In his article: Rent to Own Storage Sheds – Why You Should Think Twice, Michael W. Mathis covered some of the reasons why he believes rent to own storage sheds are a bad idea for homeowners. He makes a few good points along the way. It is obvious that lease purchase agreements are not the “be all, end all” for purchasing anything, and, of course, you should think twice before buying anything using this means. The main point of his article seems to be that renting to own storage sheds is expensive, since you pay about twice what the building would cost for cash. He finishes by saying that: “If they can’t obtain reasonable financing or save and pay for out right, then they probably don’t really need it.” While I agree, that lease purchase agreements are not the best options, and that they will cost more than an outright purchase, there are some times when a rent to own storage shed makes sense. When is rent to own a bad idea? When you have the money to pay for it outright. You will save money if you purchase the building with cash, but there are also cases where this is not true. When is rent to own a good idea?
- When the building is needed to create or preserve wealth. In such cases, the building is really a tool, like a truck, or a table saw. If it is needed, and can be obtained in no other way, it is better to have it for the purpose of creating wealth, than to not have it, and lose the opportunity.
- You intend to use the building for business, and taxes are an issue. This is related to number 1. In some situations, renting offers tax advantages. In some states, a portable building is not taxed as a part of the property where it resides. In many situations, business rental can be deducted from income taxes, and that can level the playing field.
- If you are renting space in a public storage. If you are already paying rent for something you must preserve, renting storage space that you will eventually own makes sense. You will be leasing something for a few years and looking forward to the day when it belongs to you as opposed to leasing space forever. Spending $200.00 per month forever makes far less sense than paying $200.00 per month for 36 to 48 months.
- You have credit problems. If you have credit problems, bank financing may not be possible for you. In fact, you may need the building to alleviate the cost of public storage.
- You want to avoid credit problems. If the possibility that you might default on a loan and ruin your credit has crossed your mind, and it is a risk you do not want to take, a rent to own storage shed may be the best option. Most rent to own storage building dealers have contracts that will allow you to return the building without banging up your credit. Will your banker do that?