Table of Contents
What Does Rent To Own Mean?
Rent to own is a way of purchasing a shed over a period of time without obtaining financing. Under a rental agreement, the purchaser pays rent for a shed and at the end of the rental agreement, owns the shed.
Is a rent-to-own shed worth it?
Renting to own a shed is a far better solution to storage needs than renting a storage locker. At the end of the rental agreement, the renter actually owns the storage shed. Storage lockers only make sense for short term needs.
What Is A Rent-To-Own Shed?
A rent-to-own shed is a storage building that is leased on a monthly basis with part of the rental fee going toward leasing services and the rest toward the base price of the building, accruing until full ownership at the end of the rental term.
The rent-to-own agreement requires monthly payments in order to pay off the shed. Once the original price of the shed is paid off through these monthly payments, the shed is fully owned by the renter/buyer.
How Rent-To-Own Sheds Work
Put simply, a rent-to-own shed works by creating a contract for a customer to lease a storage building for a specified period of time (usually 24, 36,or 48 months) at a set monthly rate, with ownership of the building transferred to the customer upon completion of the rental agreement. During the rental period, part of the monthly fee covers leasing services and the rest is applied to the cost of the building.
Is Rent-To-Own the Same as Financing?
No, rent-to-own is an alternative to traditional financing. The main difference between financing and rent-to-own is this: financing is a loan
with credit implications; rent-to-own is a lease agreement.
With traditional financing, you are required to file a credit application which will then be reviewed by the lender who will either grant or deny the loan. If you default on a loan or even return the property (in this case, your shed) early without fulfilling the full terms of the loan, your credit score will (almost always) be affected negatively.
With a rent-to-own contract you are not required to fill out a credit application. If you choose not to complete the full rent-to-own payment period for your shed, you can return the building at no cost to you (assuming you are up-to-date on all payments.) Otherwise, once you fulfill all your monthly payments the shed is yours!
A rent to own contract does NOT have a financing or interest rate. It is not a loan. A rent to own agreement has a leasing fee added to the building cost.
Does a Rent-To-Own Shed Affect My Credit Score?
No, a rent-to-own shed does not affect your credit score. Rent-to-own agreements do not require a credit check because they are not loans. If you decide to end the rent-to-own agreement early and return the building, there will be no negative effects to your credit score.
Some credit bureaus have begun tracking renter credit (separate from traditional credit reports.) While still very uncommon for rent-to-own sheds, this newer type of rental credit score could eventually allow rent-to-own customers to build a good credit reputation by faithfully meeting their monthly shed payment requirements.
How Much is a Rent-To-Own Shed?
The cost of a rent-to-own shed is based on two things: 1) the starting price of the building and 2) the length of the rent-to-own agreement.
To understand your monthly rent-to-own shed costs, it is important to know that there are terms within which you are required to pay off your shed. Most companies offer rent-to-own terms in 24, 36, 48, and 60-month periods.
When purchasing a rent-to-own shed, you will choose one of these payment periods which will determine your monthly payment amount. Shorter rent-to-own shed payment periods have a higher monthly payment amount, but a lower overall cost-to-own.
Here are some examples from Dutch Barn Builders that show how rent-to-own shed costs change based on building price and the length of the rent-to-own agreement:
| One-Time Payment Price | 36-Month Rent-To-Own | 48-Month Rent-To-Own | |
|---|---|---|---|
| 10 x 12 Barn Shed | $2744 | $127/mo | $118/mo |
| 10 x 20 Gable | $4441 | $221/mo | $191/mo |
| 12 x 30 Garage Shed | $7907 | $393/mo | $339/mo |
Can Rent-To-Own Sheds Be Paid Off Early?
Yes! A rent To Own building can be paid off early at substantial savings. Part of payments made to date are applied to the cost of the unit.
In most cases, you can pay the remainder of the price of your shed as soon as you want. You are not bound to the monthly payments of your chosen rent-to-own term, to pay it out to the end. At any point during your rent-to-own payment agreement, you may finish paying the whole price of your shed and become the exclusive owner immediately after that final transaction.
Keep in mind that, since part of each monthly rent-to-own payment goes toward leasing services, only a percentage of past payments will count toward the overall purchase price of the building. That percentage will usually be stated in the rent-to-own shed contract/agreement.
Can I Keep Animals In a Rent-To-Own Shed?
It depends on your rental agreement. Most rent-to-own agreements specify that the building is not to be used for housing animals during the rent-to-own period. However, I do work with one rent to own company that will allow us to offer customers run-in sheds, chicken coops and dog kennels on a lease basis.
