Karen Van Maanen

Should I be renting appliances?

March 6, 2018

Have you ever sat home at night watching TV on that small screen wishing you could upgrade and you see an ad for appliance rentals? It looks so easy, a few dollars a week for that 60 inches smart TV with the latest technology. But is it as good as it sounds? What really is the true cost and is there a catch?

Do Your Research

On the Australian Securities & Investments Commission’s (ASIC) Money Smart website, they have a number of calculators that will assist you in understanding how these type of financial decisions can impact your hip pocket.

Lets have a look at a scenario I am sure some people find themselves in.

Your TV is old and you would like to upgrade but you don’t have the money. You look on one of the many rental appliances websites and you discover that you can rent a TV for around $30 per week. You think to yourself you can easily afford this. But is there a catch? What would your true cost be?

Rent vs Buy! Which One?

Looking at the table below we see that $31.99 per week over a 36 month contract (3 years) this TV will cost you an enormous $4990.44 or enough to buy the same TV 3 and a half times over. Yikes!!!

Money Smart's Rent vs Buy Calculator — Money Smart’s Rent vs Buy Calculator

Now imagine that you could purchase this item on a credit card even on a high interest rate at 24% and you diligently paid this off over 12 months the total cost of the TV would be $1561.20 or only $166.20 interest over the purchase cost of the unit.

But the best way to purchase that new TV is to save the cash and purchase the unit outright. In doing this it will also give you great bargaining power not to mention save you a bundle of cash over the longer term.

Don’t forget to comment below to share your thoughts and tell us if you have ever rented an appliance.

Sources:

https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps/rent-vs-buy-calculator

https://www.radio-rentals.com.au/tv/thorn-4k-tvs/lg-60-151cm-4k-smart-uhd-tv

https://www.harveynorman.com.au/lg-60-uj654t-4k-ultra-hd-led-lcd-smart-tv.html

Karen Van Maanen

Karen Van Maanen has a passion for all things property and she is the Head Property Mentor at Real Wealth Australia. Karen has a property portfolio of 13 properties after adding two new developments to her portfolio. She is currently working on a major renovation of a 1960s home with her partner and is constantly working on new ideas to expand her portfolio. Karen has been featured in a number of property investment magazines like Your Investment Property Magazine and was highly commended as a runner up in their “Investor of the year” competition in 2014. Karen has one crucial piece of advice for investors: even though it’s important to invest as soon as possible it is critical to educate yourself about property investment first. In doing this you can avoid some of the mistakes people commonly make to build a portfolio that will give you a comfortable retirement. Click here to read all about Karen Van Maanen and her property investment journey.