Archive for the ‘Rent vs Buy’ Category

The Problem

Today, we can buy just about anything we want, which to some extent is a great thing, but let’s not ignore the downside.  Buying new means piling up all sorts of things, filling up garages and homes, potentially having to pay credit card interest and insurance.  Buying new prevents that money from being used for something else, and, as often is the case, we don’t even use what we bought sufficiently to have justified the purchase in the first place.  Buying new can also push us deeper into debt and contribute to waste and pollution.  Is there a need to have 10 lawn mowers on one street so each can mow 200 square feet of lawn, if one lawnmower can do the job for all?  Does it make sense to drive to stores on the other side of town, when these items are already available right in your neighborhood?

The iRent2u Advantage

When we focus on utility rather then on ownership, and rent rather then buy, we oftentimes get more bang for our buck.  We can save money through renting and gain flexibility in the process.  We can use more space to live rather than using it to store things, or we can live in smaller and more affordable homes if there is less need for storage space.  We can spend money only when we need to and can thus always rent the latest and most trendy stuff, instead of being stuck with stuff we bought ten years ago.  We can also use items wherever we need them. For example we can have rental golf clubs shipped to our hotel or country club so we don’t have to carry them around when we go on a trip.  Or we can rent RVs in remote areas to explore new regions instead of being limited to our own area.  We can also rent items for special occasions, which we normally could not afford to buy, such as a Ferrari, expensive jewelry, or a designer hand-bag.  Lastly, if we don’t blow our cash or sink further into debt to buy what we could easily rent, we will be in a better position to get through the current economic crisis.

The iRent2u Solution

iRent2u offers a powerful and easy to use search engine, where you can browse by keywords, categories, or location, to find items for rent, any time of the day or night. You can sort search results by price and distance, visualize them on a map, compare them with our compare tool to find the best deal, and use our rental cart to start “shopping around” for rentals.  You can save searches, and subscribe to RSS feeds to get updates about the latest items in your area of interest.  The rental process is very easy to use, and carries you through a few simple steps.  The rental terms and logistics can be negotiated with lenders directly,the rental contract is pre-filled with information about the renter, the lender, the item, and respective terms and conditions.  An inventory management system provides complete visibility on every item you have rented.  A communication system helps to discuss and clarify any question you might have for the lender.  A dashboard lists all available rental history and advises you what to do next.  And with iRent2u, all that is for free.

Popularity: 14% [?]

Economic Crisis
The world wide economic meltdown is hurting people in all corners of the globe. Here at iRentu2, although we are not immune to the pain and uncertainty many of you are experiencing, we believe that we are in a unique position to help.

On Forbes.com the other day, Nouriel Roubini, an economist at the Stern School of Business, wrote an interesting article titled The United States of Ponzi that really gets to the core of what brought us into this colossal mess.

“Americans lived in a “Made-off” and Ponzi bubble economy for a decade or even longer. Madoff is the mirror of the American economy and of its over-leveraged agents: a house of cards of leverage over leverage by households, financial firms and corporations that has now collapsed in a heap.

When you put zero down on your home, and you thus have no equity in your home, your leverage is literally infinite and you are playing a Ponzi game. And the bank that lent you, with zero down, a NINJA (no income, no jobs and assets) liar loan that was interest-only for a while, with negative amortization and an initial teaser rate, was also playing a Ponzi game…

…A country that has–for over 25 years–spent more than income and thus run an endless string of current account deficit–and has thus become the largest net foreign debtor in the world (with net foreign liabilities that are likely to be over $3 trillion by the end of this year)–is also a Ponzi country that may eventually default on its foreign debt if it does not, over time, tighten its belt and start running smaller current account deficits and actual trade surpluses.
Whenever you persistently consume more than your income year after year (a household with negative savings, a government with budget deficit, a firm or financial institution with persistent losses, a country with a current account deficit) you are playing a Ponzi game. In the jargon of formal economics, you are not satisfying your long-run inter-temporal budget constraint as you borrow to finance the interest rate on your previous debt, and are thus following an unsustainable debt dynamics that eventually leads to outright insolvency.”

In short, he is saying that a large percentage of American businesses, governments (local, state, Federal) and people have spent money in an economically unsustainable manner.

Further, implicit in his Ponzi analogy are the gross ethical lapses that poured fuel on the unsustainable spending fire. How else could a mortgage broker close their eyes and sell a NINJA loan, in the understanding that they would pass the risk onto others, while they get paid immediately and therefore didn’t care. Or the ethical lapses of those in Congress that essentially created the market for these loans by directing Freddie/Fannie to purchase them, all with the lofty intent of increasing homeownership rates (ie. buying votes for reelection). This without even mentioning the ethical blind spots of numerous Wall Street banks, credit rating agencies, regulators…

Lastly, he mentions the current account deficit, which in non-economic jargon means that the US purchased more goods & services from China, than China did from the USA. This deficit was made up by the US borrowing money from China in the form of US Government Securities, which will have to be paid back through higher taxes or inflation.

