by Kenbry Capital | Mar 31, 2023 | Blog
The short-term rental market is booming and for good reason. People are increasingly choosing the convenience and flexibility of renting an apartment or house for a few days rather than committing to a long-term lease. As a business owner, you can take advantage of this trend by investing in a short-term rental property. This guide will provide an overview of the key considerations when investing in a short-term rental investment.
Location Matters
The first step when investing in a short-term rental is to select an ideal location. Location matters for two reasons. First, it affects how likely your property is to attract renters. Second, it influences your potential profit margins since local regulations vary from city to city. For example, if you’re looking at properties in San Francisco, you’ll need to be aware of their strict regulations regarding short-term rentals before making any decisions.
Research Demand
Once you’ve identified the right location for your investment, it’s time to research the demand for short-term rentals in that area. You should look at both current and historical trends when researching demand – what’s popular now may not be as popular down the line! Additionally, look into seasonal trends; certain areas might see more need during certain times of the year due to events or attractions, which could affect occupancy rates and profits.
Understand Your Expenses
It’s also important to understand all the expenses associated with owning a short-term rental property to accurately calculate your expected return on investment (ROI). Property taxes and maintenance costs are two primary factors that will impact your ROI and profitability; however, there may be additional costs such as insurance premiums depending on where you invest and what type of property you purchase. To get an accurate picture of your expected ROI, make sure that all associated expenses are considered when calculating projected profits from renting out your property.
Investing in a short-term rental can be a lucrative way for business owners to capitalize on changing consumer preferences while also diversifying their portfolios with real estate investments. To ensure success, it’s important to carefully select the right location based on local regulations and research demand trends before diving into any investment opportunities. Additionally, consider all associated costs including taxes, maintenance fees, insurance premiums—and more—so that you can accurately calculate expected returns before making any decisions about investing in a short-term rental property!
Let’s work toward finding you the right commercial finance solution for your growing business. Get in touch with a member of our team, who will schedule a time to meet so we can learn more about your goals and the specifics of your financing request. Together, we’ll come up with a financing solution that helps your business.
by Kenbry Capital | Mar 24, 2023 | Blog
Business owners have a variety of financing options available to them, and one of the most popular is mezzanine financing. In this blog post, we’ll take an in-depth look at what mezzanine financing is, how it works, and what its benefits are so that you can make an informed decision about whether it’s right for your business.
What Is Mezzanine Financing?
Mezzanine financing is a form of debt capital used by businesses to finance expansion projects or cover other capital expenditures. It can be used to purchase real estate, fund acquisitions, refinance existing debt, and more. The loan is typically secured by the company’s assets and generally carries a higher interest rate than traditional bank loans. It also has an equity component that gives the lender a stake in the company if certain conditions are not met.
Rate of Return on Mezzanine Financing
The rate of return on mezzanine financing varies depending on the type of loan and other factors such as the creditworthiness of the borrower and the amount borrowed. However, lenders expect to receive 10% – 15% returns. This makes mezzanine financing an attractive option for investors looking for higher returns than those available through traditional bank loans.
Benefits of Mezzanine Financing
Mezzanine financing offers numerous benefits to businesses seeking funds for expansion projects or other capital expenditures. The primary benefit is that it allows businesses to access funds quickly without going through lengthy and expensive processes associated with traditional bank loans. Additionally, mezzanine financing enables businesses to leverage their existing assets instead of selling them to raise capital. Lastly, it also provides investors with a higher return on their investment than they would receive with a traditional bank loan.
In conclusion, mezzanine financing is an attractive option for businesses looking for quick access to capital without using up their assets or going through lengthy approval processes associated with traditional bank loans. It also gives investors higher returns than they would receive from traditional bank loans while still maintaining some control over the business they are investing in. If you’re considering taking out mezzanine funding for your business, you must understand all aspects before making a final decision so that you can make sure it’s right for your unique situation.
Work with the financing professionals at Kenbry Capital to find a loan for your business. Our professionals can help tailor a solution that will allow you to continue to meet your business needs with minimal disruption. We have a large portfolio of business loans for all your needs.
by Kenbry Capital | Mar 17, 2023 | Blog
If you’re thinking about investing in rental property, you may be wondering if a short-term rental is a good investment. The answer is yes! Here are 8 reasons why you should consider investing in a short-term rental in 2023:
- There is a growing demand for short-term rentals: The rise of the sharing economy has increased the demand for short-term rentals. More and more people are choosing to rent apartments, houses, and rooms on Airbnb and other platforms.
