In the storage shed business, the rent-to-own market has had a major impact. You can hardly drive around any city these days without seeing multiple rental exhibits for owning storage sheds, most of which advertise “Mennonite Built.” I would like to point out some of my personal observations and feelings regarding this marketing tool being used, and I could add quite successfully.

We have been in the storage shed business for almost 20 years, I personally took the time to research the possibility of tapping into this additional market and was approached by lenders who are more than willing to work with me in this endeavor. but I have a problem with offering this, mainly my conscience.

Let me explain this rent-to-own agreement in a little detail. Most of the companies that offer this push the lack of credit check and low monthly payments. This sounds good, doesn’t it? It’s not until you really start looking at these offers that you really get an idea of ​​what you’re signing up for. Typically, the rent-to-own agreement will require you to pay a deposit (depending on the size of $ 100.00-500.00 in advance), plus the first month’s payment. All of these offers have a fairly lengthy and detailed contract that you need to sign, you really need a lawyer to follow all the fine print. All the contracts I’ve seen include:

a) payment of payments for 36 months

b) Advance payment is allowed, but any payment that you have paid only 60% will be applied to the original purchase price.

c) In case of recovery of the shed, you will lose all deposits and payments.

d) If your shed is repossessed, the cost of removal of the shed will be charged to you.

e) Any contents of the shed, if recovered, will become the property of the company.

f) Any damage to your property during delivery or collection, or to the garden is your responsibility.

g) At $ 15.00 / month A late payment fee applies

At first glance these don’t seem all that unreasonable, although most of the people who make these deals probably never understand or care about these details, but the real catch is that the interest rate on these buildings is typically around 35-40. % of financing costs.

Let’s break that down for you:

$ 2900.00. storage shed

$ 284.00 in sales tax

$ 3184.00 total cost of the barn

Doing a rent to own at $ 3,184.00 will cost you about $ 145.00 / month multiplied by 36 months that you would actually pay about $ 5200.00 for that same barn. Now I build 75-100 of these storage sheds every year and my profit margins on this same storage shed would be about $ 500.00 if I was lucky. Something is not right here I can make $ 500.00 or about 20% and the rent to own companies are making about $ 2000.00 and that is if you make all the payments. If you don’t make the payment and you get it back, they keep the money you paid and resell the same barn, on the same deal. Speaking of compound interest

I certainly have no problem with companies making a profit, but my real problem with Rent to Own is that I feel like we are taking advantage of people. Let’s face it, anyone with any financial ideas can see this as a scam. In most cases these are people with little or no credit. Most of the time they are putting what they want ahead of what they really need. Like “You Tote The Note” car lots and “Cash Advance” businesses, the “Rent To Own” business takes advantage of people who have made bad decisions, don’t know better, or have been caused by unfortunate circumstances. put in a bad financial situation. In any case, I believe that making money with the people who can least afford to pay absorbing interest rates. If they can’t get reasonable financing or save and pay well, they probably don’t need it.

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