29 Aug How Do Rent To Own Sheds Work And Are They Right For You?
Have you been considering a new shed for your home or place of business? It’s a great way to instantly add storage space to your property without directly adding onto the current facility. This helps keep the price down and opens up the possibilities to where you place the shed. However, depending on the kind of shed you’re interested in, the initial investment price might still be a bit higher than what you’d like to pay. You can rent a shed, but renting a shed doesn’t bring with it any incurred value. There is a third option though. You can rent to own sheds. This may be something you’ll want to consider. Before you do though, here is what you need to look at to determine whether a rent to own shed is right for you.
What Exactly Is a Rent To Own Shed?
The name really does say it all when it comes to rent to own sheds. You may have come across this kind of option with homes as well.
First, you can purchase a shed from a store. Whether you just buy the materials or you purchase a prefabricated shed, you’ll pay the full amount for the shed. It may have some financing options available, but one way or another you’re paying for it all at once. If you have the available funds (or the available credit) to do this it is one option.
The second option is to rent a shed. Renting a shed is like leasing a car or renting an apartment. You’ll pay a set amount of money every month, but at the end of the term the shed is no longer yours. This is one option to consider if you don’t want a permanent shed on your property and instead you only need it for a set period.
The third option is rent to own sheds. This basically combines the ability to purchase a shed with the flexibility of renting a shed. You will pay a monthly fee for the shed, the same way you would if you rent it. However, most of the money will go down toward the overall price of the shed. This way, every month you pay your “rental” fee a portion of it goes towards the price (depending on where you “rent-to-own” your shed from, 100% of the monthly price might go toward the cost of the shed, or the company renting it to you might take a bit off the top, so 75% or 90% or something along that line of your monthly fee will go toward the final cost of owning the shed).
Basically, with this option, you have the ability to leave the shed and only use it for a year or so. This allows you to rent just like you would a traditional rental. But if you want to own it after several years you would have already put money toward the price of buying it.
The Benefit of Rent To Own Sheds
The main benefit of a rent to own shed is you can obtain a permanent shed for your property. If you know you want a shed you’ll have two options. The first is to buy it outright (or use financing offered by the seller) or to take advantage of this rent to own option.
If you don’t have the available funds to purchase the shed completely, or if you don’t have the credit to qualify for financing, rent to own sheds becomes your best option. At least some money from every monthly payment will go toward the final purchase price of the shed. This way, over time, you’ll eventually own the shed.
Not everyone has the necessary finances or credit to buy a shed, and yet they might still need one. If you fall into this category the renting to own option is a valuable method to take advantage of.
The Downside Of Rent To Own Sheds
In the long run, a rent to own shed will cost you more money than it would if you had bought the shed outright or if you had taken advantage of financing. Let’s say you’re paying $500 a month for the shed, but only $400 of it goes toward the purchase of the shed. This means 20% of what you pay every month isn’t going toward the shed. If you’re not sure if you want to keep the shed then this isn’t that big of a deal, but if you know from the onset that you do want to own the shed, 20% is a large amount to not have applied to the final cost.
If you were to finance you’d probably see 5 or 10% of your money go toward the financing, so you would save money using financing. Due to this, if you do qualify for financing (or can purchase it outright) you’d be better off going that route.
Renting Your Property
Now, if you rent your current property you’ll probably want to just rent your shed. After all, even if you end up owning your shed you don’t own the property the shed is on. Plus, your landlord might ask you to remove it at a moments notice. If you own the shed you’ll have to figure out where to put it, which brings up additional costs. If you’re renting the shed you can take it back to where you rented it from and not worry about it.
You Don’t Own Equity Until You Own The Shed
Here is one thing to keep in mind when it comes to rent to own sheds. Every month you pay for the property some money is going toward the final price of the shed. However, none of this is equity. If you stopped paying for the shed all of that money would be gone. There is no equity built up in the rent to own method until you have completely purchased the shed. Keep this in mind as you don’t want to be a few months away from owning the shed, only to miss a few payments and have it all for naught.
Renting to Own Is One Option
Rent to own sheds offers a third option when it comes to adding a shed to your property. If you want to add a permanent shed to your home or place of business yet you don’t have money to pay for it all upfront, this offers you a viable option. While not for everyone, make sure to keep this method of paying for a shed in mind. It may just end up being the perfect way to obtain a shed while paying for it as you go.