a problem.

Any other tips on what I could try?

Try instance streaming

I’m not sure what you mean by “3d sounds”, but if you play a sound on the client it will not be heard by other players. Jump and walking sounds will still play, though. I wouldn’t recommend this method anyway.

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You do both solutions, you place each player away from the others in their own location, but you also only render the inside furniture etc… of the houses on the client.

You can play 3d sounds on the server, but have it only play for the area of the player it is intended for.