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 rented furnace be perceived by potential buyers? – HOT SEAT
DEAR HOT SEAT: When a consumer buys a home, there are certain things they expect will be included, like the furnace and the air conditioner. Typically, these fixtures are owned and purchased as a part of the property. In Waterloo Region, where the water is especially hard, buyers expect to get a water softener as well. The vast majority of water softeners are also owned.
Hot water heaters are typically rented, as they tend to wear out quickly.
It’s rare to see a rented 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 — it would be like buying a new car and finding out you’ll need to make additional monthly payments for a set of rented tires. If a client of mine were 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, so these fixtures would be owned.
The fine print in a rental contract can sometimes yield big surprises. Unsuspecting homeowners may end up owing considerably more than their equipment was ever worth, even after making monthly payments for years.
An 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. Some unfortunate consumers were led to believe that a monthly HVAC rental plan would save them money on maintenance and repairs. The featured salespeople failed to mention that getting out of the contract would cost them more than replacing their HVAC equipment.
Before entering into a rental agreement, be sure to read the terms of the printed contract carefully. Some home equipment rentals and “rent to own” contracts can cost you 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 your home, you’ll have to pay off the lien or find a buyer who is willing to assume it.
PRO TIP: Before you consider an HVAC rental contract, be aware that the supposed savings may not be all they’re cracked up to be. Many furnaces already come with a five to ten year warranty, which often makes buying these units a much better option in the long run. #Advice #Ask David #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.
This article has been adapted from a previous publication.
