Rent-To-Own or Subscription Furniture? Substantial Differences You Need to Know About

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Rent-To-Own or Subscription Furniture? Substantial Differences You Need to Know About

Once upon a time, there was a 27-year-old pharmaceutical sales executive named Kalie Richardson who lived in Phoenix. She was single, successful, and enjoyed the finer things in life like gourmet restaurants, beautiful clothes, her posh apartment, and traveling as much as possible.

Kalie loved Phoenix, but one day, she got a job offer that would take her to Austin, TX. Kalie also loved Austin with their music scene and their cosmopolitan style, and she jumped at the chance to explore a new city.

When it came time to move, Kalie decided to sell the furniture in her Phoenix apartment rather than take it with her. Moving it was going to be a hassle, plus the apartment she found in downtown Austin was cool and funky, and she wanted to furnish it with pieces that were meant for a space like that.

After selling all of the furniture from her Phoenix apartment, Kalie felt free, almost lighter not having so many possessions. 

Since she wasn’t sure how long she would be in Austin, she was not so big on dropping a bunch of money on all new furniture again either, so she started tossing around the idea of renting the furniture instead of buying it.

So she set off to shop for rental furniture. The first place Kalie went was a rent-to-own store. She pulled into the strip mall and parked her car in front of the store, and her eyes were drawn to the signs painted on the windows that said “no credit, no problem!”  As she walked through the door she saw furniture that was nice enough, but not really the cool and interesting pieces she was hoping for. 

Kalie wasn’t looking to rent furniture because she couldn’t afford it, she just didn’t want to be tied down to a lot of “stuff,” and the rent-to-own store just didn’t feel like the right fit for her. She was starting to wonder if she would have to buy furniture again after all.

On a whim, Kalie mentioned her experience to Sara, the property manager at her apartment complex, and she was so glad she did! Sara told her to check into subscription furniture at Furniture Options. 

Subscription furniture is a cool new way to experience having luxury furnishings without having to own them which is exactly what Kalie was hoping for! Furniture Options had even rented furniture to other people in Kalie’s new building and were already familiar with the layouts of the apartments.

Kalie immediately went online to check it out and saw several pieces she loved, so she picked out what she needed, signed up for a one-year subscription, and scheduled delivery for the following Monday.

Like Kalie, when you think about rental furniture, probably the first thing that comes to mind is rent-to-own. And while rent-to-own is a big part of the rental furniture industry, it is not the only way to rent furniture and there are some pretty big differences in how each segment works.

In this article, we’ll look at both the rent-to-own and subscription rental business models, learn how they work, and who will be best served by each option.


Pros & Cons

The Pros and Cons of Rent-To-Own Furniture

The concept of rent-to-own furniture was developed in the 1970s and is targeted toward mostly low-income and military customers. According to Rent-A-Center, the company is “empowering those striving to enjoy the American dream, individuals and families that have damaged, limited, or no credit, to get big-ticket items they need.”1

Rent-to-own stores allow customers to get household furnishings like furniture and electronics on a rent-to-own basis with relatively low weekly payments. The lease term typically ranges from 12-36 months, and at the end of the term they own the item.

Customers of rent-to-own stores are usually looking for a way to buy furniture, but they don’t have the cash to purchase or the credit score that would allow them to qualify for financing. With rent-to-own, you only need to show proof of income and you can get what you need immediately making payments over the next few years.

Like other businesses that are geared toward people without a good credit history, there are trade-offs to getting this type of service. For example, by the time the lease is completed, a customer on a rent-to-own contract will have paid upwards of three times the retail price of the furniture.

Most financial experts warn against using a rent-to-own company and an article on NerdWallet points to a growing number of complaints. Thousands of customers have reported being harassed by store employees trying to collect a payment, and others say their credit scores were unfairly damaged even after their accounts had been settled.2

So is it ever a good idea to buy furniture on a rent-to-own contract? Maybe. If you have bad credit but absolutely need something, rent-to-own does offer a solution. For example, let’s say your refrigerator goes out and it is going to take a few weeks to get it repaired. Rent-to-own may be a good way to get a short-term solution.

However, if you do find yourself in this situation, be sure to ask a lot of questions and read the documents carefully. It is important that you fully understand the terms of the contract and the fees associated with it.



Subscription Furniture

Subscription furniture and rent-to-own both allow you to get furniture quickly without having to plunk down a bunch of money all at once, but the similarities essentially end there.

While rent-to-own businesses target lower-income consumers with credit problems, subscription furniture companies typically work with more affluent clients like Kalie Richardson. 

The price point is typically higher, and good credit is required in order to enter a contract. But that allows subscription furniture companies to offer monthly rather than weekly payments.

Subscription clients tend to be millennials with a higher income that prefer not to own a lot of “things.” Renting their home is more of a lifestyle choice rather than a stepping stone to eventual homeownership. And since “a staggering 74 percent of Americans prioritize experiences over products” according to Forbes, it is a trend that is here to stay.3

One of the perks of that lifestyle is the ability to move on a whim or when a new opportunity arises in a different area. This makes subscription furniture ideal since customers can furnish an apartment with pieces that fit a specific space. Then a year or two down the line when they move somewhere else, they can send it all back and start over with new furniture.

Not all subscription customers are always on the move though. Many just want to stay on top of the trends with their homes. Imagine you are shopping for a chair to go in your bedroom and you absolutely fall in love with a funky hot pink velvet chaise. 

If you are in a subscription furniture showroom or online catalog, you can grab that chaise with zero regrets because you know that six months down the road when you’re sick of hot pink velvet, you can easily change it out for white leather or whatever else is speaking to you.

That said, if you decide that the pink velvet is a keeper, you can certainly give it a “forever home.” Most subscription furniture plans will allow you to purchase the items you love. Just pay the retail price minus whatever rent payments you’ve already made.

That’s a pretty stark contrast to the hefty upcharges of rent-to-own!



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