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Discussion
9 Years Ago
http://www2.ljworld.com/weblogs/town_talk/2015/jan/23/anderson-rentals-seeks-new-location-expa/
Kind of cool that they tied renting art to hosting the president for dinner. Wouldn't that be a trip.
-- mary ellen anderson
Reply Order
9 Years Ago
That is pretty cool Mary Ellen. I hope your business starts to boom from your newspaper article. I have to admit, the art rental may just work.
9 Years Ago
The reporter did an excellent job of identify the very different rental markets we're going to target. Short-term rentals for props. Rotation rentals for variety, and rent-to-own as a way to finance art collecting.
My dad was a founder of the American Rental Association in the 60's and helped form the industry, which today is over a 50B dollar market. So think my advantage here is I understand to risks of rentals and how to make them tools to aid sales.
I do think that there is work out there for fine artists, but they're going to have to be willing to do the work and not be 'you either eat (buy) what I serve (paint) or starve' attitude.
Hopefully, I'll get more time this year. A lot of personal tragedy last year so I'm behind on getting this moving, but think Lawrence is very receptive.
-- mary ellen anderson
9 Years Ago
Interesting - I have been contemplating contacting churches to place some of my Christian Art on a rental basis. I have a huge number of orphan pieces at home awaiting framing. It would be better to see them hanging somewhere.
9 Years Ago
Sounds great, Karen. With churches you do need be aware of is lacks security and get substantial security deposits. Church members often borrow, rearrange, or move stuff without much security.
-- mary ellen anderson
9 Years Ago
Mary Ellen, that is a wonderful concept, enjoyed the article. I hope its a great success for you. I do have a question, the particular paintings rented out will they be rented out at owner's risk. Will the pieces of Art be insured?
Cheers, Michael Hoard Actor, Artist and Actor.
9 Years Ago
Micheal,
I have different terms depending on the type of rental program: short-term, rotation, or rent-to-own. Security deposits are held by the rental company but they are to protect the artist's risk of loss.
I find it better to build insurance risk into your rental rates. On long-term rentals it's easier to issue a refund for proof-of-insurance naming you, than it is to get people to comply with periodic filing requirements.
But you certainly should be fully aware of the greater risk of loss you run in rentals. Especially with no backgrounds in rentals. You're going to have to think through what your comfortable with? Will you rent to non-local people? Originals or just prints? What is normal wear and aging and what are damages? What will you have to do if they default to recover your work? What are your inspection rights? How do you authenticate that you don't get a fake returned instead of the original? You can do all these but you've got to have done your homework on all the different risks you'd be taking.
Rental is also a service industry. Very often than services like installing, cleaning, restoration, staging, etc are very important to the rental market.
-- mary ellen anderson
9 Years Ago
Thanks Mary for your response. Mary that is a very excellent incentive on your part. It would seem to me that is a more feasible way to avoid individual insuring of the individual pieces which I am sure would escalate your cost from your insurer's business interest. I am sure the cost of insuring would be overwhelming to singly itemized pieces of art but to include the coverage in the contracts involved.
Mary, you might also contact the movie industry and local stage productions in your area. That may also be yet another possible lead to follow, the kick start of your business association for your company (Art to lease) they too will have additional insuring interest on their part also should anything occur with your consigned leased pieces from your customers. Best of success with your new endeavor!!!!!
Have you ever received awards for being the outstanding business woman from your community?
Cheers, Michael Hoard Actor, Artist and Photographer.
9 Years Ago
Mary Ellen,
This sounds very exciting! I would image you would be able to get just about any medium of art you wanted to rent through all your contacts. I might be very interested in such a venture as another way of marketing my work if I had images suitable for the need.
Much luck and good wishes to you and please keep us updated through this forum.
Kathy
9 Years Ago
I happen to be located in Lawrence, Ks, which calls itself the city of the arts. And my dad took the concept of renting and helped found the industry. So I might just be in the right place at the right time, we'll see. I had thought of film production and event staging. The University of Kansas is located here and am I very excited at the reception we're getting. Same with the Chamber, etc.
I've had a very tough start as lost both my mom and big brother last year. And as the article says now I've decided to redevelop the whole block. Beside the rental store, we will also house my physical gallery, as well as are considering tenants. I'm a year behind on where I thought I'd be on remodeling. So I'm scrambling big time now that news is leaking out to get my act together. I had been rummaging through our basement and planning the first garage sale our family has had since 1857, think we're done with the wood ox yokes. And wondering how I can make this into an art event.
Right now I'm still a mess, but it is coming together. We're getting back on our feet anyway. As mentioned rental is a service industry and so I need to hire some help and setup these services and get some outside salesmen in place. But will give you a heads up when I want you to give the concept consideration.
I can also help if you have specifics questions for 'special' circumstances like with your church. And you guys can be a sounding board on my thinking too.
