When homeowners seek additional storage space, they often face a decision: should they buy a shed outright, finance it, or choose a rent-to-own (RTO) agreement? The rent-to-own option has become increasingly popular due to its flexibility, especially for those who may not have the immediate funds or perfect credit scores to make a purchase upfront.
What Is a Rent-to-Own Shed?
A rent-to-own shed allows you to lease a storage building for a set period, usually between 24 to 60 months. The key difference in this model is that a portion of each monthly payment is allocated toward the purchase price, ultimately leading to full ownership. This arrangement offers immediate access to storage without requiring a significant initial investment or credit checks.
Comparing Costs: Rent-to-Own vs. Traditional Storage Units
Rent-to-own sheds can be a more economical choice than renting traditional storage units. For example, in Pittsburgh, renting a self-storage unit typically costs between $140 and $185 per month, totaling approximately $8,880 over four years. In comparison, a 10×16 Lofted Barn shed under a rent-to-own plan costs around $6,313.44 for the same period, potentially providing better value for long-term storage needs.
Rent-to-Own Sheds: Pros and Cons
Pros:
- No Credit Checks: Rent-to-own agreements often don’t require credit evaluations, making them accessible to a broader range of people.
- Flexible Payment Plans: Renters can choose from payment terms ranging from 24 to 60 months, making it easier to fit payments into their budget.
- Ownership Upon Completion: Once all payments have been made, the shed becomes wholly owned by the renter.
- Early Purchase Options: Many providers allow early buyout options, often at a discount, without penalty.
Cons:
- Higher Overall Cost: While convenient, the total cost of a rent to own a shed can be higher than purchasing outright due to leasing service fees.
- Usage Restrictions: Modifications to the shed are generally not permitted during the rental period, and they must not be permanently affixed to your property.
Hidden Costs to Be Aware Of
While rent-to-own agreements may seem straightforward, it’s essential to consider additional costs:
- Initial Deposits: Most programs require a security deposit, the first month’s rent, and potentially extra deposits for larger sheds.
- Leasing Service Charges: These fees can raise the total cost by as much as 25% to 100% compared to an outright purchase.
- Delivery Fees: Free delivery is often limited to a specific radius, with additional charges for longer distances.
- Termination Fees: If you terminate the agreement early, you may forfeit the initial deposit, although some providers offer reinstatement periods if payments are up to date.
Is Rent-to-Own the Right Choice for You?
Rent-to-own can be a good option if:
- Immediate Storage Is Needed: You require storage space quickly and want to avoid waiting for construction or approval processes.
- Limited Funds for Upfront Payment: You may not be able to afford to buy a shed outright, but you can manage monthly payments.
- Uncertain Long-Term Need: You are unsure about the length of time you’ll need the shed and prefer flexibility.
However, if you have the financial means and plan to use the shed long-term, purchasing it outright or financing it may be a more cost-effective option.
Final Thoughts
Rent-to-own sheds provide homeowners with flexibility and ease, offering storage solutions without upfront costs. By considering the total costs and terms of the agreement, you can make an informed choice that suits your financial situation and storage needs. Always compare offers from different providers and read the fine print to ensure the agreement aligns with your expectations and requirements.