In search of what to rent next? Maximize investments by using rental solutions

As most of my regular readers of this column have come to know I'm always looking to find out what goods and services can be rented. I'm famous for saying, "Did you know what you can rent, usually in response to "who rents office furniture?" Stay with me here and I'll get around to answering this question in more detail at the end of this column. In my last issue I let you know some examples. For instance Legos offer rentals. And we also discussed in high end couture women's fashion for instance why it makes great sense to rent instead of buying, designer hand bags, which can be rented for an event for $50, instead of purchasing one bag for $1,500! So, you can make a high impact designer statement when you walk into your event, and save a lot of money! Of course, there really is no end to what can be rented, since just about everything you can imagine, cars, trucks, boats and even planes. Although for airplanes perhaps one would be wise to just rent the number of hours one needs to get to his destination, and let an expertly trained pilot actually perform the tasks of transporting you. United Rentals, a publically traded major corporation with headquarters in Stamford, CT, is the major industry leader for heavy equipment that is construction related. They offer all kinds of mechanical lifts, cherry pickers, generators and other mainstay construction project items. Why buy a Caterpiller or John Deere monster earth mover for seven figures when you can rent one for as long as your project requires, and when the project is complete, they pick it up and take it off your hands. It just makes more sense for you to maximize your investment dollars on other more important expenses like the labor to perform the construction instead. Renting is a financial alternative to making an upfront large investment in whatever it is you or your company requires. As an example looking at renting office furniture, instead of making capital outlay for everything. When you choose to rent, and only pay for what you're using on a monthly basis, there are a lot of situations that frankly make more sense than purchasing. A company that's just getting started as an example, may not have perfected its business model, and might still need some time to test the accuracy of their financial forecasting. Are revenues coming in as fast as projected, and are expenses right where we estimated they would be, or are we behind in both categories? By renting instead of purchasing, a company conserves capital while they're in the developmental stage, so when it looks like the business model will be a success, the extra cash flow can be directed towards a long term purchase. I know there are some doubters out there convinced that purchasing is always cheaper than renting or leasing, but until you run the math, you'll never know for certain. We've seen the bar cross at anywhere from 18 to 24 months, and it varies depending upon so many variables, that you have to do the analysis to know for sure. In general, unless you're going to be in a certain location for at least 60 months or five years, you really should look at a rental option. IRS rules stipulate that you must amortize your furniture investment expense over 60 months. This means you take 1/60 of the total expense as opposed to being able to expense 100% of the monthly rental costs each month. You can see how this might have a powerful impact on a start-up company's bottom line during its initial first year in business. Our company, AFR recently completed a rental for a Wall St.-based firm that was growing rapidly, and wasn't quite sure when they should move to brand new space, so they did an interim move to larger space while they continued to shop for alternatives. We were there to help. In the meantime, so that they could continue to service their customers and continue to be operational and grow even larger, they chose to rent for 12 - 18 months in what they now call their new "swing space." In all, some 38 employees were comfortably accommodated using a combination of office cubicles, private office furnishings including desks, conference tables and chairs. A complete office outfitted with rental furniture. Now you know that people in the know, those sophisticated buyers or the cognoscenti of the corporate world, are not the least bit intimidated by their decisions to maximize their investments by using rental solutions when appropriate. There's your answer. As we promised now you know who rents office furniture and why! Ron Lanzo is the commercial account executive for AFR Furniture Rental, New York, N.Y.