Shed Rentals

Garden Shed "Rentals"... BEWARE !

Have you ever thought about getting one of those sheds you see frequently on lots when your driving to places doing your errands?  Ever thought about getting one of these shedS for some extra storage in your yard?  Well, if you have keep reading !

Now this article only applies to those folks that can't afford to simply write a check to pay for the shed.  This article is directed to those folks, like me, who can't afford to pay in full for the shed, but still have the need for extra storage.  This article is about how easy they make it to get a shed onto your property with very little out-of-pocket money and NO credit check.  First RED flag... combine easy, with little or no money down, with NO credit check... and you can guess what comes next... it's called PREDATORY LENDING !

Yes folks... lending money to the people who can least afford it = is usually PREDATORY ! 

Now, when you think of PREDATORY LENDING most folks think OK so the interest may be a little higher.  But when sheds are the product... it seems the sky is the limit.  Only with the shed industry they don't call it interest... they call it "rental fees".   In short, the "rental" fees are exorbitant to say the least.  I'm talking in the neighborhood of 50%-60%. 

I will use my situation as an example.  I needed a shed to store my household belongings when I moved.  I found a shed I liked and contracted to buy it.  The total cost to purchase outright was $10,757.60.  They also offered a 90-day same as cash price for the building.  My plan was to get the building on my property and within 90-days pay it off (same as cash).  Well, as many folks know, the best laid plans don't always work out like you thought they would.  Unforeseen circumstances happened and I could not pay off the shed.  The contract(s) are usually written in such a fashion that if you don't pay off the shed in 90-days, the normal "rental" contract kicks in.  This means that you simply keep paying the rental fee you had been in the first 90-days.  In my case that was a payment of $464.57 a month for 60-months.  If by some chance you had the money later you could always "pay-off" the shed at any time and the pay-off would be less than the sum of the total payments.  

Now comes the scary part where the "vig" (mafia term for high interest) comes to light.  Its been 36-months since I got the shed and I wondered exactly how much I would need to pay in order to pay-off the shed (I still had 24 more payments left ($11,149.68).  The rental company quoted me a price of $3050.06 to pay-off the shed and own it outright.  WOW... a $8,099.62 difference !  In other words if I can't pay the $3050.06 (which I can't) I will need to pay $8,099.62 more than the current pay-off.  (I feel a little sick right now writing this).   Come to find out that when I make a monthly payment ($464.57) only 45% of the payment goes to pay down the principal.  In other words the interest rate in in effect 55% on the "rental" of the shed.  If this isn't predatory lending than I don't know what is.

So... the overall picture in "renting" the shed is I will pay $27,934.20 for a $10,757.60 shed... $17,176.60 in "rental" fees over 5-years !!! 

Now, some might say that what's the big deal, when I'm done paying on my 30-year mortgage for my home, it will have cost me almost 3-times the original cost of the home.  Well, the difference here is homes appreciate and sheds depreciate (just like cars).  NO WAY could I sell this shed for $27,934.20 two years from now.  I would be very lucky of I could get $5,000.00 for it.  Whereas my home will likely have appreciated almost 300% and I can sell it for what it cost me in payments.

Folks... I write this not to highlight my stupidity, but to hopefully educate others that these shed "rentals" are VERY EXPENSIVE if you can not pay cash up-front for the cost.  If you can't afford to write a check for the shed... think VERY hard about "renting" it.   AND... if you fill it up with your stuff, and can not make the payments... they have the right to take the shed back (because remember... you're just "renting" it until you pay it off - you don't "own" it until it's paid off).  Many folks buy ("rent") these sheds for the newest trend... "Tiny Homes", or "Shed to House" conversions.  Just think... if you "rent" the shed, and can't make the payments... all the work in conversion (insulation, electric, plumbing, drywall, etc) goes back to the rental company and you do not get reimbursed for those expences.  Not to mention you get thrown out of your HOME. 

Here is the other thing to remember... just like a car purchase, the dealer doesn't lend you the money... the finance company does.  With this shed the building was bought from Old Hickory Buildings.  This was the second building I bought from them.  The first one I paid cash for.  Although Old Hickory Buildings had nothing to do with the predatory lending because the "renting" of the building was facilitated by Parthenon Building Rental, LLC.  Parthenon is the company that charges the exorbitant "rental" fees.  However I could not in good conscience recommend Old Hickory Buildings because of some delivery issues (which is another 3rd party company that delivers the sheds), but that is a story for another day.

Bottom line folks... be VERY aware of the overall costs in "renting" these sheds.  If you don't have the cash to pay outright for the shed, just know that the shed if going to be VERY expensive to purchase on a "rental" contract.

Have you had a similiar experience with situations like this ?  Leave a comment below and let others know that mine is not an isolated situation.  I suspect tens of thousands of these sheds are sold on rental contract every year.  It's a shame that the shed rental companies feel the need to fleese those that can't afford to pay upfront.  I'm not saying they should make a profit, but 55% is PREDATORY !