Dear David: We are planning to move this spring. Our furnace needs to be replaced. Should we buy a new furnace, or rent one for $150/month with maintenance included? How would a rental be viewed by potential buyers? – HOT SEAT
Dear Hot Seat: When a consumer buys a home, there are certain things they’ll expect to have included, such as the furnace and air conditioner. These fixtures tend to be owned and are purchased as part of the property. In Waterloo Region where the water is especially hard, buyers will also expect to get a water softener. The vast majority of these are owned as well.
Hot water heaters are typically rented, as they tend to wear out quickly.
It’s rare to see a rental furnace or air conditioner in our neck of the woods. From a buyer’s perspective, buying a house with a rented furnace is less than ideal — much like buying a new car and finding out you need to make additional monthly payments on a set of rented tires. If a client of mine was considering a home with rented HVAC equipment (Heating Ventilation Air Conditioning) I would recommend they make an offer that requires the seller to pay the contract out upon closing.
The fine print in a rental contract can yield some big surprises. Unfortunate homeowners may end up owing considerably more than their equipment was ever worth, even after making payments for years.
A recent episode of CBC’s Marketplace shed some light on a few sketchy players in the HVAC rental industry. The featured companies attempted to manipulate homeowners with high-pressure sales tactics and overpriced, long-term contracts. Unfortunate consumers were led to believe that a monthly HVAC rental plan would save them money on maintenance and repairs. The salespeople failed to mention that getting out of the contract would cost more than replacing the equipment.
Before entering into a rental agreement, read the terms of the printed contract carefully. Some home equipment rentals and “rent to own” contracts can add up to tens of thousands of dollars over the course of their lifetimes. A company’s ability to put a lien on your property may be buried in the fine print, and when it comes time to sell, you would have to pay off the lien or find a buyer who was willing to assume it.
PRO TIP:
Before you consider an HVAC rental contract, bear in mind that the supposed savings may not be all they’re cracked up to be. Many furnaces come with a five-to-ten-year warranty, which often makes buying one a much better option in the long run. #Advice #AskDavid #TheNegotiator
David is a top-selling Broker in Kitchener-Waterloo Region. He works personally with you when selling or buying your home. Moving? Get it right. Ask David today! Call or text 519-577-1212.
