One of the last things you think about at home is your water heater – until it stops working. Then it’s the only thing you can think about.
Renting a water heater is a very popular choice in Ontario, while it’s pretty much non-existent in Alberta. While that may be mostly due to culture – Alberta tends to be more fiscally conservative than other provinces – maybe they have a point. Should everyone buy instead of rent a water heater?
Rent or Buy
The conversation about whether you should rent or buy extends far beyond water heaters. Other popular topics of discussion include if you should rent or buy your house or lease your vehicle. While each of those things is different, one thing they all have in common is the (arguable) convenience of renting and the (theoretical) savings of owning.
Renting a water heater, just like renting a whole home, means that you’re not personally on the hook for repairs (so long as it’s not your fault). You can call up your water heater provider and request repairs, and someone will come out and fix it at no charge.
If you owned your water heater, you’d either have to pay for a technician or buy the parts to fix it and watch some YouTube tutorials.
Renting a water heater doesn’t cost you much up front. The company will install it for you at no extra charge – if you move into a home that is already renting a water heater, then it’s already pre-installed. You can then decide to keep paying the agreed rent, buy it out, or return it and put in your own, either through another rental or purchase.
Buying a water heater can be pricey. Whole home systems start at over $800 and can run up to $1,600 (for tankless heaters). Since renting can cost as little as $20/month, it can take over 3 years for a water heater to “pay for itself.” You may also have to pay a technician to install the unit, or do it yourself. It’s not especially hard work (this blogger’s husband replaced a whole water heater unit in just two hours) but can be annoying to do.
A water heater probably won’t add much to your home’s value when it’s time to sell. Hot water is a necessity, and typically a water heater is a binary item – it either works or it doesn’t. Unlike countertops, flooring and crown molding, the aesthetics of the unit probably won’t sway a potential buyer. Even if you spring for the more expensive tankless models, the actual cost of a unit is a very small percentage of the entire cost of a home. A prospective buyer might not even care if it’s a rental or owned.
Additionally, if you buy a new water heater and move before it pays for itself, you’re just out money. If you’re planning on moving soon it may be more cost-effective to just keep renting.
Replacing the Unit
If you decide to end your rental, you’re presented with two options: buy out the unit or return it to the company. This is usually (intentionally) a huge hassle.
Buying out an old water heater will cost less than purchasing a brand new one from the store, but may not be good value depending on how old it is. If you could spend $300 on a five-year-old heater or $900 on a brand new one, which would you choose? The old one costs less up front but may end up costing more in the long run as you pay to maintain a degrading machine, but a new one may be prohibitively expensive.
However, once you own the unit, you don’t have to do anything extra to replace. When it’s time to upgrade, just go through the same process as buying a water heater. If you pay a technician to install it they can even handle the disposal of the old unit, and there’s no hidden costs or bartering with the rental company.
How to Decide
If you’re trying to figure out if the convenience of the rental is worth the cost, ask yourself these questions.
1. Am I able and willing to make or pay for repairs to the heater?
2. Do I want to have lower monthly costs and can I afford the up-front cost?
3. Am I planning on moving soon?
If you answered Yes to these questions, then buying a water heater is the right choice for you.
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