Should you rent or buy new furniture for your home?
Furniture rental is a good option if you are going to be staying in a place for a very short time or if you are on a tight budget and do not want to spend a bomb. But if you want your furniture to last you long, then just buy it.
Ok, but before you make a decision, let’s help you look at the good and bad of both.
Our furniture needs at our homes have usually been satisfied by either flat-out purchasing it, using some granny’s ‘hand-me-downs’, or buying it from thrift stores. You might have even DIY-ed some stuff from Pinterest or bought some second-hand stuff on OLX. If you don’t like the whole furniture management business, you might have closed the matter by getting yourself a fully furnished flat. Who wants the headache of bringing that couch up the stairs, as Ross did in Friends, right?
Why do people want to rent furniture though? As per a FICCI report, access is the new ‘ownership’ for millennials as people seem to prefer to enjoy the renting experience. This is because you can enjoy the experience without spending a bomb on buying or owning the item. The trend seems to be present in every aspect – be it hailing an Ola or Uber (over buying a car), renting luxury clothes (over buying them), working from WeWork or working from a cafe (over buying a workplace), renting homes and furniture (over buying them).
Also, a growth in the number of people co-living in cities, frequent shifting due to lifestyle requirements, rising costs of owning items, and the affordability of renting items are driving a rise in the renting culture.
But what’s better: Renting furniture or buying it?
How much does renting actually cost, vs buying?
We browsed through websites of furniture rentals like Furlenco, and compared them with purchase costs. Here is what we found:
- A Queen Bed with a mattress with a bedside table costs Rs 740 per month while a storage-inclusive bed costs Rs 1,280/month. This has to be rented for a minimum of 12 months, so your cost is about Rs 8,880 to Rs 15,360. You can buy a similar bed for about Rs 18,000 to 24,000 online (and for a lot cheaper from physical markets).
- A two-door wardrobe made of ebony can be rented for Rs 400/month, so your annual cost is about Rs 4,800. You can buy one for Rs 8,000 to 12,000.
- A 4-seater dining table will cost you Rs 1,110/month, a double-door fridge costs you about Rs 1,040/month and a washing machine can be rented at Rs 640/month.
- Meanwhile, you can buy a similar table for Rs 11,000 to Rs 18,000; a fridge for Rs 15,000 to Rs 25,000; and a washing machine for Rs 12,000 to Rs 25,000.
- You can also opt for combos that combine multiple items together for a slightly cheaper cost or opt for a subscription service where customers can opt for 6-15 furniture items at one price. The cost ranges somewhere from Rs 3,600 to Rs 6,300/month, meaning about Rs 43,200 to Rs 75,600 per annum.
Other charges if you rent
Along with the rental charges, you also have to pay separately for insurance charges (that cover the furniture from liquid spills, scratches and dents) and GST. Renting furniture will cost you somewhere between Rs 3,500 to Rs 7,000 depending on what you get, and though this isn’t really cheap, customers seem to fall for the innumerable support benefits that renting brings: free delivery, set-up, relocation, maintenance, cleaning and obviously some new snaps.
Other charges if you buy:
When you buy, you must account for:
1. Depreciation: Your furniture will probably not last you your entire life and its value will keep reducing every year. When you sell your furniture, your resale value will be much lesser because of depreciation.
2. Opportunity cost: Say your friend invested Rs 70,000 in buying some furniture while you spent Rs 15,000 p.a. in renting furniture (ie. Rs 1,250/month). Also, assume that the purchased asset depreciates by 20% every year. Here, since you temporarily save Rs 55,000 for one year by renting (Rs 70K-15K), say you invest this amount in some security and receive a return of 7%. By the end of the first year, you receive a return of Rs 3,850 on your investment of Rs 55,000, which is the opportunity cost for your friend.
We crunched out these numbers based on an excel calculation provided by Labour Law Advisor, and here’s what we found:
If you are keen to experiment with your furniture styles or want to take your time to select the best furniture for your home, renting furniture can be enjoyable. But financially, buying it might be better. What works for you?