Be sure to check with the RTO company for restrictions. A good shed builder will know what is and isn’t allowed.
What Happens if I Change My Mind About My Rent-To-Own Shed?
A rent to own shed can be returned at any time as long as payments are up to date. Returning a shed does not affect your credit and usually the same company will cheerfully rent to you in the future.
If all payments are up-to-date at the time of your decision to discontinue the rent-to-own contract, then you are no longer required to continue monthly payments. Simply notify your rent-to-own company that you wish to end the agreement and the rent-to-own shed will be picked up from your home or property at no cost to you.
Can I Buy a Used Rent-To-Own Shed?
Yes! Companies often have sheds available that have been returned by rent to own customers. These are sold at a reduced price based on the number of payments made by the previous owner.
When someone prematurely ends a rent-to-own agreement on a shed, the building is repossessed. Often these sheds will end up back on the sales lot at a discounted price. Usually, these sheds are marked as, “used, “pre-owned”, or “repo”.
Is A Rent-To-Own Shed Ever A Bad Idea?
For long term storage needs, a rent to own shed is a better choice than renting a storage locker. For short term, a locker rental is usually more economical.
If you plan to own your shed or storage building long-term, up-front payment will give you the lowest cost-to-ownership of any payment option. Whenever possible, I recommend that my customers pay for their building with cash or check.
Putting your shed purchase on a credit card (if possible) is often cheaper overall than buying with rent-to-own payments. (This assumes you make monthly payments on your card of a similar amount to a monthly rent-to-own payment.)
Rent-to-own is a great option for short-term storage or any situation where the alternative is self-storage. If you need storage now, but can’t afford to buy a shed upfront, rent-to-own may be a good choice for you.
Are Rent-To-Own Sheds More Expensive Than Renting Storage Space?
As a long term solution, rent to own is always cheaper than renting a space. At the end of the rental term you own the building and can continue to use the building. A well built building will give you 20-30 years or more of storage space for the cost of 36 months rent.
A rent-to-own shed always costs more than buying the same shed with a one-time payment. However, the overall cost is usually the same or less than renting a self-storage unit for the same time period.
A well-built shed can also be sold to recoup some of your investment.
Rent-to-Own Shed Price Compared to One-Time Payment
The extra cost of a rent-to-own shed (compared to a one-time payment) is due to the leasing services that the rent-to-own company provides during the rental period. In some states, rent-to-own companies are required to display the exact cost of leasing services as a separate item on your invoice. However, you can calculate exactly how much you will pay for leasing services on a rent-to-own shed by using the following formula:
(Monthly Rent-to-Own Payment x Length of Rental Agreement) – Cost of Shed w/One-Time Payment = Cost of Leasing Services
Here’s an example using a 10×12 Barn from our rent-to-own shed inventory with a 36-month rent-to-own agreement:
($127/mo x 36 mos.) – $2744 = $1828
So in this example, rent-to-own leasing services would cost $1828 in addition to the one-time payment price of the building. That is less than $51 per month for storage, while the remainder goes to the cost of the building. You cannot rent a 10×12 storage locker for $51 per month.
Rent-To-Own Shed Price Compared to Self-Storage Costs
On the other hand, rent-to-own sheds are a great deal when compared to self-storage. Let’s compare the cost of a rent-to-own shed in Pittsburgh, PA with the cost of a similar self-storage unit in the same area.
In the example above, a 10×12 Barn would cost a total of $4572 (price + leasing services) with a 36-month rent-to-own agreement.
A 10x12self-storage unit in Washington, PA costs $151/mo according to sparefoot.com. That means over the same 36-month period, a self-storage unit would cost about $5436. That’s even more than a rent-to-own shed! Plus, after 36 months of renting a self-storage unit, you have nothing to show for it!
Obviously, there are times when self-storage makes sense, like super-short-term storage, if your property is too small for a shed, or if you need climate-controlled storage.
Rent-To-Own Sheds Compared to Self Storage
| Rent-To-Own Sheds | Self-Storage Units |
|---|---|
| Unlimited access to your storage. | Many self-storage units don’t offer 24/7 access. |
| There are no business hours to work around. | You need to work around the hours of the self-storage facility, which may not coincide with your work schedule. |
| You can provide your shed with maximum security. | You entrust the security of your storage unit to someone else. |
| You won’t put any miles on your car retrieving your storage items. | You will need the pay the mileage to fetch your belongings. |
| Part of the rental payment goes toward ownership of your shed! | Once your rental fees are paid, they are completely gone. |
Rent-To-Own Sheds Are An Investment / Self-Storage Is An Expense
Ideally, if your storage is going to be used often, a rent-to-own shed is better equipped to satisfy your needs. Also, consider rent-to-own if your items will require long term storage. It is helpful to think about your rent-to-own shed as a long-term investment. The inescapable fact remains, you will owe a monthly payment for either self-storage or a rent-to-own shed.
