What should I check before buying a home staging business?

A staging company owns furniture and decor, stores it, moves it and rents it out for short periods. That makes it part rental business, part service business. Your questions should cover the inventory, the space that holds it, the people who move it and the realtors who send the work. Ask to see the inventory in person rather than relying on a list.

Inventory and replacement

Walk the warehouse with an inventory list and compare what you see with what is recorded. Note wear, damage and styles that have gone out of fashion. Request the replacement history for pieces, with receipts. BDC’s equipment valuation guide explains how used assets are assessed, and an appraiser can help if the inventory is large.

Warehouse, vehicles and movers

Read the warehouse lease for its remaining term, renewal options and whether it can be assigned to a buyer. Check ownership and condition of vehicles, and whether movers are employees or contractors. Ask how delivery and removal are scheduled, since late pickups can tie up stock needed for the next job.

Damage, loss and rental terms

Ask how the company handles damage or missing items at a client’s property, and what its insurance covers. Read a sample rental agreement for the length of the rental, extension charges and what happens if a home does not sell. Your lawyer can tell you how those terms would work for you.

Realtors and the pace of the market

Find out whether the work comes from a small group of agents, and how demand follows the pace at which homes change hands. Ask who sends the most work and how long they have used the company. Ask how the business has coped in slower seasons, and what its records show for those periods.