- You can charge more for a short-term than a long-term rental: Because there is such high demand for short-term rentals, you can charge significantly more per night than you could for a long-term rental. This means you can make much more money with a shorter investment time frame.
- A short-term rental is a flexible investment: If you need to move or travel, finding someone to sublet your apartment or house for a few months is much easier than finding someone to commit to an entire year lease. This flexibility makes it an ideal investment for people who may not want the traditional long-term commitment of owning property.
- You can use your short-term rental as a vacation home: While you’re not using your property as a short-term rental, you can still enjoy it as a vacation home! This way, you’re getting the best of both worlds – the income from renting out your property and the enjoyment of using it yourself when you please.
- A short-term rental can generate income all year round: Unlike traditional long-term rentals which may sit vacant during slower periods, such as summer or winter, short-term rentals can generate revenue all year round. This consistent cash flow makes them an appealing investment option.
- You can take advantage of tax breaks with a short-term rental: When you own and rent out the property, you may be eligible for certain tax deductions. These deductions can help offset the costs of maintaining your property, making it more affordable.
- A short-term rental is easier to furnish and decorate than a long-term rental: Because guests are only staying for a shorter amount of time, you don’t need to worry about furnishing and to decorate your property to such a high standard. This makes it less expensive and time-consuming to get your property ready for renters.
- You have more control over who rents your property with a short-term rental: When listing your property on Airbnb or another platform, you can screen potential guests before they book. This allows you to choose renters who will care for your property and be treated respectfully during their stay.
Short-term rentals are becoming increasingly popular among travelers and offer many benefits for investors. If you’re thinking about investing in rental property, consider making a short-term rental in 2023! Thanks For reading!
by Kenbry Capital | Mar 10, 2023 | Blog
Cash flow and working capital are critical components of any business. To stay afloat and remain profitable, companies need to manage their cash flow effectively. But it can be difficult for small businesses in particular to come up with the necessary funds for everything from day-to-day operations to long-term investments. Thankfully, several financing solutions are available that can help your business manage its cash flow and working capital.
Invoice Factoring
Invoice factoring is a form of asset-based lending that enables businesses to sell their unpaid invoices at a discount in exchange for immediate payment. It’s ideal for businesses that are waiting a long time for their customers to pay them, as it allows them to access the funds they need right away without having to wait. The amount you receive will depend on the amount of your invoice and its terms (e.g., due date), but generally speaking, most invoice factoring companies will offer around 80% of the total invoice amount upfront. The remaining 20% is withheld until the customer pays in full or until other agreed-upon conditions have been met.
Business Line Of Credit
A business line of credit is a loan product offered by banks or alternative lenders that provides businesses with access to working capital when needed. A line of credit works like a credit card – you can draw from it as needed up to an approved limit – but it usually has lower interest rates than other forms of borrowing and more flexible repayment terms. It’s ideal for businesses that need quick access to cash but don’t want to take out a large loan or commit to regular payments over an extended period.
Merchant Cash Advance
A merchant cash advance is another financing option explicitly designed for small businesses that need an influx of cash quickly. With this type of loan, you receive a lump sum from the lender in exchange for a portion of your future sales revenue or credit card transactions (usually between 10% and 60%). This means that instead of making regular payments on a fixed schedule, you repay the loan through automatic deductions from your daily sales or credit card transactions over an agreed-upon repayment period (usually 6 months). Merchant cash advances are perfect for businesses with unpredictable income streams since they allow you to adjust your repayment amounts depending on how much money you make each month.
Invoice factoring, business lines of credit, and merchant cash advances all provide invaluable assistance when it comes to managing your cash flow and working capital. Each one offers different benefits depending on your individual needs, so research before deciding which one best suits your business’s specific needs and goals. With these three financing solutions at your disposal, managing cash flow and working capital doesn’t have to be such a daunting task!
Work with the financing professionals at Kenbry Capital to find a loan for your business. Our professionals can help tailor a solution that will allow you to continue to meet your business needs with minimal disruption. We have a large portfolio of business loans for all your needs.
