Renting vs Buying: What Makes the Most Sense? Part 2

July 27, 2014

General

The title of this blog post is a little deceiving. In the first half of this post I detailed the advantages and disadvantages to renting/buying a kayak when beginning the sport. There is, however, a third alternative – an opportunity that combines the best parts of renting and buying while eliminating many of their disadvantages. You can buy a kayak with the express intention of selling it again in the near future. Up until this point, I’ve been referring to buying a kayak as a purchase made with the sole intention of outfitting yourself with gear. Buying for the purpose of flipping the kayak means that the purchase is also made with consideration to the kayak’s resale value. When done correctly a good flip is like getting paid to rent your gear.

Buying and using a kayak that you intend to resell in the near future has several distinct advantages. First of all, a kayak (bought with the intention of flipping) shares the same advantages as buying quality gear specifically fitted to you.  The beautiful part about using an item you intend to flip comes from the fact that although you are using better equipment than you would ever get from a rental shop, you can still think of your gear in the same way as a rental. You can try out new styles of equipment or repeatedly trade your kayak for new kayaks. As long as you sell it for at least the price you paid, you walk away from the experience with a $0 net loss and all of the memories you created using the kayak before you got around to selling it. With the right deal you can sell the kayak for more than your purchase price and then not only do you get to use your gear for your kayaking adventure, but you also make a profit. The thought of my hobby not only not costing me money, but actually making me money makes all the times I use the kayak all the more enjoyable. It’s like getting paid to do what you love.

Of course the main economic principle of flipping an item boils down to the simple concept of buying low and selling high. Actually finding deals that accomplish this is where things get a little more complicated. Here are a couple of things you should think about when trying to find a deal you can flip.

Seasonality

For most people kayaking is a sport that is reserved for sunny summer days because let’s face it, unless you’re a little masochistic kayaking in freezing rain sounds like a fairly miserable experience. So with the exception of those few dedicated, or insane, kayakers most kayaks are used during the more pleasant months of April through August. The graph below details the number of classified ads selling kayaks broken down by month.

Seasonal Supply for Kayaks

As you can see the number of kayaks being listed picks up in the month of April and reaches a peak in June, which presumably is the height of the season for many kayakers. You can also see how the number of kayak posts drop dramatically during the winter months, hitting its lowest point in February. Recognizing seasonal supply trends in items is a great way to find a deal, but it is also important to check out the average price trends.

Seasonal Prices for Kayaks

Looking at the graph we can see that February, in addition to having fewer kayaks for sale, also has some of the lowest average prices for the year. This is great for our flipping purposes. The data is showing that although there are fewer kayaks available in February they seem to be sold at a lower price. The low demand in the off season drives the price down and makes finding a great deal on a kayak far more likely. By buying in February you can get a kayak at a depressed price, enjoy it throughout most of the season, and then sell it towards the middle to end of the summer when prices and demands are more competitive. With some timely purchases you should be able to at least break even on the cost of your kayak, if not make a little money and all the while you enjoy using your kayak. You get to have your cake and eat it too!

Depreciation

Kayaks seem to be similar to cars, boats, and motorcycles in the fact that during the first few years of ownership they drop significantly in value. If you want to get the best resale value for your purchase, buy a model that is at least 3 years old. By that point the rate of depreciation has slowed down quite a bit. The great news is that kayaks, if well maintained and properly stored, have a life expectancy of ten to fifteen years. You can buy a 3-year-old kayak and still expect to get many years of use out of it. Even if you hold onto your kayak for a couple of years before selling, the kayak would barely be halfway through its life expectancy. Its many remaining years will make it attractive to potential buyers. If you want a more in depth look at depreciation rates and how they affect the flipping process check out our blog post on dirt bike prices.

Know your Products

Knowing seasonal price trends and finding a kayak with a slow depreciation rate are great tools when flipping a kayak, but the truth is that sometimes your best deals just come from being lucky. Someone’s moving to Arizona and is looking to sell their kayak quickly; you could get a good deal. Someone is looking to take up mountain biking and they need to sell their kayak to help pay for a new bike; you could get a good deal. Someone has to clear space in the house for the new baby that’s coming; you could get a great deal. Of course you’ll never know if these are good deals unless you know your product.

Luckily, Statrick’s Analyses give you the vital information about any product so that you can recognize a good deal when you see one. Just compare prices against our analysis so that you know exactly how good or bad the deal is. All you need to do in this case is be patient and keep an eye out for when the really good deals come along.

Those are all the tips for now, but there are more tips coming in the future. Good luck hunting deals and feel free to send in any stories you have about flipping used goods. I would love to hear them.

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