The key distinction between the two is worth considering. At the end of years of paying monthly, one option will allow you to walk away with a storage shed and the other leaves you with nothing. Plus, with rent-to-own, not only will you own your shed, but you will also increase the value of your property.
The Full Rent-To-Own Process: Step-by-Step
If you’re considering the purchase of a rent-to-own shed, it’s helpful to know how the entire process will work. Here’s a step-by-step overview of the rent-to-own shed purchasing process:
Step 1: Look At Your Budget
You will pay less overall if you purchase your building with a one-time payment, even if that means putting it on a credit card. However, if that isn’t an option for you, now is the time to discuss in-depth with your trusted shed dealer about a rent-to-own payment plan.
These are some questions and clarifications you should discuss…
1. In how many months do you want to pay off your shed? The terms available are generally 24, 36, and 48 months.
2. What are the upfront payments that I need to make? These usually include one or two month’s payment(s) and may also include a security deposit and/or delivery fees. (This varies by company.)
3. Are there any extra fees that you need to be aware of? Delivery and leveling fees may be applicable in some instances.
Step 2: Choose A Building
Whether you shop online or visit a sales lot in person, you’ll need to pick out a backyard structure that meets your needs. You also need to consider that there are size limitations to rent-to-own sheds. Only sheds that can be delivered and recovered by trailer can be rented.
Step 3: Finalize Building Details
Discuss with your shed dealer any questions, concerns, and customization needs your shed will have. The shed company will then be able to give you the final price of the shed. Many local shed companies will let you design a custom shed and purchase it through a rent-to-own agreement.
With most dealerships, where the lot only sells buildings shipped in from somewhere else, (often out of state), customization is not possible. Always buy local.
Step 4: Sign the Rent-To-Own Agreement
When you’re ready to commit to the purchase of your shed or prefab building, you’ll have a chance to review the rent-to-own agreement. Often, this agreement is with a third-party rent-to-own company that the shed company uses to provide their rent-to-own services.
However, some shed companies handle the rent-to-own service themselves.
Once you’ve reviewed the contract, your signature is required to finalize the rent-to-own agreement.
Step 5: Make First Payment
Once the contract is signed, you’ll be required to pay one month’s rent (this can vary by company). This payment will be determined by the cost of the shed, any security fees, and the length of your rent-to-own agreement.
Step 6: Accept Delivery of Your New Shed
Your new shed will soon be delivered to your house! The exact time until delivery will vary depending on whether you’re getting an in-stock shed on a sales lot or having a shed custom-built.
Once you have made your monthly rent-to-own payments for the length of your chosen term, you’ll own the entire shed.
Why Should You Buy A bBackyard Shed?
A backyard shed is one of the most reasonable, most popular, and most attractive ways to begin taking steps toward a clutter-free and more efficient life where you are the boss of your stuff!
There are many reasons out there for buying a shed, but maybe you fit into one of the following categories:
- You are fed up with your disorganized storage.
- You are gearing up to start a home-based business or office.
- You are tired of running across town to your self-storage unit.
- You are looking for a way to increase the value of your home and property.
Whatever your reason for landing on this page, your #1 reason is affordability! Rent-to-own sheds are designed to provide an easy, affordable way to own a shed. Rent-to-own sheds offer the flexibility of a self-storage unit, at a similar or lower cost, while building the value of your property!
Now that you know how a rent-to-own shed works, it’s up to you to decide which type of building is right for your property and what shed company you’ll buy from…
A Trusted Shed Company Makes All the Difference
It doesn’t take much searching online to find horror stories of predatory rent-to-own companies and customer service gone off the rails. At the end of the day, your shed buying experience will only be as good as the company you purchase from. It probably doesn’t need repeating, but always check a shed company’s reviews on a third-party platform (like Google) before making a final purchasing decision.
Additionally, review the terms of your shed company’s rent-to-own contract before signing. An honest company should have no problem with sending you a copy of the rent-to-own agreement for you to review ahead of time.
When it comes to making deals, purchases, and investments, you deserve to be treated fairly and with open honesty. This includes not only the financial side of things but also the quality of the shed in which you are investing your hard-earned money!