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Follow up on "More Tips for Staging Model Units" (Purchasing vs Renting Furniture)

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Home Stager with Stage to Sell - LA Home Staging

I know I promised that my next post would be the eagerly anticipated "Tips for Staging Multiple Models in One Complex" but after fielding an offline question from the amazing Michelle Minch I felt I had to post a quick follow up to my recent post "More Tips for Staging Model Units."

As I covered in the original post, models will generally be on the market longer than a regular home (6-12 mos or more depending on how many units are in the development). I mentioned that it is a good idea to ask your furniture rental company about discounts for longer term rentals. However I forgot to mention another very important option:

Consider purchasing the furniture instead of renting.

Of course if you own your own furniture inventory you are probably saying, "DUH!" about now. But many of us have chosen (for various reasons that constitute a WHOLE other post) to rent our furniture from outside sources, rather than purchase it. 

If you are one of those who rents your furniture it is likely you will at some point find yourself in competition with Stagers who own their own inventory. Though you may meet or beat their upfront 3 month pricing, you cannot compete with their renewal costs. Many Stagers who own their own furniture drop their monthly renewal rates to a flat $1000/month after the initial lease term is up. (This per-month rate may be different in other parts of the country, but here in Los Angeles this is the number I most often hear.) Despite your competitive bid on the upfront lease, the developer may have no choice but to go with the less expensive renewal option since his model could be on the market for a year or more.

So for those of us who choose to rent versus buy, this may be the time to make an exception. The reasons are simple:

a) The price of purchasing the pieces, when amortized over the length of a typical model lease term (6-12 mos) may actually be equal to or lower than renting the comparable items.

b) Many models are sold furnished, so you may be able to actually make additional cash off the sale of the items you purchased without ever  having to deal with removing the furniture from the unit! When you provide your quote for the Staging, consider including a "buyout" price to the developer so that if he's asked by potential buyers about purchasing the model furnished, he will have the price already in hand. He may even decide to mark up his purchase price to include the furnishings. Either way he will have the info he needs. You should also stipulate exactly what the buyout price includes (for example: furniture and rugs, but not art or accessories) so that you don't get stuck giving up your favorite silk tree or vase.

c) If your client does not want to purchase the items once all his units have sold and you have a storage unit or an empty garage at home (HAH! What Stager has an empty garage?) you can de-Stage the property and then sell the furnishings on Craig's List or StagersList to make something extra off the sale of these pieces. OR who knows, these pieces could be the beginnings of your own rental inventory if you so choose!

 

Coming soon...

Tips for Staging Multiple Models in One Complex   (Seriously this time.)

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Annie Pinsker-Brown | Stage to Sell
Owner & Principal Designer
310-384-1084
www.stagetosell.biz

"We get you to SOLD so you can get on with your life!"

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Stage to Sell is the premier West Los Angeles Home Staging Company.

Owner & Principal Designer Annie Pinsker-Brown is an ASP (Accredited Staging Professional), a member of IAHSP (International Association of Home Staging Professionals), an affiliate member of the Beverly Hills/Greater Los Angeles Association of Realtors and a member of the Culver City and West LA Chambers of Commerce.

Annie has Staged LA homes for Bravo's hit show "Million Dollar Listing" and TLC's "Property Ladder." She has also been featured in recent articles on Home Staging in Los Angeles Magazine, The New York Times, Costco Connection and Frontiers Magazine.

If you would like to see more of our Home Staging work, visit our website. There is an extensive gallery of before & after photos, as well as a list of our Staged properties currently on the market.

 

Allegra Dioguardi
Styled and Sold Home Staging and Staging Training - Westhampton Beach, NY
Home Staging & Training, Suffolk Co. Long Island

All good points, I'm glad to see that stagers are giving model home companies (my past incarnation) a run for their money!

How about establishing accounts with furniture vendors? Or do you purchase the furniture retail?

 

Nov 10, 2008 09:33 AM
Annie Pinsker-Brown
Stage to Sell - LA Home Staging - Los Angeles, CA
Stage to Sell, Los Angeles Home Stager

Allegra, Good idea to establish accounts with furniture vendors to cut out the middle man. Since we don't do this as often as say a model home company (those of us who rent vs purchase) we probably wouldn't have much pull. But it never hurts to ask. I have bought some things on Overstock.com and the rest from a local vendor who gives us good prices. Thanks for your comment!

Nov 10, 2008 11:37 AM
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

Annie, I think this is a wonderful idea to ask them to purchase the furniture and if you can scout out good finds at discount it would actually save them money over renting.  I think it's a win-win situation for everyone.

