In keeping with this February’s Design Month theme, I’d like to answer a question from one of our readers, Jared. He was wondering whether it would be worthwhile to rent-to-own his furniture, rather than buying it piece-by-piece. He made the point that for the expected monthly payment of rentals, he could afford much nicer furniture immediately, whereas if he bought furniture, he’d have to go bargain basement. So, the question is: Should you rent your furniture?
1.) If you’re starting out and you have literally zero furniture, you can get a fully furnished apartment within 48 hours if you rent.
2.) Also, if you have very little money upfront, you can get furniture. (For example, Cort furniture has a deal in Chicago for students, where you can get furniture for an entire apartment for $99 a month if you sign a twelve-month contract.)
3.) As even furniture rental places will admit, renting furniture is generally most effective for people who know they’re going to move cross-country within a set time period. Think students, military families, or business executives who are plopped into a new city for eight months to manage a branch opening before they’re whisked away to another city. Or home-stagers, who furnish abandoned for-sale homes, so that they’ll look cozy when they go on the market. All these people have a specific need – and for them, there’s a huge advantage to not having to shop for furniture themselves. Because, let’s face it, furniture shopping on your own can be time-consuming. These people need furniture in, furniture out. And, really, that’s the only major advantage of renting.
The International Furniture Rental Association puts the cut-off at two years – if you know you’re going to move within two years, and you know you won’t want to bring your furniture with you, it may be worthwhile to rent. But, if you do so, use a higher-end company, and really do your homework on them. Why? Keep reading…
1.) While the monthly payment can seem low, the effective interest rate is sky-high – with many rent-to-own places, you’re getting seriously ripped off. In a recent article in Consumer Reports, the magazine found that furniture renters were paying up to the equivalent of 311% annual interest for some items! To put this in perspective, credit cards, which charge obscene, usurious interest rates usually charge 25% or so in interest. So … if you’re still thinking of renting, do yourself a favor and read the article in Consumer Reports.
2.) Also, while it may seem that the furniture you’re renting is “nice,” it’s probably not what you’d want to live with permanently – if it were really great furniture, why would it be at a rent-to-own place? Think about it. Fabulous furniture is usually either something you splurged on or something you spent a lot of time looking for and found in a little known-place, such as at a garage sale, or something you snatched up on Craigslist or a deal you’d been keeping your eye on. People running a rent-to-own operation are neither splurging on furniture they’re renting to others, nor spending time obsessing over getting just that perfect piece. So, yes, you may find furniture that’s nicer than what you could afford if you fully furnished your place up-front in cash. But is rent-to-own furniture going to be truly fabulous? Almost certainly not.
I recommend going as cheap as you can if you have no money at the start. Get functional furniture first and then worry about matching/nice furniture as you go. Go to Goodwill or the Salvation Army, hit up garage sales, cruise Craigslist. Get the basics and then start saving. In other words, instead of paying a rent-to-own place $150 a month, put it in your bank account and then slowly buy nice pieces as you can afford them. It may require some patience, buy you’ll be happy with what you eventually get, you’ll own it right away, and you’ll avoid massively overpaying for it.