Rentals: Was Dealers, Prep, real success

[Wimblees@aol.com]

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In a message dated 6/9/03 6:37:08 AM Central Daylight Time, 
cedel@supernet.com writes:

> Friends,
> 
> >From time to time I've wondered if I could build a successful piano rental
> business.  Is anyone on the list doing this?  Is it worth the hassle?  As I 
> get
> closer to the typical retirement age I try to think of ways I can establish 
> a
> continuing stream of income while freeing up more time for volunteerism or 
> even
> the possibility of not being able to carry the workload I do now.  Any 
> helpful
> comments regarding aspects to remember and possible pitfalls?
> 
> One possible misconception I have is that renting pianos, especially to
> customers who keep renting them for years, seems like taking advantage of 
> the
> clueless, who would be better off going out and buying one.  On the other 
> hand,
> I can see the point of short-term rentals for people who move around a lot 
> and
> don't want the headache of moving the piano, but then there would be a lot 
> more
> piano moving involved, something I'm not particularly excited about.
> 
> Regards,
> Clyde Hollinger
> 

Clyde

I had a rental business for 5 years in St. Louis. I had the same idea as you 
did, that it would be my retirement income. The concept is great, and it can 
work. but there are some pitfalls. If I had to do it over again, I would do 
some things different.

First of all, you need a large a mount of cash to buy the pianos in the first 
place. Yes, money from the rent of pianos can be used for this, but if you 
buy pianos with the rental income, then there is nothing left for retirement 
income. 100 pianos, at an average of $300 each, is $30,000. You also need money 
to pay the movers. And you might also need money to buy parts, and maybe a 
refinisher to do touch ups. 

Not all of the pianos are going to be out on rental all the time, so you need 
a place to store and show the pianos. Even if you only have 5 or 10, you 
still need a place to put them.

One thing I did wrong is that I made the piano available for sale. If I was 
going to do it again, I would never have allowed my rental pianos to be sold. 
If people want to buy a piano, either make an arrangement with a local dealer 
who would give the rental customer a discount based on how long they rented a 
piano, or try to get a franchise for a lesser know good quality piano 
manufacturer, to sell new ones. 

And last, you need someone to watch over the store. If this is going to be 
your retirement plan, you don't want to work it. So you need someone to do all 
the paper work. And believe me, there is a lot of paper work, even with only 
100 pianos. Income needs to be logged, and letters need to be sent for people 
who forgot to send in the rent. Then there are going to be the few people who 
never send in the payments. I stopped my rental program 2 years ago, and I have 
5 renters who owe me money. Legally it is very difficult to get them to return 
the piano, or pay the back rent. 

You also need to have someone with technical knowledge to tune and repair the 
pianos. Again, if this is going to be your retirement income, you don't want 
to spend all your time tuning and repairing the pianos. The person who does 
the paperwork can also be the technician. But it needs to be someone you can 
trust, and can do good work. 

I'm not trying to discourage you to get into the rental business. But before 
you do, think about the cost invloved and the consequences. Again, if I had to 
do it over again. I would have taken the $20,000 I took out of savings to 
start my rental program, and invested it in stocks. I probably would have more 
money now. 

Wim 

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