This outsourcing of our production of consumer products to China has had a highly detrimental affect on the Environment. China does not maintain the high environmental standards that we do here in the US. So as they rape the Chinese environment, with the common man wondering when they will see the sun again (the sun is often blocked due to the tons of pollution in the air), we sit back, breathing fresh air while enjoying the fruits of other’s suffering. Additionally, think of all the fuel burned to ship the raw materials to China for processing and then even more fuel burned to deliver the finished consumer goods to the US. All of which added together, leads to a long-term approach to fulfilling our consumer wants in an environmentally unsustainable manner.

Renting on iRent2u can lead to the fulfillment of our consumer needs and desires in a financially sustainable manner. Instead of going further in debt to purchase something, come find it on iRent2u. Think of how many vacation homes were purchased on crazy debt in the last 6 years that are only used once per year. If you are only going to use a large ticket item once or twice a year, rent instead of buy, it is the economically sustainable route to take,

Instead of selling mortgages to those without jobs, credit history and savings, or leveraging yourself to the verge of financial oblivion to purchase and flip that last vacation home, join the growing iRent2u community and thereby earn more from what you already have. iRent2u is an ethically sustainable course of action.

Arguably, we have all of the consumer goods from overseas that we will need for the next 5 years, if we are willing to lend them between each other. If we buy less and rent more, we can make a new start, in an environmentally sustainable direction, all done without compulsion from our fearless leaders in D.C.

We as a Nation will climb out of the hole we have dug ourselves when we accept responsibility and begin to approach life with environmental, ethical and financial sustainability top of mind. Here at iRent2u, we are happy to help lead the way.

Popularity: 15% [?]

Rent Golf Clubs

In this episode of the “What We Rent” series, we want to tell you about some very fun sport rentals that are available anywhere in the US. Those rentals are top of the line golf club rentals, available through the mail to anywhere in the contiguous 48 states.

Hassle Free Traveling

For many of you across the US as Summer approaches, it is time yet again to thing about your Golf game. Unlike Winter, where the most popular locations to golf are Florida, South Carolina, and Southern California, the US is great for golfing just about everywhere in the Summer. So what is the biggest problem with traveling to a distant location to go golfing? Well one big annoyance is taking your clubs on the plane! You have to lug them through the airport, sometimes pay additional fees to take them, and worry that they are going to get lost. Maybe you are just traveling on a business trip, and now you have to explain to your wife and co-workers how you are planning to “work the entire time” while bringing a huge bag of irons. Traveling has already gotten difficult enough. You have to arrive at the airport two hours early, practically strip to your underwear to make it through security, carry your bags, find a taxi or rent a car – and the last thing you need is one more thing to carry and try to cram into your rental car along with your luggage. 


Try It, Before You Buy It!

Or maybe you are considering buying a set of golf clubs. Then you might want to check out and test what’s out there, before buying it.

Want To Be Flexible & Trendy?

Or maybe you just want to always use the latest technology on the green, every time you play golf, instead of hanging on to the same set of Golf Clubs over many years.

The Solution

Through iRent2u, you have an easy way to rent golf clubs for corporate outings and tournaments, for business travelers, or individuals, throughout the United States. This is better than just going to a course and renting some beaten up old clubs. This is a full service where you get to pick from top line pro golf clubs, and have them delivered right to your hotel, resort or golf course. And when you are done, you just stick them back in the box they came in, give them back to the concierge in your hotel or drop them at a nearby package place like federal express or UPS, and forget about them.

One of our Lenders offers whole set collections, where one set includes a driver, a complete set of irons, a putter, and the bag itself. The complete sets of clubs are rented by the single day, or the weekend. Daily rentals are delivered as early as the day before your outing, and are picked up after your outing is complete. Weekend rentals are available for two full days throughout the week. Check out the listings here.

Popularity: 23% [?]

Rent a Truck vs. Buy a Truck

Today’s topic is the comparison between the benefits that come from renting a truck as opposed to buying one. Many people love their trucks. This is great, and we are not saying that you need to go out and sell one if you have it, or that you should never buy one. This post is for those people who think it would be nice to have an extra truck to haul things occasionally, and are trying to determine if it is worth it to buy one. It is our conclusion that in most cases it makes sense to just stick with the car you have, save money on gas & insurance, and help the environment by renting a truck when you need it (hopefully through this site). To bring up a specific example, we will discuss Tim’s sister and her decision three years ago to buy an extra truck. They needed to haul things from time to time, and wanted the ease of just having a truck always available. They planned to do a lot of work on their yard over the coming years, and found a good deal on a truck. But did it make sense to buy it? That’s what we will analyze here.

