How to Best Finance Furniture in a Short Term/Vacation Rental

Question

Hello everyone,

My wife and I are looking to buy a STR and only have enough for a down payment, we were wondering if anyone knew of a way to get financing for the furnishings of the house. Is it possible to use a small business loan if we have an LLC or a personal loan that isn't crazy on interest so we can get started?

Thanks!

Paul Sandhu · Answer

You can try one of those Rent A Center places.  They rent out furniture, appliances and electronics.  Unfortunately, they will eat all your profits.

I get all my furniture and appliances from estate auctions. $1000 will get the 4 appliances and enough furniture for a 3BR house. Occasionally I'll get an HDTV or a grill. Once I got 175 pounds of
#7.5 and #9 lead shot for $150. I shoot a lot, and reload.

Grigory Pekarsky · Answer

The best way to finance furniture for a short term or vacation rental is by using an online peer-to-peer lending platform. This option offers lower interest rates than traditional financing and has flexible terms which make it the ideal choice for financing your furniture needs. Whether you need to furnish a new property, update existing furnishings, or simply replace worn out items; you can find the best possible funding options that fit your specific situation.

The use of peer-to-peer lending platforms  offer borrowers:

• Lower interest rates than traditional financing (5% – 36%)

• Flexible repayment terms (3 months – 5 years)

• Funding in as little as 2 days

Here's an example of how peer-to-peer lending can help you:  Let's say that you want to finance a $10,000 sofa and arm chair package for your new home. In the past, this might have been a several month process as you set up furniture financing through a local bank or other traditional lender. Today, however, with the use of lending platforms as a funding source you could have those same pieces of furniture delivered in as little as 48 hours from submitting your loan request.

David M Trapani · Answer

Look for an STR that is already fully furnished turnkey, or at least partly furnished. Alternately, I agree with Brendon - Ask your bank if they will give you a 0% interest credit card. Try to get as much as you can stay up to $25,000 or more. I have done this several times run up a card to furnish  / decorate the house (if not already furnished), and then pay it down aggressively within a short period of time. I think with most of those cards, so long as you pay them off within 12 months there’s zero interest. Which is basically free money!

Brendon Brooks · Answer

@Tristan Walton

Hi Tristan, if you can get approved for a 0% interest credit card introductory offer for a year, this can be a viable option. However, you have to have a plan to have it paid down within a year to avoid the high interest rate. Best of luck to you!

Joe Splitrock · Answer

Every furniture store in my city offers 0% interest on furniture. Be a little careful here. It sounds like you may not have enough capital for this business and that can be risky. You may find that long term rental is more profitable once you subtract out furniture, utilities, etc. Run the numbers both ways. Short term rental is a job so include your time.

Jason Fitzwater · Answer

@Tristan Walton Talk with your mortgage lender and see if there is anything they can do to increase your note amount to cover the cost of the furnishings.  You will likely need to amend the sale agreement so that the furnishings are not being sold separately but included in the cost of purchasing the property.

David M Trapani · Answer

Good morning Tristan,

As you’re in the market, hope you won’t mind my sharing...

I currently have two (excellent) fully-furnished (turn-key) STR pool homes listed in your target areas. One is in 3/2 in La Quinta on a prominent & private corner lot with privacy wall (gorgeous views of the Santa Rosa mountains) close to Old Town La Quinta amenities asking $628,000. The other is a 3/2 mid-century modern (designed by famous Palm Springs architect McNaughton) on a commanding & very private 1/3 acre lot with views of Mt. San Jacinto and Mt. San Gorgonio asking $699,000. Please let me know (pm is fine) if you or someone you know may be interested. My agents are Lisa Molinar and Jorge Sanchez.

Cheers & have a great weekend.

David

Todd Goedeke · Answer

@Tristan Walton , different method to control a business property, lease the house  triple net, and buy the furniture outright.

Robert Gilstrap · Answer

Amazon and Wayfair both offer financing for purchases. I have a company that has sent me multipl eadvertisements that finances and revenue shares on furniture. They do the install and design, then you pay based on the income it brings in (with a min of course). Trying to find their info.

LOT of furniture places out there will do this. Some have entire divisions devoted to it (CORT furniture has a STR division).

Also consider contacting staging companies and working out a revenue split. They have LOTS of furniture that mostly sits in a warehouse not earning any return on investment so they might be willing to work a similar deal.

How to Best Finance Furniture in a Short Term/Vacation Rental

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