buying two furniture sets instead of renting, 22k up front against 14,400 a year of rental

Planning four flips next year in a fairly narrow band, 180k to 260k, mostly 1,300 to 1,700 sq ft. Every quote I get for staging lands between 3,200 and 3,900 all in, so call it 14,400 a year at four jobs.

Alternative I'm pricing: buy two full house sets, budget 22k, climate controlled storage at 350 a month, and either rent a box truck at 180 a day or buy a used one. Labor is me plus one helper, two days per install and one day per pull.

What I keep going back and forth on. Four flips a year is not four staging jobs a year in the calendar sense, because two of them will overlap and one will run 90 days, so two sets might be one set short at the exact wrong moment. Also I'm the one moving furniture, and my time on a flip is worth more doing something else.

On paper the buy pays back in about 18 months ignoring my labor. Including my labor at any honest rate it stops looking obvious.

Not sure whether I'm underpricing the storage and logistics or overpricing my own hours.

Answer

1renee_dubois Get yours

The economics of owning inventory work when your sets stay busy. A stager with twelve sets running forty jobs a year has each set out maybe eight or nine months of the twelve. Your two sets at four jobs a year, average 60 to 90 days each, are out maybe five or six months combined out of twenty four set months available. That's under 25 percent of the time in use. You're paying storage on furniture that is sitting still three quarters of the time, and that's before @ledger's replacement number.

The move I'd make instead is go back to the three stagers who quoted you and ask for a repeat client rate on four jobs a year with scheduling committed in advance. Stagers care a lot about keeping sets working for the same reason you should, and a client who books four installs and doesn't haggle is worth a discount to them. I'd expect somewhere between 10 and 20 percent off the walk in number, which closes a good chunk of the gap without you owning a truck.

Revisit owning when you're doing ten or twelve a year and the sets would actually be out most of the time. At four, the rental price is buying you flexibility you'd otherwise have to pay for in idle inventory and your own weekends.

2 replies

3hannah_west29 Get yours

Your 18 month payback is missing a few things. Furniture wears, and staging furniture wears fast because it gets moved by hand up stairs eight times a year. Budget replacement on the soft goods every two to three years, so call it 15 to 20 percent of the 22k annually as a real cost, not a footnote. Add damage and the odd piece that gets scratched into unusable.

Style also dates. A set you buy this year photographs fine for maybe three years and then buyers can tell. Rental inventory rotates because the stager amortizes it across many more jobs than you will.

The truck is the other soft spot. 180 a day times three days per job times four jobs is 2,160, and that assumes you never need it on a day it's unavailable. Buying a used box truck adds insurance, registration and something breaking.

Run it again with 3,500 of annual replacement, 4,200 of storage, 2,160 of truck and your labor at whatever you'd pay someone else to do it. My guess is the payback goes past three years, at which point you're deciding whether you want to be in the furniture business.