Ten Ways to Save a Bundle on Your Next Lease
According to the Equipment Leasing Association ("ELA"), U.S. businesses lease every thing from laptop computers to commercial airplanes, racking up more than $ 200 billion in equipment leased each year. Although four out of five U.S. companies use leasing to acquire equipment, many don’t know the ins and outs of leasing well enough to negotiate a good deal. By focusing on a few key aspects of the lease transaction, you can save a bundle on your next lease and eliminate potential aggravation.
1. Choose the Right Leasing Partner
The starting point for saving money on your lease is to select the right leasing company. The biggest savings in this area come from saving time and dodging substandard lease transactions. The wrong lessor choice can result in a slow approval, inability of the lessor to deliver, hidden fees, a poorly designed lease transaction or worst. Give this aspect of obtaining a lease your highest priority. To save a bundle on your next lease, you must do your homework in pre-qualifying bidding leasing companies. Look for lessors with: 1) experience and knowledge; 2) good reputations; 3) the ability to perform; 4) helpful business contacts; and 6) a relationship approach. Ask for and get lessor financial information, background information on the key managers, a listing of recently completed leases, and contacts at key funding sources for each leasing company being considered. Review this information and follow up with all contacts provided.
What Happens When the Anchor Tenant Moves and You Are On a Ten-year Lease?
Recently there was an article in the Houston Business Journal of the anchor store in many shopping centers through out Houston pulling out. Kmart, took out some stores, so did three other big box stores and a few consumer electronics places and larger furniture stores, now Albertson’s has left. Who gets hurt? The franchise stores who pay a high price and lease to be in those centers along side a big anchor tenant. Think about it, Albertson’s with their large super stores with Banks in side, Starbucks coffee, bakery, mini eating area, film developing and pharmacy. Soon in Western States where property and land permit, on site carwashes too and also some already have fuel for your car, when you are a club card member. What if you had an MBE, Quiznos, Subway, Dry Cleaning, Travel Agency (as if things are not bad enough already), GNC, Hobby Town, Cost Cutters, etc.
Smart Car Leasing for Beginners
Car leasing is extremely popular because it provides an attractive method of driving an automobile that you might not otherwise afford. It allows you to make lower monthly payments than with traditional car purchase loans. About one out of every four vehicles driven by automotive consumers in the United States are leased.
But leasing is not for everyone. You should take the time to learn about leasing, and be sure it’s right for you before making a decision.
What is Leasing
While a purchase loan is a method of financing the ownership of a vehicle, leasing is a method of financing the use of a vehicle for a specified time period. As much as it sounds like renting, leasing is different.
A lease is a formal contract with a leasing provider that allows you to drive the provider’s car and only pay for the portion of the vehicle’s value that you use up during the time you’re driving it. You agree to pay for insurance, licenses, taxes, repairs, and maintenance.
The leasing provider retains ownership and title to the vehicle throughout the lease. At lease-end you can simply return your vehicle to the provider, or you may purchase the vehicle and continue driving it.
Interim Rent: Equipment Leasing?s Trap Door
Many lessees enter into lease transactions that they believe are competitive based on faulty rate assumptions. Most lease rate calculations don’t take interim rent into consideration. Interim rent is the trap door that allows lessors to receive increases in lease pricing. It is unpredictable and the amount can be arbitrary. By understanding how interim can impact your lease, you can close this trap door and enjoy the lease pricing you thought you negotiated.
What is Interim Rent?
Interim rent, also known as stub rent, is the rent that a lessor charges a lessee from the time the lessee accepts the leased equipment until the official lease start date. Most leases start on the first day of the month following equipment acceptance. In a lease with monthly payments, interim rent is calculated as follows: multiply the number of days in the interim period by the monthly payment amount and divide the product by 30. In the extreme case, interim rent can add almost a full periodic payment to the lease. In these cases it lifts the effective lease rate dramatically.
Using Equipment Leasing as a Competitive Weapon
Most great generals know how to design winning battle plans. They also know how to use their resources to gain advantages over the enemy. For these military leaders, getting enough tanks, aircraft, ships and armaments into the hands of the right personnel can spell military victory or defeat.
In the business arena, gaining access to certain resources and getting them into able hands can also determine success. Many successful business leaders have discovered that equipment leasing can make a significant difference when competing in the marketplace. In fact, equipment leasing has become a competitive weapon for business managers who understand how and when to use this helpful financing tool.
Here are some ways savvy business owners and managers use equipment leasing to gain advantage over their competitors:
Developing a Financing War Chest
Equipment leasing allows companies to finance more activities to compete effectively. It supplements other forms of financing, such as equity capital, bank debt, trade credit and mortgage financing. Astute business managers understand that access to a variety of useful financing affords them certain options and gives them an advantage over competitors with limited financing.
