What Should You Do? Buy or Lease a Furnace, Air Conditioner, or Water Softener?

Are you in the situation of having to install a new furnace, air conditioner, water softener, hot water heater or other major equipment for your home?

BEFORE you decide whether to lease or buy, I strongly recommend you read further.

Over the past few years a trend to leasing a furnace or other high cost equipment for the home is costing many homeowners $1000s of unnecessary dollars. The trend to leasing furnaces etc for the home is seriously affecting the value of a home and the saleability of a home especially when the homeowner decides to sell a property.

Utility companies have always made a profit by leasing water heaters.  Since the cost of water heaters is relatively low, the homeowner has paid the cost of the water heater several times over before it has to be replaced.  Voila!  Who made money in this?  Yep, the utility company.

What’s of more concern is that furnace/water softener/air conditioning companies are strongly promoting this same marketing ploy as the better way to go especially if the homeowner is planning to sell the home in the near future.  These companies even go so far as to say that a maintenance program which is included in the lease is a benefit to the buyer and makes for good advertising when the home is listed for sale.  Think about this a sec..... If you were a buyer wouldn't you think the price should be lower if the equipment doesn't belong to the home?!?

It all sounds like a great deal to lease expensive equipment, especially when the homeowner believes he/she will save a ton of money if they plan to sell in the near future.  That's simply not the case most often.

Ok, here's the kicker and deciding factor when it comes to your decision to lease or buy this equipment....?  Once you sign the lease you are committed to the full term of the lease and the buyout terms stated therein.  

When you list your home for sale, buyers expect the furnace or other major equipment to be included in the sale price. If it is not, the buyer will deduct the price of the equipment from their offer and rarely will the buyer accept a transfer of the lease on the sale.  In short, buyers do not want the hassle nor the added expense to continue leasing this equipment.  When the homeowner receives the offer he/she then has a choice of not accepting the offer or paying out the lease to get the desired price asked for. In most cases the cost of paying out the lease is actually much more than if the homeowner had bought the unit in the first place. The utility company does not budge on the pricing and in reality you, the homeowner, have committed yourself to paying their price because you signed the lease.

As a Realtor, I don’t install furnaces for a living and don’t dispense advice on the type of furnace, air conditioning system or other high priced equipment a homeowner should install, but I do sell houses for a living and cannot be more emphatic when I say please do not lease a furnace or other major equipment and expect to get full market price when you sell. I can assure you that leasing home equipment will adversely affect the value of your home. Most buyers view a furnace as an integral basic part of the home much like the windows or the roof.  Buyers do not want to pay extra for basic equipment.  Would you?

So what may appear to be a great convenience because of the low initial cash outlay and maintenance is included, leasing furnaces or other equipment can be a very costly mistake. If you are a Seller and are not willing to buy out the contract then you must be prepared to sell the home at a lower price and also taking the risk of your listing being ignored on the market by potential buyers and... what’s worse ... your home being stigmatized as having a major problem far beyond just the simple lease issue.  When this happens you can be guaranteed you’ll be accepting a far lower price.

Hopeully you got the gist what my opinion on this subject is ~ Don’t rent or lease large equipment for your home unless you absolutely have to ~ Doing so could seriously cause a huge hole in your bank account!

Buying or Selling Real Estate?  Call "Eunice" for Results ~ It's a "Given"!