If you have ever researched rent to own, you know that there are many competing ideas out there. Some argue very strongly that you should never do rent to own while others say that it is just as good as buying a shed outright. All of the conflicting opinions can make it difficult to get a clear understanding of rent to own. So, in answer to the question, “Who is right?” I say, “Yes!”
What is Rent to Own?
Rent to own, similar to leasing a car, allows you to buy a shed using incremental payments rather than paying the full price upfront. This can be very convenient in situations where someone would normally just rent a storage space. Rather than paying a monthly fee that ultimately doesn’t go towards anything, rent to own allows you to “rent” a storage building until you have paid it off. But there is a catch.
Actually, there are two catches. For one, you don’t actually own the shed until you have made your final payment. Rather, rent to own companies will purchase your building and you incrementally buy it from them. This means that if you decide to stop paying at any point, your shed will be repossessed and you will receive no refund. The second catch is that if you choose rent to own, you will end up paying a lot more in total than if you had just purchased it upfront. While it is cheaper in the short-term, in the long-term, you will end up paying as much as $1500 more than list price.
When to Chose Rent to Own
After hearing how much extra you pay with rent to own, you might be thinking that it is never a good option. There are however situations where rent to own is a wise financial choice.
One time you should consider rent to own is when you are looking for easily accessible, short-term storage. This could include situations where you are remodeling, moving, doing a large commercial job, or even setting up a stand at a fair. Anytime you need temporary storage and don’t want to invest in fully purchasing a shed, rent to own can be your friend. Once you are done, your shed will be repossessed and you will actually have saved money.
Another really good time to try rent to own is when you are renting storage space. There is no reason to dump money into a something that gives you no longer term benefit when you can make similar payments and have a shed to show for it in the end. In this scenario, rent to own can be a wise financial choice.
Another time you might want to use rent to own is if you desperately need your shed now but can’t afford to pay full price. Admittedly, these situations are very uncommon and most of the time, it is possible to wait. However, in the rare circumstance that you need a shed right away, rent to own can help you out.
The final situation where you might want to do rent to own is if you have poor credit. By purchasing through rent to own, you can actually improve your credit score which will be a big help further down the road.
When Not to Choose Rent to Own
While there are situations where rent to own is a good option, in most scenarios, it is not necessary. Because of how much extra you end up paying, you are often better off setting aside some money every month until you have enough to pay outright. One way to think about this is, if you are considering rent to own, simply put aside the monthly rent to own payment amount and then when you have enough, buy it in one shot. Here are a few situations where it might be tempting to buy rent to own but you shouldn’t.
Sometimes, people feel like they need something right away but don’t actually. If you find yourself feeling that you really need a shed, do a reality check. Ask yourself if you can imagine yourself living without the shed for a year or however long it takes to save up enough money. Often you will realize that you don’t need it right away and your future self in one year will be much happier to save money while buying a beautiful shed.
Another time when you should resist rent to own is if you want to do it so that you have more money to spend on other things right now. The cheap short-term price tag can often be deceptive. However, the truth is that if you pay full price right now or save up till you can, you will have more money to spend on other things in the long run.
Alternatives to Rent to Own
So now that you have a good understanding of what exactly rent to own is and when it is useful, it is important to know what your alternatives are.
One alternative, as already mentioned, is patience. If you have no immediate need for a shed, you are much better off waiting until you can afford it. One benefit of patience is that on top of the money that you save, you may be able to take advantage of a sale that comes along.
Another alternative is to use a credit card and then pay them back as you can. It may be that the interest that you pay on a credit card is less than the rent to own fees. It’s up to you to do the math before deciding on this option.
Our final alternative to rent to own is to buy a preowned shed. Used sheds are cheaper than new ones so even if you have to save for a short while, it will take less time and you will save even more money.
Now You Know
Hopefully you found this information helpful. At Crestwood, we want to make sure that all of our customers are satisfied and part of this means making sure that they are getting good deals. If you are interested in buying a shed outright, buying a used shed, or trying rent to own, head over to our store now.