Nov 10, 2008 03:08 PM
Michelle Minch
Moving Mountains Design Home Staging, Pasadena, CA - Los Angeles, CA
Home Staging Los Angeles and Orange County, CA

Annie: I'm glad you posted about this. As you know from our phone call, I am bidding on a total of 4 models (3 from the same builder) and a big house foreclosure that I expect will be on the market longer than most due to price, location, size (10,000 sq. ft.) and other 'issues'. It is less expensive and less stressful for me to rent from an outside source for houses I expect will sell in 3 months or less. But in cases where I expect the rental term will be longer, I cannot compete with stagers who drop their rental fees to $1,000/month on a long term basis. So I am now faced with purchasing 5 dining rooms, 5 living rooms, 13-16 bedrooms, multiple family rooms, etc. I'll do what I have to do to keep these clients happy as I have done several projects for one of the builders and he has several more nearing completion and I don't like to turn away work if I have the capacity to do it. I hope my American Express card doesn't melt!

I'll keep you updated.

Nov 11, 2008 01:34 AM
Robyn Guinn
StageAZ - Phoenix, AZ
Home staging, Arizona

Great information, I do like the flexibility of having my own furniture.  I wish we had Brooks out here I would probably utilize them.  All we have is Cort and options are very limited.

The problem with owning your own furniture is when they sell and it all comes back!  Space is now my biggest issue.  I'm on the fence about getting a warehouse or not, I'd love to but hate spending the money.

Michelle M. I would love to be out shopping for all of that furniture!  What a blast, heaven to me!!! You go girl!

Nov 11, 2008 01:59 AM
Allegra Dioguardi
Styled and Sold Home Staging and Staging Training - Westhampton Beach, NY
Home Staging & Training, Suffolk Co. Long Island

It really is a conundrum....to own your own inventory or to lease. Inventory makes you more competitive price wise and you can respond more quickly but I have a concern regarding trying too hard to use your inventory for future jobs. For instance, putting a dining table with seating for 6 when a seating for 8 is more appropriate and shows how large the room is, kind of like trying to put a square peg into a round hole.

Nov 11, 2008 02:14 AM
Annie Pinsker-Brown
Stage to Sell - LA Home Staging - Los Angeles, CA
Stage to Sell, Los Angeles Home Stager

Carole, so true. I hadn't thought about just having the client purchase the furniture. I was thinking more along the lines of us purchasing it and renting it back to them the way we normally would so that we continue to make the rental $$ off of it. But your idea is a good one too.

Michelle, yes you really got me thinking on that one. WOW that's a lot of furniture to buy! You should check the limit on your AMEX. I once went over one month and my limit is $20K! That was a big month. :) You may have time to increase your limit. 

Robyn, as I said this discussion is for a whole other post!! :) Space is one HUGE issue. Another is the moving, cleaning and liability for the movers. With a rental company they take all that on. I know Stagers locally who spend $1600/month on storage alone. In a slow market that is a killer. But with only one rental company in your area I know it can be limiting. In our area, CORT just brought in lots of new stuff. Might want to check them out again if you ever need something.

Allegra, it's true that sometimes if you own something you try a bit too hard to make it work for your next job to free up space and keep yourself from having to purchase something new. It's not always the best solution for that particular property. For me it's all about the fact that furniture rental is a WHOLE other business that requires its own staff. I'm in the business of Staging, not renting and moving furniture. But again, it's something each Stager has to decide for him/herself.

 

Thanks for commenting everyone!

 

 

Nov 11, 2008 02:41 AM
Beth Lester
Beth Lester Designs - Torrance, CA
Home Staging & Interior Decorating

My very first job was to stage a townhouse in a 4-unit complex.  The realtor was paying for everything.  I did a cost analysis and found it took about 5-6 months for him to break even to purchase the furniture rather than buy it.  We are currently using that furniture on a 3rd property - which is his own flipper.  It has paid off for him to buy it.

Nov 11, 2008 03:25 AM
Annie Pinsker-Brown
Stage to Sell - LA Home Staging - Los Angeles, CA
Stage to Sell, Los Angeles Home Stager

Beth, thanks for the comment. Sometimes it definitely makes sense to buy!

Nov 11, 2008 08:09 AM
Maureen Bray Portland OR Home Stager ~ Room Solutions Staging
Room Solutions Staging, Portland OR - Portland, OR
"Staging Consultations that Sell Portland Homes"

Annie ~ Thanks for the series on staging model units ... very helpful info for us.  I too think that sometimes it's better to buy the furnishings if the staging term is longer than 6 months.  In some markets, rental furniture is much more reasonable so it's important to compare owning vs renting in each local market.  I'm looking forward to your next post in this series!

