When You Should Lease Your Gym Equipment
Whether you are a real estate developer, property owner or company with office space, the need for a dedicated wellness space is imperative in order to attract and retain the highest quality tenants, residents and employees. As new high-rises continue to pop-up and workspaces are re-imagined, the fitness amenity has evolved into one of the differentiating factors that separate residential properties in a saturated market, and employers' work culture from their competitors.
The cost to develop the wellness space can far exceed a pre-determined budget. Between creating a functional layout and providing a versatile selection of equipment, designing (or redesigning) an adequate fitness facility for your residential or commercial property can come at a hefty price tag.
This leads to the pivotal question: Should You Lease The Gym Equipment?
The short answer is: it depends on your needs.
Leasing has its advantages and drawbacks. It can be an important option for a cash-strapped property owner or a company looking to offer the newest fitness technology.
Let’s explore the considerations that can help determine if leasing the gym equipment is the right option for you and your facility.
Do you need to conserve working capital?
Are you looking to take advantage of tax benefits and a lower monthly payment?
It’s easier to make a monthly payment rather than budgeting for a large capital purchase every few years. If you choose a tax lease, you will have lower monthly payments and may have the ability to write off your monthly lease payments for the term of the lease.
If these factors are important to your bottom line, leasing the gym equipment may be a better option for your facility.
By leasing, you also have the option to purchase your equipment or turn it in at the end of the term. This allows you to stay up-to-date with the latest technology and features, which pays dividends when it yields a higher rate of retention between tenants and residents.
Certain pieces of equipment are known to require more servicing than others. Cardio equipment, in particular, can become costly to maintain once it exceeds its warranty period. With a lease, you avoid these inevitable costs.
When considering a gym equipment leasing company, pay particular attention to the type of purchase option for the end of the term. Some companies may sell your lease to another company; therefore, be sure you have the proper contact information of your leasing company.
The most common leases are a Tax/FMV Lease and a Capital/$1 Buy-Out Lease, with terms ranging from 36-60 months. You should consider leasing cardio equipment separate from the strength equipment, since the strength equipment has a longer life (unless it has electrical components).
A typical gym equipment lease will require a minimum of 2 monthly payments plus a documentation fee when signing the lease documents. Once a Tax/FMV Lease is up, you have the option to turn in the equipment or purchase the equipment at the end of the term. With a Capital/$1 Buy-Out Lease, you own the equipment at the end of the term.
Of course, other considerations need to be taken into account.
Designing the right facility requires a deeper look at your demographic, floor plan, timeline, aesthetics and other elements. Even choosing the right amount and particular pieces of equipment can change the entire dynamic of your wellness space, often times reducing costs while improving offerings.
FitLink specializes in this very niché. We source gym equipment from multiple vendors, and are masters of gym functionality. We are fitness professionals that management the project from concept to installation.
Contact us to go over your wellness space design and redesign needs.