Today we look at the pros and cons of rental equipment such as a furnace, water heater, water softener, and air conditioning. Is it a good idea, or is it always better to own? We’ll also look at the importance of disclosing rental items when selling your home and the troubles that can arise if you don’t.
Should You Buy or Rent an HWT (Hot Water Tank)?
Most people rent their hot water tank because it’s convenient. You don’t pay anything for installation; you aren’t responsible if it isn’t functioning properly or starts leaking.
Adrian’s been in his home for about 11 years and paid about $5,000 to rent a water heater, roughly $40 a month. If he’d purchased one when he moved in, it probably would have been about $1,500 plus maybe another $1,000 for installation, or roughly half of what he’s paid in rental fees.
Whether you buy or rent your water heater may come down to how long you plan to stay in the home. Short-term, you may want to go for a rental, but if you plan to stay in the same house, you’re better off buying.
What Happens if You Don’t Disclose Your Water Heater is a Rental When Selling Your House?
It can be a big headache for a seller if you don’t disclose rental equipment.
Adrian had two recent instances when he was representing the buyer where this happened. The listings had no rental items itemized, and the home was purchased under the assumption that there was no rental equipment. Later, the sellers returned and said they forgot their water heater was a rental. In both cases, the sellers had to buy out the water heater to close the deal in amounts that were more than $5,000.
As a listing agent, you must be diligent about listing any rental items or contracts. As a buyer, confirm whether they’re transferable to another homeowner, and find out the monthly cost, remaining time and balance owing on the contract.
Are Service Plans Offered by Utility Companies Worth Having?
Companies will offer extensive maintenance and protection plans for heating, air conditioning, plumbing, and electrical. These types of plans are essentially selling peace of mind for a monthly fee. But what are you getting? Read the fine print, and you’ll probably see verbiage like “most parts and labour covered.” Technically this could mean 51% of the components are covered, and these could be the cheapest to replace or least likely to break down.
This person got the short end of the stick when being persuaded to replace their temperamental two-year-old furnace and AC with a rental
Monthly Payments are Becoming an Easier Sell
Monthly payments have become commonplace. In a world where many people never expect to own their own home, it’s become more acceptable for almost everything you buy. For businesses, it means higher profitability by creating a steady stream of recurring revenue. It’s why car dealerships push leasing.
Is it Ever a Good Idea to Rent HVAC Equipment?
Renting HVAC equipment is not a good idea if you own a home unless you’re out of other options. You’re better off purchasing a furnace and air conditioner and putting them on a line of credit.
Not only are you likely to spend a lot more in the long run, but owned HVAC equipment adds value to the home when it’s time to sell.