Furnaces | 8 Min.

Should You Rent a Furnace in Ontario?

Written by Gundeep Singh

When faced with the decision of how to ensure your home remains warm and inviting during the colder months, the question of whether to rent a furnace becomes particularly pressing. For many homeowners in Ontario, the affordability and convenience of furnace rentals present an attractive solution, granting both budget flexibility and peace of mind. Factors such as your budget, the expected length of stay in your current residence, and the desire for maintenance responsibility all play critical roles in determining the appropriate path for your heating needs. Moreover, renting a furnace can eliminate concerns over unforeseen repair costs, offering cost certainty and relieving the burden of potential maintenance issues.

As you navigate the intricacies of furnace rentals, understanding the trade-offs between renting and buying is essential for making an informed decision that aligns with your lifestyle and financial goals. This article serves to shed light on the advantages and disadvantages of renting a furnace, including a thorough exploration of the financial implications of purchasing compared to renting. Furthermore, we will undertake a comparative analysis of the long-term costs and benefits associated with each option, equipping you with the knowledge to decide which rental equipment or furnace rental company aligns with your specific needs. Through detailed insights and expert guidance, you’ll be positioned to determine whether to rent a furnace, calculate potential rental fees, and explore the variety of HVAC rental programs available, all while keeping furnace rental costs in check. With the right rental option at your fingertips, maintaining your home’s comfort can be both practical and economical.

Understanding Furnace Rentals

Understanding the intricacies of furnace rentals is a pivotal step in making an informed decision that suits your heating needs and financial circumstances. Here are some essential points to consider:

1. Rental Agreements and Advantages:
   • Before choosing to rent a furnace, it’s crucial to comprehend the rental agreements thoroughly, as they outline the terms of your commitment, including duration, monthly fees, and included services.
   • Renting a furnace offers the advantage of affordability and peace of mind, particularly in Ontario, where this option is popular due to its convenience and the elimination of unexpected repair costs.
2. Financial Considerations:
   • While the monthly cost may appear lower when renting, the total expense over the life of the contract can be significantly higher than purchasing a furnace outright.
   • It’s important to note that most rental contracts do not lead to ownership; at the contract’s end, you may face decisions about renewing the lease, purchasing the equipment at an additional cost, or paying a removal fee.
3. Limitations and Long-Term Impacts:
   • A rental agreement may restrict your choice of service provider for maintenance and repairs. Many contracts stipulate that you must use the rental company’s services, limiting your options.
   • Renting can potentially decrease your home’s value or complicate its sale, as rental contracts often place a lien or another form of interest against your property, which can be a red flag for potential buyers.

When considering a furnace rental, it’s also essential to weigh the immediate perceived affordability against the long-term costs. Monthly payments for renting a furnace can start as low as $50, compared to an upfront cost of $4,000 or more when buying a new unit. However, these rental fees can accumulate, potentially leading to a total cost that exceeds the price of buying a furnace. Additionally, while maintenance and repair services are typically included in the rental, this convenience can come with the trade-off of reduced flexibility in choosing your service providers and an impact on your home equity.

In the context of selling your home, a rented furnace can become a contentious point during negotiations. New homeowners will inherit the lease, which may not be an attractive proposition for them. Therefore, it’s imperative to consider how a furnace rental agreement might affect future property transactions.

As you navigate the decision to rent a furnace, keep these factors in mind to ensure that your choice aligns with your long-term financial and lifestyle goals.

Pros of Renting a Furnace

When you opt to rent a furnace, you’re choosing a path that offers several immediate and long-term benefits. Here’s a closer look at the advantages:

