Refurb decisions made easier by finance alternative
I was approached by a valued client who was looking to refurbish their property and, as is my normal process, we met on-site to discuss their needs.
During our walk through and discussions about the look and feel they wanted, the type of clients they accommodate and their clients’ expectations it became apparent that the property was also in need of building works as well as the furnishings refurbishment. Obviously the property owner was keen to do it all and ensure that they kept up with the new properties and those in the area that had undergone refurbishment, however how can they do this without affecting their cash flow greatly or going to the banks and jumping through the hoops they require?
The answer: A commercial hire purchase option.
What was available to the property was to be able to finance the FF&E component of the refurbishment thus allowing them to use the available cash on building works updating room layouts, joinery, carpets and the building’s exterior.
I was able to include the design component, furniture, appliances and TVs, lamps, window furnishings, crockery, cutlery, beds, bedding, artwork and installation in the commercial hire purchase model. This also allowed the property to purchase higher quality product then they would have perhaps considered should they have paid for the refurbishments in one full payment.
The commercial hire purchase option allows accommodation providers to breakdown the payments into monthly instalments over a five-year period. At the end of the five years, you own the product after a token payment of $1.
Some of the benefits of this offer are:
• Improved cash flow
• Reduced operating cost
• No upfront capital outlay
• Reduced interest costs. More than competitive against bank rates
• One monthly invoice
• No deposit or application fee
• Upgrade now allowing you to maximise room rates immediately. Purchase what you really want without having to compromise
• Payments can be up to 100% tax deductible. (Please seek advice from your tax agent or advisor to confirm level of tax deductibility)
The team of interior design specialists worked with this client to specify sizes and materials used to construct the individually designed furniture pieces and selected fabrics and accessories to accent each piece. I was able to provide 3D renders of each room type. This way the client was able to see what the completed rooms would look like before they were fitted out. This is a great design initiative, allowing adjustments to colours, sizes and positioning as each piece is rendered to scale in a room which measures exactly. Changes can be made easily and it is a great sales tool if you are developing a new property where apartments are sold to independent investors.
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