Nov 12, 2008 05:10 PM
Annie Pinsker-Brown
Stage to Sell - LA Home Staging - Los Angeles, CA
Stage to Sell, Los Angeles Home Stager

Maureen, thank you very much for your comment. It is definitely something that needs to be analyzed on a project-by-project basis. Thanks!

Nov 13, 2008 06:31 AM
Julea Joseph
Reinventing Space - Chicago, IL
Julea Joseph House Stager - Reinventing Space

When I 1st started doing Models I always used a Rental Company, but as I have gotten more experiencedI have alwayspurchased rather than rented.  In the Midwest, Models stay active for at LEAST one year, and then are sold w/the furnishings, or will be moved to another development if still in style or in-tuned to the next model design.  I really like having control over the products I choose, and from feed back from the builders, they like ownership. 

On that same note, NO product is purchased until cash is in hand. Learned that lesson a long time ago - Never be the bank.

Nov 13, 2008 10:19 PM
Refreshed and Refined Property Presentation Specialists
Columbus, OH

Annie,

 

Great post I am hoping to convert more of my business to model homes.  Builders are looking for less expensive ways to furnish and Staging gets it done.  Purchasing has its challenges though for me: storage and hiring guys to move it all.

Thanks again, I look forward to your future posts.

your friend in Staging

Jodi

Nov 13, 2008 11:13 PM
Annie Pinsker-Brown
Stage to Sell - LA Home Staging - Los Angeles, CA
Stage to Sell, Los Angeles Home Stager

Julea, good point about not purchasing any furniture until you've been paid!

Thanks Jodi. I too struggle with all that's involved with purchasing furniture. So it has to be the right circumstances.

 

Nov 14, 2008 10:09 AM
Sandra Hughes
Redesigned Spaces - Northern Virginia - Fairfax, VA
Redesigned Spaces - Fairfax County, Virginia

Good post, there are so many things to take into consideration when trying to figure out what the best move will be.  I would love to have a storage unit of my own furnishings in it but that hasn't happened yet but hopefully before to long.

Nov 15, 2008 08:01 AM
Annie Pinsker-Brown
Stage to Sell - LA Home Staging - Los Angeles, CA
Stage to Sell, Los Angeles Home Stager

Sandra, yes as many have pointed out there are good reasons to buy and good reasons to rent. Everyone has to weigh the pros and cons of each particular situation. Thanks for commenting!

Nov 15, 2008 10:46 AM
Michelle Finnamore
Toronto GTA, Alliston, Newmarket - Vaughan, ON
Preparing your property for sale

HI Annie, I think you have some very good ideas in regards to puchasing the furniture and selling it afterward. So far,  I use 4 different rental companies to get a different look for each property.

If it is an occupied home, I have the clients purchase the furniture if possible and then let them know that I will buy it from them at the end of the staging for a set pre-determined price.

This way I build my inventory of furniture at great prices (less than wholesale) and then I rent it out on another job at a very reasonable price beating out my competitors every time.

Nov 17, 2008 09:17 AM
Annie Pinsker-Brown
Stage to Sell - LA Home Staging - Los Angeles, CA
Stage to Sell, Los Angeles Home Stager

Michelle, that is another great tactic for an occupied home. It helps you build your inventory with pieces you KNOW will be used. I'm curious though, why not buy it yourself and then rent it back to them for 20% of the purchase price per month. So at that point you've already recouped 60% of the cost. Seems it might be easier than having the client purchase furniture directly. But either way, it's a great idea.

Nov 17, 2008 01:24 PM
Michelle Finnamore
Toronto GTA, Alliston, Newmarket - Vaughan, ON
Preparing your property for sale

Hi Annie, I have the clients buy the furniture as sometimes they are thinking that they will keep it for the new house. Most often, it doesn't suit the new house so I buy it from them. It's a funny thing- your taste changes when you buy a new home. They buy to suit this house and then it isn't suitable for the new one.

It actually works out much cheaper for me to buy the furniture from them as I have given the price I am will to pay for the item up front. I have done my research on the cost I would pay new. Most often it works out that it is better for me to buy it after and then start renting it out.

Nov 18, 2008 12:38 AM
Annie Pinsker-Brown
Stage to Sell - LA Home Staging - Los Angeles, CA
Stage to Sell, Los Angeles Home Stager

Ahhh, that makes a lot of sense. It's true that something you buy for one house may not always work for another. Thanks for following up!

Nov 18, 2008 02:39 AM