(Topic ID: 241506)

Pinball lease? Would you see a value in this direction in the future?

By Yelobird

4 years ago


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  • Latest reply 4 years ago by cottonm4
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    #49 4 years ago

    As others pointed out... in the current market of very little depreciation, it would not make sense for private individuals to lease unless they really need that pinball and don't have the cash to buy it outright (in which case they still probably shouldn't be leasing).

    But lets look at establishments like bars, club houses, bowling alleys etc. They could lease a pinball with no upfront costs other than lets say a $300 down payment. they can put all the shipping, taxes, etc in to the monthly payment so they will have monthly payments of say $100-$150/month which should be fully tax deductible. A wise lessor might even throw in repair service for an additional $xx/month to ensure the machine stays in good shape. The establishment can then start getting positive cash flow from the first month, rather than having to wait for a year and cash out only when you sell the pin.

    Also, this would allow a bar owner to get several pins without needing $30+k upfront.

    Note - if they finance it (rather than lease) the taxes are not as favorable. They would would not be able to deduct the cost of the machine up-front put rather they would depreciate it over 5-10 years. Then when they sell it, they will be taxed on the revenue from the sale.

    Note: I am not a tax professional...talk to one before listening to any advice given here!

    #52 4 years ago
    Quoted from ryanwanger:

    An even better system than this already exists: operators. Establishments pay nothing up front, nothing ever, and they collect a portion of the earnings.

    Well... Leasing could also be an interesting option for operators as well. They also will have quicker cash flow, better tax advantage and low upfront cost if they lease

    #55 4 years ago
    Quoted from ryanwanger:

    That's possible. Unfortunately, the amount I've been quoted for a lease is higher than an average earning game at my best location. After paying the lease, I'd be losing money each month.

    It's four times higher than an average earning game at my worst locations

    Damn... well, so much for that Idea....

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