-- mary ellen anderson
9 Years Ago
Mary Ellen with your tactics you will always stay ahead of this new and exciting endeavor in your community and who knows expand. You have claimed this!!!! We will all be cheering you on.
From your perspective you may seem like a mess but in reality you are progressing and that is good news. Let go of what needs to be gone and keep moving along!!!!!
Gosh, has it been a year, I do recall you had informed us of your loss of your mother and then brother continue with the family legacy in memory of them all. I do remember you shared the article of your father founder of the family business which appeared in your local paper it sure was a wonderful tribute.
Cheers, Michael Hoard Actor, Artist and Photographer.
9 Years Ago
Michael,
I will probably self-insure, which means instead of paying an insurance company to cover the risk, I'll simply include the expected loss into the rental rates. I'm disillusioned at the insurance industry and would rather pay the artists for the losses they will incur than pay an insurance company to fight any claim we might ever file. In rentals an artist will not just be compensated for their work but for expected loss and damages. You make more money by renting your art than selling it, because your risks and loss will be greater.
IMHO it's not enough to an artist that renting will increase sales. Even though renting is more expensive it's also more affordable. More affordable = more sales. That's why you're allowing the rental company to make money off your art, but the cost for damages and loss is additional.
But in general you are asking the right questions. Of the places I looked at that were trying art rentals than artist risk was very weakly addressed. I don't think I saw any that even took a security deposit; let alone guaranteed it to the artist. But that company wouldn't be sending out their own stuff without getting a deposit (I don't care how much insurance they had on it), don't let them do that to you.
-- mary ellen anderson
9 Years Ago
Mary, that is a very wise decision on your part.. It is a task for any individual who might make a claim with an insurance company never the less having the client to make the claim themselves. That choice is not just reasonable but feasible.
Cheers, Michael Hoard Actor, Artist and Photographer.
9 Years Ago
Mary Ellen,
would you be kind enough to lay out a plan for let's say, 1(one) painting, retail $1,000 to be straight out locally rented over 2 years or rent to own over the same time period.
I wrote to you privately a few days ago but haven't heard back. thank you
9 Years Ago
Sorry, Marlene, I didn't see the message. I tend to be heavy handed in deleting FAA-mail unopened.
edit;
The reason why you have 3 types of rental programs is because the risks and outcomes are all different. The rates on short-term and rotation rentals are higher because the risk and costs are so much more then on RTO, even though they don't end up owning it. Also, if it's on rent you can't sell or exhibit it, so there is a fee for that loss of opportunity. So the RTO (rent-to-own) rate includes both the rental fee (risk and service) but also the purchase costs and financing fees.
On all rental programs you need to be prepared to convert it to a sale or between them. People very often will rent before purchasing. Someone rented it for 2 months on the rotation rental and now wants to buy it. What's their price?
You could do this with completely different pricing structures for each type of rental program or do what I do and allow 50% credit of total rental fees paid against the purchase price.
So how I came up with these formula is beyond the constraints of the forum, and anyway there's no guarantee that they work. I'm just starting too. But these all-inclusive fees include cost of normal wear and tear, administrative and paper work fees (including shipping and insurance), risk, interest. It's designed to be easy to work with but just ask how a particular cost figured in.
On RTO I do:
1. 30% security deposit. This case $300. This plus the 1st months rent are your worse case scenarios of what you could end up with.
2. Rental rate of 10% per month = $100. I've based on an 18 month period and depending on if they just have you apply the security deposit at the end pays out in 14 months. Total income will be $ 1,700.
So this mean that if they came in 3 month and said I want to buy, your price would be $1000 - 150 (half of 3 months rent) = $850. Your total income on that would be $1150.
So if you wanted to base on a 24 month period I'd add 10 months (24-14 above) @ $50/month rent (rental part of payment) = $500. Add to $1700 that included the purchase and divide by 24 = $91.67/ month. Total income would be $2200, more than doubling your income. But you got paid for your risk, loss of opportunity, interest for financing, monthly service and billing, etc. that has nothing to do with your artistic income. So you're not making more on your art (or at least the artist's in you isn't). Rental rates are high because the cost to rent and finance are high. Customer's and you need to be clear on what your prices consist of.
-- mary ellen anderson
9 Years Ago
Just an FYI, but I've also done my rental pricing based off the purchase cost to naturally adjust with appreciation. Only on RTO contracts are rates and purchase prices held constant and don't adjust with the purchase price of the original. Appreciating inventory is a new twist for the rental industry and again is not being addressed by any players I've looked at yet. You don't want to put in work building your value if you can't get a raise for doing it.
You're going to have to have some consumer limit guarantees in your contract or buy back clauses, but again think this is one of those things you need to consider.
-- mary ellen anderson
9 Years Ago
If anyone would be more comfortable if I made this thread private, please let me know.
-- mary ellen anderson