Cost of Owning a Truck

So let’s look at what she bought. She bought a 1997 Chevy Silverado 1500. At that time she spent about $12,000. Today that same truck is worth about $7,000. So in the last three years she has lost about $5,000 on the value of the truck. So the first cost we will list to own this truck for three years is $5,000.Cost 1 - $5,000

But what other costs has she had? Well the next most obvious one is insurance. We called her and asked what she paid in insurance every month, and she told us $40 a month, which comes out to $480 a year. Multiply that by three years and you have another $1,440 in insurance payments. That will be cost number two.
Cost 2 - $1,440

Besides these costs, let’s assume they did the recommended oil changes every 3 months or 3,000 miles. An oil change every three months over three years comes to 12 oil changes. At JiffyLube that is about $35 a pop, so at 12 times over 3 years that makes another $420. That will be cost number three.
Cost 3 - $210

Of course you need to maintain your truck, but as Tim’s sister didn’t drive it around much let’s just say she ended up spending $1,000 over three years. That is the cost to replace the tires, get new windshield wipers, replace a headlight or two, fix a couple parts, and just basically keep it in running condition. That will be cost number four, basic maintenance.
Cost 4 - $1,000

There are other costs that we will not add on, but need to be considered. How about the annoyance of having a truck sitting in your driveway for three years gathering dust & moss? The fact that you need to wash it probably once a month. The fact that you have to move it every now and then to get beneath it. Maybe it drips oil in your driveway? There is a real annoyance factor to having this truck, but since it is hard to quantify we will leave that off the cost.
So let’s add this all up.

Cost 1 - $5,000
Cost 2 - $1,440
Cost 3 - $420
Cost 4 - $1,000
Total = $7, 870 over three years.

So that is the true cost of the truck. And how much did she use it? Well the first year they used it a lot she said, as they were doing yard work. She estimated it at about 20 times. Then the next year it was used a lot less, but they let some friends use it to move a couple times, so we will say it was used 10 times. This last year they have probably used it twice, so their usage has really tapered off. That is a total of 32 uses over 3 years. I rounded it up to 36 trips to make it an even once a month. That is approximately $218 per use of the truck!

Cost of Renting a Truck

So how much does it cost to rent a truck? We checked on U-Haul and it was $19.95 a day plus mileage. So let’s say you spend another $40 in mileage (which is a lot more than normal). We left the gas out because you would be paying it either way. Adding those costs it totals $60 a day to rent a truck from U-Haul. That means that Tim’s sister paid about $180 more per trip by buying a truck than she would have spent on U-Haul! Yikes!

So let’s see what this would have cost Tim’s sister over the course of three years if she had rented every time, and this includes lending it to her friends. Again we rounded up the number of trips to 36 to make it an even once a month for three years.
Cost Per Day - $60
Total Number of Trips – 36
Total Cost = $60 * 36 = $2160 or let’s just say ~ $2200

Over the course of three years that comes to a total difference of about $5,500 that she spent to have a truck sitting in her driveway 365 days of the year. That is a steep price to pay for convenience.
But maybe she is a bad example? How about if you planned to use the truck two times per month? Ignoring the facts that this may increase the amount you have to maintain the truck, let’s see what the difference would be.
Cost Per Day - $60
Total Number of Trips – 62
Total Cost = $60 * 62 = $3720

It still costs almost $4000 more to own the truck than to rent it. So at what point do you reach a breakeven? You would need to rent a truck 127 times to equal the cost of owning it. That is almost once a week, every week, for three years. That is a lot of truck rentals!

So what if you want to have truck instead of a car, and drive it all the time? Maybe you are thinking, “Hey, I like trucks. I want to drive my truck every day.” Well if this is true then great. Don’t let us stop you from getting and driving what you like. But let’s continue to do the comparison so that we can quantify what the difference is between owning and driving a truck and owning and driving a car.

The first cost difference that comes to mind is gas mileage. There are many different models of cars and trucks with different gas mileage, but just for comparisons sake let’s say that a typical truck gets 20 miles per gallon, and a typical car gets 30. The standard that Americans are supposed to be driving each year is 12,000 miles. So our typical truck would need 600 gallons of gas over the course of the year, and the typical car would need 400 gallons of gas for the same amount of miles. At $4 a gallon that is a difference of $800 for the year. For that price you could rent a truck more than 13 times within the year and still break even.
Of course, if you do have a truck, and you use it as often as Tim’s sister – list it on this site! That way you can start making back some of the money you are losing from owning it.

Popularity: 23% [?]