Why I dislike rent-to-own structures is firstly to list a rent-to-own.

Rent-to-own means buying a coffee machine one source instead of paying a monthly amount for the maintenance and servicing.

For the rent of the machine you have a predetermined term of the coffee machine after which you now own that machine so instead of buying that machine for 20,000 round, you pay a thousand round for 24 months, at the end of those 24 months you now own that machine.

Now why I typically don’t like it is that most rent-to-owns come with a maintenance or service plan within the rent-to-own term so for the first two years, no problem, something goes wrong you sort it.

You phone the company you got the machine from, they come and fix it for you–perfect. The problem comes in after that period, and this is where coffee machines usually play up, so you essentially pays a premium to get a maintenance service plan but after the term your maintenance and service plan has gone away and that’s when you most need it.

So number one reason why I dislike rent-to-own plans is that all your servicing that you paid for disappears when you need it.

The second reason that I don’t like rent-to-own structures is rent-to-own structures are incredibly rigid, it’s essentially identical to buying a machine. Let’s say you go through a rent-to-own structure and your needs change.

Six months down the line you get more staff members or six month down the line you get less staff members and their coffee machines no longer right for you, you can’t do anything about it. You’ve essentially bought that machine over an extended term, that’s it.

The second thing is that if you have now that machine which you’ve bought and over time you want to upgrade because coffee machines go out of fashion quickly, again, same problem you’re stuck with that machine whereas n a normal rental structure you have all the flexibility available to you, you can change at any time, there’s just so many options available to you.

And lastly why I don’t like rent-to-own structures is that is just cost you more in the long run, right?

Instead of buying a machine for 20,000 round you now have to spend 24,000 round in this example to own that machine so you might say ‘okay great, but what if we can’t afford a machine?’.

Well if you can’t afford a machine almost always straight rental is a better route to go, and why is a straight rental and not a rent-to-own a better route to go?

Well because most rentals work on what they call a ‘discounted rental basis’ which means because you’re buying coffee from the company you’ll get super, super low rentals.

So instead of in two years you spending 24,000 round on rentals, you spend somewhere like 5,000 or 6,000 rain on rentals because you’ll be spending a certain amount on coffee–a certain amount with the company on coffee and through that they’ll discount you’re rental rates and that’s where rental almost always makes more sense than rent-to-own structures. Hope that helps, hope that lets you choose the right machine for you and the right structure.