• Lower Upfront Costs: The decision to rent a furnace is often driven by the appeal of low initial investment. Unlike purchasing, where you might face a large upfront cost, renting typically requires no down payment, making it a more accessible option for some homeowners. This can be particularly advantageous if you’re not ready to commit a substantial amount of money upfront for a new heating system.
• Inclusive Maintenance and Repairs: One of the most significant benefits of renting is the inclusion of maintenance and repairs in the rental agreement. This means that if your furnace encounters any issues, the costs and responsibilities of fixing it fall to the rental company, not you. This can provide you with peace of mind, knowing that your furnace will be taken care of without any additional expenses on your part. Some rental contracts even guarantee round-the-clock service, ensuring that help is available whenever you need it.
• Easy Upgrades and High-Efficiency Savings: With a rental option, you can take advantage of the latest high-efficiency HVAC units without the burden of a large expense. These advanced models can save up to 30% on your energy bills due to their superior AFUE ratings. Furthermore, the rental programs are often supported by manufacturers and are eligible for all applicable available rebates, adding to your savings. And when it’s time to upgrade, you can easily transition to a newer model, ensuring your home is always equipped with the latest in energy-efficient technology.
• Transferable Contracts: If you decide to move, the rental contract for your furnace is fully transferable to the new homeowners. This can potentially simplify the selling process, as it offers the new owners an immediate heating solution without the need for a large investment.
• Cost Certainty and Additional Services: Renting a furnace often comes with an affordable monthly cost, which provides you with cost certainty and peace of mind as potential repairs and regular maintenance are covered. Additional services, such as free installation and repair, are typically included, further reducing any unexpected financial burdens.
• Rebate Eligibility and No Upfront Fees: When you choose to rent, all supply and installation costs are included with no upfront fees. This comprehensive approach not only eases the financial strain but also ensures that you can take full advantage of government rebates that are available for high-efficiency furnaces.

By considering these pros, you can see how renting a furnace could be a practical solution for your home heating needs. It’s important to weigh these benefits against your circumstances and long-term financial plans to determine if a furnace rental aligns with your overall goals.

Cons of Renting a Furnace

While the prospect of a rent furnace may seem appealing due to its low upfront costs and inclusive maintenance, there are several cons that you should consider to make an informed decision:

• Long-Term Costs: Though a rent furnace option appears to offer affordability with low monthly payments, the total expense over time can be deceiving. Over a typical 12-15-year contract, the cumulative rental fees can surpass the cost of purchasing a furnace outright, making it a more expensive option in the long run.
• Lack of Ownership: Unlike purchasing a furnace, renting does not allow you to own the asset. Instead, it becomes a liability, with no equity added to your property value. This absence of ownership benefits means missing out on potential rebates, tax incentives, and promotions that come with purchasing a furnace.
• Contractual Obligations and Limitations:
  • Rigidity: Furnace rental contracts can be lengthy, often extending to 10-15 years or more, locking you into continuous payments with high-interest rates.
  • Limited Control: You may find yourself with restricted ability to make modifications or upgrades to the furnace as needed, due to the limitations set by the rental agreement.
  • Service Provider Constraints: With a rental, maintenance and repairs are typically included, but you have no choice in the service provider, which can lead to inconvenience if the rental company’s service technicians are fully booked or unavailable.
• Impact on Home Sale: If you decide to sell your home, a rented furnace can complicate the process. Potential buyers may be discouraged by the need to assume the rental contract or the additional cost to pay it out. Furthermore, rental equipment can potentially reduce your home’s resale value, as home prices are typically based on owned furnaces.
• End of Contract Scenarios: At the end of the rental contract, you may face a ‘rent-to-own’ situation with a high buyout fee, or you might have to pay a removal fee to have the furnace taken out, which adds to the overall cost.
• Warranty and Price Fluctuations: Rental agreements may offer limited warranty coverage, and there’s always the potential for rental fee increases over time, which can affect your budget and the overall value of the rental.

Before deciding to rent a furnace, it’s crucial to weigh these cons against the pros and consider how they align with your long-term financial and lifestyle goals. Remember, the allure of a lower initial investment does not always equate to savings over time, and the restrictions and potential complications of a rental agreement can impact your home’s value and your flexibility.

The Financial Implications of Buying a Furnace

When you’re considering the financial implications of buying a furnace, the long-term benefits could sway your decision towards ownership rather than opting for rental equipment. Here are some key financial aspects to keep in mind:

• Long-Term Savings: On average, homeowners who choose to buy a furnace can save up to 45% over time compared to those who rent, even when a maintenance plan is included. This saving is due to the absence of ongoing rental fees and the potential for lower energy costs thanks to the high efficiency of modern furnaces.
• Government Incentives: By purchasing a new HVAC system, you become eligible for various government grants and rebates, which are not available when you rent a furnace. These incentives can significantly reduce the initial cost of the furnace, making the purchase more affordable.
• Flexible Financing: If the upfront cost of buying a furnace seems daunting, financing options are available that allow you to spread the cost over time. This flexibility ensures that you can select a payment plan that aligns with your budget, which is a benefit not typically offered by a furnace rental company.

