Rent-to-own is a sound sales tool for shed builders.
It is true that rent-to-own contracts require some extra time and effort, but it is also true that increased sales and customer satisfaction more than makeup for the extra effort.
It is also true that there are building rental returns to consider. But these can be turned into an advantage.
BUILDER/DEALER BENEFITS
Rent-to-own provides the shed builder with an opportunity to greatly increase shed sales to a customer base that is already present in the local market. It’s the storage solution for customers that do not have the credit for standard financing. These individuals become potential customers as soon as RTO is made available.
Offering simple rent-to-own will increase the size of a local customer base—all this without having to increase the number of sales lots or the geographical size of the area you serve.
There is no increase in risk; the rent-to-own company assumes that risk and only a little more time is required to help a customer complete the needed contract. The builder and dealer get the retail sale at full retail price and can return their capital to what they do best: Build and sell sheds.
What about returned sheds? Does this cause a problem for shed dealers? This does not need to be a problem. The returned shed can be used as a leader for new customers. Buyers look for bargains. A rental return brings customers to the sales lot eager to buy, whether used or new.
CUSTOMER BENEFITS
Rent-to-own is also good for the customer. It can solve the problem of needed storage for customers who do not have the credit for standard financing. Now they have the ability to get and use a storage building even though their budget does not allow for an outright purchase. Now they have the option of having a shed at their home that they can one day own.
Secure, dry storage at home, with the goal of ownership, is a very attractive opportunity for the customer.
There is no credit hassle for the customer with the rent-to-own program. The RTO company minimizes its risk by maintaining ownership of the rental building until the contract is completed while at the same time serving the customer.
Shed customers sometimes face the challenge of economic change from a job loss (such as because of COVID-19) or a move because of a job change. The rented building can be returned or moved if need be—all this without the damaging loss of being locked out of the possibility of future shed ownership. Later this same customer may become a repeat customer when their circumstances change.
Teaming with the right rent-to-own company means success for both the shed builder and the rental company. Many of the perceived negatives of rent-to-own can be eliminated by partnering with a rental company that is knowledgeable, professional, and that has the financial resources for long-term growth.
The RTO company with excellent customer service is going to add to the builder’s success because the customer’s satisfaction with the financing company is going to be reflected to the builder as well.
Rent-to-own is more than having some money and buying some sheds. The RTO company needs to understand and be in compliance with rent-to-own laws. “Flying by the seat of their pants” is a recipe for disaster. No one can be sure how long they will be able to survive. This is true for both parties.
It is our experience that maintaining a high degree of legal and financial excellence develops a healthy business environment for all.
Rent-to-own is good for each party involved. The customer has their need for storage met while they work toward ownership. The builder increases sales in their already working marketplace. The rent-to-own company benefits by providing rental options for long-term growth.