Maintaining State-of-the-Art Technology
Landlord Tips And Tricks
Every real estate investor dealing in rental homes has done his own clean-up and fix-up, at least in the early years. Landlords also become very skilled at managing tenants after being burned a few times.
You learn the tricks of the trade and how to get the best results for the least cost. Maybe a few of these tips will be new to you.
You can give kitchen cabinets new life with a liberal application of Liquid Gold.
Everyone has at least one chip or scratch in the porcelain on their refrigerator, bathtub, stove (except high heat surfaces), sink, washer or dryer. The solution? Touch up that nick with a tough porcelain glaze called “Porcelain Chip Repair”. Just dab it on with the built in brush and it hardens in 24 hours. If your hardware store does not carry it you can find it with a Google search.
You can quickly clean black scuff marks from vinyl floor covering with a squirt of WD 40 lubricant and a rub with a clean cloth.
Put a shiny new strainer in the sink drain. Then install new handles and drawer pulls and you often have a minor kitchen miracle.
Lease Contracts - The Meaning of Joint and Several
When you see the phrase “joint and several” in a legal document or contract it means that that the parties on one side of the agreement are responsible individually and collectively for the terms of the agreement.
Example: In the case of two tenants signing a lease agreement, “joint” means they are jointly responsible for the rent.
“Several” means that their joint relationship is severed.
In a contract it indicates that they have agreed that they are also responsible individually for the rent. If one does not pay his/her share of the rent the other is responsible for the entire amount.
Here’s an example of a landlord who had a “joint and several” lease with the added provision that tenants must pay rent with a check, money order or cashier’s check in the full amount every month.
Landlord allowed the two roommates to pay half the rent each month with two separate checks. Bad policy.
It not only creates accounting problems… but if one tenant pays on time and the other is late how do you handle the late penalty? And…
Leases And Tenants - The Spooky Tenant
You, Mr. Landlord are pleased to find qualified tenants for your rental house. The man and woman sign a one-year lease on Tuesday.
On Thursday the male tenant contacts you and says they have changed their minds because his girlfriend thinks she sees “dead people” in the bathroom.
He expects you to cancel the lease!
What do you do, hire an exorcist?
No, you smile and softly explain… “Listen Bub, that was a legal contract you signed. It binds both of us to everything printed on those sheets of paper…. the laws says so, that’s who!
And that’s true… both parties must agree to break a legal contract… it can’t be done unilaterally (usually). In this case the contract is the well prepared, solid gold lease.
Is your reluctant tenant on the hook for an entire year’s worth of monthly lease payments?
It brings a tear to the eye of we hard boiled landlords… but he probably is not obligated to pay rent for the entire year.
Courts have ruled that the landlord has to make a good-faith effort to find a new tenant for the unit as soon as possible.
Getting Your Venture Lease Approved
Each year venture capitalists fund more than 2,500 start-up companies in the U.S. Many of these companies try to conserve their equity capital by approaching venture-leasing firms to secure equipment financing. By obtaining lease financing, these savvy firms are able to use their equity capital for high-impact activities like recruiting key personnel, product development, and expanding their marketing efforts.
What are the qualities that make some start-ups more attractive than others to venture lessors? Here are ten factors that most venture lessors evaluate to decide which start-ups to finance:
Caliber of the Management Team
Most venture lessors consider the start-up’s management team to be the most critical success factor for the venture. Though it can be challenging to quickly evaluate management talent, there are several qualities that venture lessors consider. They look for experienced managers with high integrity and a proven history of business performance.
Quality of the Venture Capital Sponsors
Another important factor for most venture lessors is the quality of the start-up’s venture capital sponsors. Venture lessors look for experienced venture capitalists with successful investment performance over a number of years. The venture capitalists should also have good reputations for dealing fairly with creditors serving their portfolio companies. Before entering new lease arrangements, most venture lessors verify that the start-ups’ venture capital sponsors are actively supporting them.
So You Want to be a Landlord?
The residual income from owning rental properties may bring more money into your life than the fast flip in the long term. If nothing else, the stress is reduced because a well-chosen investment will pay for itself until you the market is ready for you to sell. In order to make this idea work, you must plan carefully. Choose your property, choose your management approach, and choose your tenants carefully to make the most of your investment.
Choose your property.
Not every house is going to bring in the money you need each month. Some considerations:
Will you be financing? How much you finance is going to have to be factored in to how much you need to cover the monthly expenses. Up to four units is considered a residential loan by most banks; beyond that is commercial, which means that the lender may factor in the rent more easily as income, but other, more stringent requirements must be fulfilled to secure a loan. The more equity you have now, the more able you are to weather periods of vacancy.
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