When it comes to efficiency and environmental impact, purchasing a furnace also has distinct advantages:

• Energy Efficiency: Modern gas furnaces boast efficiencies of up to 98%, which not only benefits the environment but also leads to substantial savings on your energy bills. High-efficiency furnaces with AFUE ratings of 90% or higher ensure improved air quality and energy savings.
• Durability and Cost-Effectiveness: High-efficiency furnaces are designed to last 15-20 years with proper maintenance. Investing in such a unit means you’ll enjoy even heat distribution and energy savings for many years, making the purchase more cost-effective than renting in the long run.
• Ownership Perks: When you buy a furnace, it becomes an asset to your home, potentially increasing its value. You also have the freedom to choose your provider for installation and service, which can lead to better service quality and pricing.

The upfront cost of a furnace varies depending on the type and efficiency:

• Cost Range: Depending on the fuel type, the cost of a new furnace can range from $1,700 to $9,700, with installation included. Natural gas furnaces are the most common and fall within this price range.
• Type-Specific Prices: Electric furnaces may cost between $1,600 to $6,200, while oil furnaces can range from $4,300 to $9,200, including installation costs.
• High-Efficiency Premium: Although high-efficiency gas furnaces can be $700 to $1,500 more expensive than mid-efficiency models, their higher energy efficiency ratings translate into long-term savings on utility bills.

In summary, while the initial investment in a furnace may seem significant, the long-term financial benefits, coupled with the freedom of choice and potential property value increase, make buying a furnace a financially sound decision. By exploring the various furnace prices and considering the available rebates, you can ensure that your furnace purchase aligns with your financial and comfort needs, ultimately providing you with a cost-effective and efficient heating solution for your home.

Ownership Advantages and Challenges

When weighing the decision to purchase your HVAC equipment, it’s important to consider both the advantages and challenges that come with ownership. Here are some key points to keep in mind:

Ownership Advantages

• Personalized Service Options: As the owner of your HVAC system, you have the freedom to choose your own service providers and protection plans. This ensures service that is tailored to your specific needs and preferences, rather than being limited to the offerings of a single rental company.
• Increased Home Value: Owning your HVAC equipment can increase the value of your home, a significant advantage when it comes time to sell. It simplifies the selling process by eliminating the complications that come with transferring rental agreements to new homeowners.
• Equity Building and Flexibility: With ownership, you’re not just purchasing a furnace; you’re investing in your property. Building equity can be a smart financial move, and you’ll enjoy more flexibility when it comes to upgrades or changes to your system. However, remember that you will be responsible for maintenance and repairs, which can be a con for some homeowners.
• Enhanced Comfort and Efficiency: A new furnace can offer improved heating efficiency and comfort with even heat distribution, which is not only good for your wallet but also for your overall comfort at home.

Ownership Challenges

• Maintenance Responsibility: As a homeowner, you will need to stay on top of regular maintenance, including annual cleaning and filter replacement, to ensure your furnace operates at peak performance.
• Safety and Upkeep: Particularly with oil furnaces, there are safety risks that must be managed. Leaking oil tanks and improper venting can be hazardous, so proper maintenance is crucial for safety and environmental protection.
• Installation Considerations: The type of furnace you choose depends on various factors, including the availability of energy sources and the size of your building. It’s recommended to have a professional handle the installation to ensure it’s done correctly.
• Advanced Features: Consider investing in additional features such as variable speed engines and programmable thermostats, which can further increase the performance and efficiency of your furnace.

By understanding these ownership advantages and challenges, you can make a more informed decision on whether to rent a furnace or invest in your own HVAC equipment. Keep in mind that while the initial cost may be higher when buying, the long-term benefits of ownership, such as increased home value and personalization, often outweigh the convenience of rental programs and their associated fees.

