Hotels are practically omnipresent, and real estate investors, franchisees, and independent owners of hotels struggle to maintain a competitive advantage in the fast-paced and continuously renewing industry. With new hotels developing everywhere, owners and operators have to invest a great deal in order to ensure that their hospitality properties keep up with the more modern and upgraded spaces. They are frustrated by having to throw away so much usable furniture and materials simply to make room for a more modern look. Throwing away used furniture and building materials to update a hotel is a necessary cost in the cycle of staying current, but there’s actually a way to turn that painful cost into a cash asset through tax benefits. Deconstruction enables you to donate all of those valuable materials and turn them into year-end tax reductions, which can significantly lower the inevitable costs of renovation in the hospitality industry.
Remodeling and renovating a hospitality project like any other construction development project comes in two steps: the taking-apart step and the remodeling/modernizing step. In order to remain current in the industry, modernization is necessary. Having new electronic options, modern light fixtures, and updated furniture can have a tangible impact on customers. Customers want the transition between their home lives and their hotel stays to be comfortable and easy as opposed to a regression. For this, it is vital to continually invest in modernizing your hotel. On the other hand, you do have a choice in picking deconstruction over demolition allowing you to turn waste into cash assets making your renovations much much affordable and rewarding.
With deconstruction, your hospitality project is disassembled piece by piece so that those pieces, whether it be furniture, wiring, fixtures, or really anything, are separated out to be given a second life. All of those old televisions, bedding materials, and light fixtures, are donated to 501(c)3 charities. What is incredible is that per US Tax Code, the full fair market value of the donated materials is tax deductible. Even more significant is that even the deconstruction and moving expenses are also tax deductible. Just think about how much you would typically throw out that is still usable and then think about how much money you can get back in tax deduction by donating everything. We recently had a hospitality client that received $200,000 in tax deductions.
With deconstruction, saving materials and not wasting them can already help reduce the environmental impact of remodeling and renovation projects on our planet. Materials can be recycled multiple times, producing conservation benefits and savings and diverting materials from landfills. For example, 95% of asphalt is recycled and reused, and if we consider the percentage of the rest of a hospitality project or teardown that can be repurposed in the same way, consider how much we can save. Even wiring, door frames, and screws can be reused. Through deconstruction, your project can qualify for LEED points as well as stay compliant with local environmental/governmental regulations. Customers, especially in our world today, are always seeking eco-friendly alternatives, and this can be one more advantage to generate.
Here at Green Donation Consultants, we have had phenomenal success delivering appraisals for deconstruction projects and have consistently delivered for our clients. If you would like to see how we recently helped a hotel property owner receive $200,000 in tax deductions, click the link below.