Furniture Rental Solutions

Relocation Furniture Rental Solutions

Workers who go overseas on relocation are often undecided between two alternatives – shipping furniture or purchasing new furniture in the destination country. There is a widespread worldwide third option, which preferable in many cases, and that is renting furniture for a mission.

Among the many arrangements and bureaucracy involved in the process of relocation, there is also the subject of home furnishings in the destination country. Typically, employees debate between two alternatives: shipping furniture and electrical goods abroad or purchasing them in the new place. Each option has its advantages and disadvantages, but there is a third option that is usually not taken into account – renting the necessary equipment and furniture for the family’s stay abroad. Comparing the costs of the three alternatives shows that when the mission length is up to two years, renting furniture has a clear advantage over the other options.

Finding a place to live is one of the first challenges faced by employees sent abroad with their families for long periods. In most cases, since the mission lasts 2-3 years, the company does not buy the property but rather rents it. Apartments are usually rented unfurnished (or partly furnished). The possibility of renting a fully furnished apartment (an executive apartment) is usually ruled out due to its high cost (approximately 30% to 50% more than the price of an unfurnished apartment).

 

Advantages vs disadvantages

As mentioned earlier, Israelis who travel abroad resolve the issue of overseas residential furniture in two ways: shipping furniture from Israel or buying furniture abroad (in many cases, it’s a combination of the two). The latest relocation policy survey carried out by ORI found that 94% of Israeli companies cover the cost of shipping cargo for employees and 72% of them also provide employees on relocation with a $5,000 to $20,000 grant mainly for the purchase of furniture and electrical appliances.

 

Throughout the world, however, renting furniture for relocation is becoming more and more acceptable. A survey by ORC among international companies showed that 34% of companies allow employees to rent furniture for the duration of the mission.

 

In order to compare the profitability of the three alternatives, we created a table summarizing the advantages and disadvantages of each option:

 

Cons

Pros

Option

– Not in line with the local housing standard
– Waiting period (one to two months)
– Possible damage to the cargo
– Having to deal with customs

– Keeping existing equipment
– Recognition of the cost for tax deduction

Shipping cargo (by sea) from Israel to the destination country

– Not in line with the Israeli housing standard
– Not recognized for tax purposes
– The need to store the furniture left in Israel

– the local standard

Buying furnishings in the destination country

– The need to store the furniture left in Israel

– In line with the local standard
– Recognition of tax cost

Renting  furnishings in the destination country

 

A crucial consideration in deciding which of the three alternatives is the best option is of course the cost. This factor is influenced by many variables (mission destination, the quality of furnishings, the quantity of furnishings, the cost of furnishing in the specific destination country etc.) and therefore analysis is needed for each case individually. The following analysis compares, for example, the costs of furnishing solutions for a couple with two children relocating to northern California:

 

Option Type of expenditure Total cost by duration of mission – in dollars
1 year 2 years 3 years
Shipping cargo (by sea) from Israel 20 foot shipping container (from Israel) $7,200
40  foot shipping container (back to Israel) $11,100
Insurance $1,800
Temporary housing (until the arrival of the shipment) $7,200
Appliances (different standard) $3,600
Total cost

$30,900

Buying Furniture (including grossed up) Buying furniture $14,300
Buying appliances $5,700
Buying bedding, housewares, miscellaneous $4,800
300 kg of air cargo (back to Israel) $1,700
500 kg of air cargo (back to Israel) $2,300
Israeli storage (25 cubic meters) $3,000 $6,000 $9,000
Total cost $31,800 $34,800 $37,800
Furniture Rental 300 kg of air cargo (back to Israel) $1,700
500 kg of air cargo (back to Israel) $2,300
Renting house contents $13,200 $22,800 $31,700
Israeli storage (25 cubic meters) $3,000 $6,000 $9,000
Total Cost $20,200 $28,800 $40,700

 

As shown in the cost analysis, the furniture rental alternative enjoys a clear advantage when the mission period is up to two years. For mission periods of three years or more the shipping alternative enjoys a clear advantage ,while the alternative of buying furniture is also cheaper than renting it.

 

In conclusion, as we have shown, there are advantages and disadvantages to each of the three alternatives. Cost analysis is recommended in each case, taking the individual and the family variables into account.