Comparative Analysis: Renting vs. Buying Over Time

When analyzing the long-term implications of renting versus buying a furnace, the decision can significantly affect your financial trajectory and home comfort. Here’s a comparative analysis to guide you:

• Understanding HVAC Systems:
  • Before making a decision, it’s crucial to understand the different types of HVAC systems available and how to choose the right one for your home. This knowledge will inform whether the rental equipment available meets your specific needs or if purchasing allows for a more tailored solution.
  • Systems vary in terms of efficiency, size, and technology. Renting may limit you to what the rental company offers, whereas buying allows you to select a system that is perfectly suited for your home’s layout and your personal comfort preferences.
• Cost Comparison Over Time:
  • Initial Costs: Renting a furnace typically involves lower initial costs, with little to no down payment, while purchasing requires a substantial upfront investment.
  • Long-Term Expenses: Over the years, the monthly rental fee accumulates, potentially exceeding the purchase price of a furnace. In contrast, buying a furnace may result in lower overall costs, especially when considering the lifespan of a high-efficiency unit.
• Flexibility and Control:
  • Rental Agreements: Renting a furnace often comes with long-term contracts and limited flexibility to change or upgrade your system. You’re also bound to the rental company’s terms for maintenance and service, which may not always align with your preferences.
  • Ownership: Buying a furnace gives you full control over the unit. You can select your service provider, choose when to upgrade, and take advantage of ownership benefits such as warranties and rebates.

In summary, renting may seem like a convenient option with lower upfront costs, but it’s important to consider the long-term financial implications and the lack of control over the HVAC system. On the other hand, purchasing a furnace requires a larger initial investment but can offer significant savings and flexibility over time. Your decision should be based on a thorough understanding of different HVAC systems and a careful evaluation of your long-term financial and comfort goals.

Furnace Rental vs. Purchase

Conclusion

Navigating the choice between renting and buying a furnace is indeed a significant decision that warrants careful consideration of long-term financial impacts, freedom of service provider selection, and the potential to enhance home equity. Our exploration reveals that while renting offers low upfront costs and maintenance peace of mind, ownership promises long-term savings, personalization, and valuable property enhancement. Reflecting on these insights enables homeowners to align their heating system decisions with their lifestyle needs and financial strategies, ensuring a warm home environment and sound investment for the future.

Deciding which heating option best serves your home’s comfort and your fiscal health is no small feat, but armed with a comprehensive understanding of each path’s pros and cons, you stand prepared to make an informed choice. If exploring the ease and certainty of renting aligns with your needs, delve further into available furnace rental options to secure the ideal heating solution and embark on a decision that keeps both your home and wallet comfortably warm.

FAQ

Can I choose my own service provider when I rent a furnace?

This depends on your rental contract's terms. Some contracts may require you to use the rental company's service providers, while others may allow you to choose your own as long as they meet the contract's conditions.

Are there any hidden fees associated with renting a furnace?

Some rental contracts may include additional fees such as installation, removal, or buyout fees. It's important to read your contract carefully to understand all potential costs.

Can I purchase the furnace at the end of the rental contract?

This depends on your rental contract's terms. Some contracts may allow you to purchase the furnace at the end of the rental period, while others may require you to return the furnace or pay a removal fee.

Can I cancel the rental contract early?

Some rental contracts may allow for early termination with a fee, while others may not provide provisions for early cancellation. It's important to understand your contract's terms to know your options for early cancellation.

Is renting a furnace a good idea?

The decision to rent a furnace depends on your unique needs and financial situation. Renting can be a convenient and affordable short-term solution, but it might be more costly in the long run. It's important to weigh the pros and cons and consider alternatives before deciding.

Can I rent a high-efficiency furnace?

Yes, most rental companies offer a range of furnace models, including high-efficiency units. However, the monthly rental fee might be higher for these models due to their higher upfront costs.

Is a furnace rental contract transferable if I sell my home?

Most rental contracts allow for transfer to a new homeowner. However, some potential buyers may be hesitant to assume a rental contract, which could affect your home's appeal.

Does renting a furnace affect my home equity?

Renting a furnace does not directly affect your home equity. However, the cumulative cost of renting a furnace could potentially impact your financial situation and your ability to build equity through mortgage payments.

Can I rent a furnace if I have bad credit?

Some rental companies do not require credit checks, making it possible for homeowners with bad credit to rent a furnace. However, it's important to understand the long-term costs and contractual obligations associated with renting a furnace.

Are there government rebates available for renting a furnace?

Government rebates are typically available for purchasing energy-efficient appliances, including furnaces. It's advisable to check with your local government or utility company to understand what rebates or incentives might be available.