I’m frequently asked “So who rents”? I’ve heard this question so often at networking events, that I’ve developed a simple one statement answer; “The same type of individual who leases a car rather than buying one! Furniture rental is an attractive alternative to investing cash in a furniture purchase, especially when your requirement is short term. New starts up firms usually have limited financial resources to devote to the business, they want to maximize their investment options, look closely at rental versus purchase as a solution.
If you’re business venture is not expected to survive the initial start up period, it makes more sense to rent. The U.S. Federal Tax Laws require that capital purchase of furnishings be amortized or depreciated over a five year period or a full sixty months.
You can save a lot of money by renting versus purchasing brand new furniture at a retail location. Many hotels like extended stay hotels find furnished accommodations can be functional and efficient, but these hotels are not personalized. Rental furniture allows your home away from home to be completely personalized. When renting residential furniture you pick the style, the look and feel, and you decide how each room is arranged. Home Stagers work closely with executives’ who move to temporary assignments and can help simplify the process and at the same time provide some valuable design services.
Other benefits and reasons why renting makes more sense for commercial office furniture customers, including cubicles. Let’s look at some situations that clearly make a strong case for renting.
• Short term projects
• Summer intern programs
• Special litigation trials
• Swing space which can be used while an existing office space undergoes construction.
• Temporary Employees
• Office relocations
• Conferences
If you consider some of the benefits of renting versus owning, here’s what you’ll find:
• You’ll conserve capital by not having to make large cash outlays.
• The flexibility of adding or subtracting products as your needs change.
• Tax advantages since rental expenditures may be 100% tax deductible.
• Good investment compared with paying for a depreciating asset.
From a more practical stand point, if your project is short lived, or you’re not sure of the outcome of your new venture, why rent a depreciable asset like office furniture? Due to the current economic conditions; there is a surplus of used office furnishings on the market. There is virtually no resale market for used commercial office furniture, especially cubicles or partition systems. Previously, you were able to get ten to 12 cents on the dollar, and there were buyers who would take them off your hands. Now, you have to pay anyone whose interested up front just to remove these pieces from your facility.
With a rental contract that works much like any lease agreement, you decide what rental term length you need, and you’re only obligated for that period. For instance, if you rent for four months, you are obligated to complete and pay for four months work of rental or usage. After that, should you decide to continue renting, you simply go on a month- to- month basis. As soon as you’ve determined that your requirement has been satisfied, or your furniture requirement ceases to exist, in most cases you pick up the phone and the rental company sends a truck to pick up the product. It’s that easy to terminate the lease.
