By Alvin Daniel, Business Development Manager
Increased efficiency, zero-cost maintenance, and no capital required
Property Managers, owners/operators of multi-family and commercial properties, and investment companies with property in their portfolio can receive many benefits by leasing HVAC equipment. Benefits that they wouldn’t receive if they financed the equipment or bought it outright.
Increased efficiency, access to the latest top-of-the-line equipment, zero-cost maintenance, and freeing up precious capital to use in other important parts of their business are some of the benefits that come to mind. But did you know that leasing can also save millions of dollars? Let me show you how.
Let’s use the example of a multi-family housing development replacing the aging tankless water heaters in its 304 units. In this example we’ll examine the benefits to the owners of the development (and its tenants) that are exclusive to leasing.
In our example, the total cost of the lease over the entire term will be $1,427,160. The breakdown of that cost is a $55.89 average monthly leasing cost across 304 units over an 84-month lease term.
Compare that to an upfront cost of $903,431 ($852,293 of capital and $51,138 in taxes). At first, leasing seems to be the significantly more expensive option, but let’s dig a little deeper to see how leasing could save the owners of this development almost 2 million dollars over the life of the lease.
Immediate Energy Savings ($638,400 total savings)
One benefit of leasing is that it allows commercial property owners and managers to select the equipment that works best for them without the upfront cost being as much of a concern. In our example, this freedom to choose the best equipment results in a $25/month per unit energy savings. In addition to the financial savings, tenants get to enjoy equipment that may be better than what might otherwise be possible if the capital to purchase that equipment had to be laid out upfront.
Service and Annual Maintenance Savings ($521,360 total savings) + Depreciation ($852,293 total savings)
With leasing, ALL service and annual maintenance are included and you will never have to come out of pocket for the entire length of the lease, ever. Those 3 AM maintenance calls on Christmas morning that your facilities manager had to deal with will be a thing of the past! GHL will take care of that and we’ll work with you to schedule maintenance at a time that is convenient for you.
You will also be able to enjoy the tax benefits of depreciating equipment during the lease.
Interest Savings – $311, 238 Total Savings
Unlike financing companies, we do not charge interest. That means that if you lease with Grand HVAC Leasing, instead of financing, you will be able to redirect the money you would have spent otherwise paying interest, to other places in your business.
Replacement Savings – $885,362 Total Savings
In this scenario, not replacing the aging Water Heaters also comes with a cost, except, instead of getting all-new, top-of-the-line equipment all at once, the property owner would be forced to replace the existing water heaters as they fail. And the way things usually go, this equipment tends to fail at the most inconvenient and inopportune times.
Leasing eliminates that headache and allows you to start saving money on energy costs on the first day of the lease.
Total Savings – $1,781,493
In this scenario, leasing saved the property owner $1.7 million (and that is on the low side). Tax savings were not included in our calculations and in addition, monthly lease payments are usually tax-deductible.
If you are interested in learning more and obtaining your free quote, contact us today to talk about how we can help your business SAVE.
Contact us today!