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THE AIRBNB CONSULTANT - CONTACT US
https://calendly.com/airbnbconsultant/15min
In this episode of the Airbnb Nomads toolbox, Alex talks about whether or not you should buy your furniture outright or finance it. This is not just choosing between two different ways to pay. Which option you choose is going to have a significant impact on cash flow and the profit you will make in the long term.
Which decision is best for you depends on what is going on in your business at that particular point in time. Alex talks you through the pros and cons of both approaches and explains how to weigh them up to choose the best option.
KEY TAKEAWAYS
Furnishing an Airbnb property is not cheap, especially if you are buying for a 4- or 5-bedroom property. Even furnishing a one-bedroom flat will cost £5k+.
Which approach is best very much depends on where your business is at the time. Starting with whether you have money available in the bank.
How you finance your property has operational as well as financial implications.
When you buy your furniture outright you are 100% in control.
There are long-term benefits when you own your furniture outright which Alex shares during the episode.
Even if you buy a furnished property you will usually have to replace that furniture to make the accommodation attractive enough to tempt guests to book it.
Financing can allow you to use high-end furniture that you would otherwise not be able to afford. If this allows you to charge more rent it could make a big difference to your profit margins.
When you use financing you end up paying far more than if you had bought it outright.
If you fail to make payments on time you can end up negatively impacting your credit rating.
BEST MOMENTS
“If flexibility and maintaining a healthy cash flow and more important to you right now, financing could be the better option.”
“For some properties where we plan to stay super long term, in great areas that we know are going to do well, we buy the furniture outright.”
“People aren't going to look after that furniture like they do their own stuff. Okay? So, yes, you're going to have to replace stuff, and that means more money out in the future”
“The decision should align with your overall business plan and long-term vision, your budget and your long-term goals.”
HOST BIOS
Alex & Pooh have built a portfolio of over 16 Serviced Accommodation Units and 10 Buy-To-Lets collectively over the last 5 years.
This AirBnB Business has allowed each of them to create their own tailor-made ‘lifestyle by design.’
Pooh chose to escape the corporate life as an electrical engineer instead to spend his time at home with his young and growing family, and Alex likes to spend most of his time in sunny Spain enjoying his love for road cycling or even hiking in the Tramuntana mountain ranges.
