Six Ways to Buy a Kitchen Appliance

by John Wilhoit Jr. on

Scale.  The real issue with any capital expenditure is scale.  With respect to appliances for multifamily, do you know your annual expenditures on a property by property basis?  If the answer is yes then buying options are easier to qualify.  Real estate investing is best accomplished with economies of scale. Buying power for appliance purchases is one of many examples. 

For stabilized multifamily everyday appliances include stoves, dishwashers, refrigerators and microwaves (built in).  Unlike disposals and locks, unless there is secure storage on site, keeping reserve appliances on hand is seldom a good idea. It’s amazing how often a refrigerator can “grow legs” if left un-attended for several months. Here are a few options for just-in-time appliances.

Buying Used.  For stoves, electric and gas, used stoves can be a good buy assuming they look good.  There are few moving parts and replacement parts are easy to come by.  For all other appliances going the used route is much more difficult. Refrigerators have a mind of their own once moved around a few times and determining age is sometimes difficult.  Microwaves and dishwashers are just too inexpensive brand new to consider a used appliance considering the labor involved for install.  

Refurbished.  Great for stoves, no so good for refrigerators.  Stoves have  just a few moving parts so if the item is structurally sound, and tested, then refurbished stoves can be a great buy. For refrigerators, like buying used, having to replace even one delivered item can be a major inconvenience for everyone including your tenant.

Home depot vs. Lowes.  Toma-toe, tomato; pick your vegetable.  When prices are similar it is the people that make the difference.  My suggestions is to stick with those that provide you with the best service, selection and price- in that order. Great prices without good people backing it up has a higher costs in the end. 

Bulk purchase from manufacturer. With appropriate credit accounts established, GE will deliver right to your door.  Most manufacturers have specific credit and volume requirements to assure their major retail outlets remain competitive.  In other words, selling direct to you has to make business sense without under-cutting their bread and butter re-sale customers.  

Local Appliance Supplier.  They have great buying power on the local front. In most circumstances they can procure a better pricing from the OEM (Original Equipment Manufacturer) than you can. Give them a chance.  Sometimes the best deal is right under our nose. 

Mail Order/Drop shipper/Direct from Manufacturer.   Using distant product providers requires strong operators and strong relationships.  The issue is returns and shipping; the hassle factor for returns and the costs of shipping.  Best used for parts rather than full, free standing appliances.  Can work out well for small orders of boxed goods or with new construction.  

Side bar to carpet… Manufacturer direct can work well with carpet, but even here its necessary to have a very clear understanding  of product specifications.  For example; ordering three hundred yards of “oak leaf” carpet requires that the entire delivered product is from the same exact production run to assure 100% color match.  Accepting delivery of two 150 yard rolls from two separate production runs may leave you with two similar, but different colors. 

Auction Houses.  All sales final.  Buy at your own risks.  Kind of like “Storage Wars” your purchase is of unknown quality.  Even “new in the box” purchases can have damage. 

About This Blog
Multifamily Insight is dedicated to assisting current and future multifamily property owners, operators and investors in executing specific tasks that allow multifamily assets to operate at their highest level of efficiency. We discuss real world issues in multifamily property management and acquisitions. This blog is intended to be informational only and does not provide legal, financial or accounting advice. Seek professional counsel.  For more information, visit: http://www.MultifamilyInsight.com

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