Knowing when to buy or rent
Confusion sets in when a person has a decision to make on a product, by not knowing if it’s better to buy or to rent a property. There are several factors that can influence your choice at every moment, and you need to weigh your options appropriately before choosing. One factor that determines what to do is how much money that is available or budgeted for that needed item. Amount paid for renting a product is significantly less than the amount it’ll cost to purchase same item. One thing that influences your decision is the use of that item that is needed. For example, you have a meeting scheduled in a different country, so you’ll need a private jet to go to that country for the meeting. Buying a private jet will not be wise especially considering the cost of managing one, so it will be better to rent a private jet especially if such meetings rarely come up.
Taking a car as another example, it’s better to buy a car than to rent because the vehicle will be yours for the rest of your life, although you’ll bear risks associated with having a car. When you rent a car, and there is a need of using a vehicle daily, then you’ll only be enriching the lease company. It’s advised to save the money used to rent, and pay outrightly for the vehicle since it is something that is vital to your daily life. Things that are bought are vital things, and are needed daily, if not, it’s wiser to rent like in the first example. Generally, when there are enough funds, you should buy anything you need instead of renting, and there’s a chance of reselling that commodity if it’s not needed anymore. People who are money conscious don’t buy things that depreciates in value because there will be no reselling value when those items are no longer needed.
Renting means that you’re going to be investing in a commodity that isn’t yours, so it should be avoided, but this lies on amount of money in your purse. To create a clearer picture, let’s say that an item costs $5000 to buy, but to rent that item costs $500 per day, and you’ve got just $7000 as cash. Assuming that you’ll need this product for 20 consecutive days, it’s better to buy it than rent because renting is going to cost $10000 when you could have just paid $5000. On another hand, assuming that you just need that particular item for 3 days, then it’s advisable to rent it for 3 days instead of paying for something that will not be useful after the third day. Every situation is peculiar, and the option that is picked depends on the need for a product.
Some times buying is just a waste of resources especially if there’s a low probability of using such item more than one time. People normally rent tuxedos since they’re only worn once in a blue moon, so there’s no need of wasting money to buy one. A novel is a perfect example of something that you should rent since you’ll probably not read it more than one time, unless you want to create a library. The significance of a book can determine if you should buy or rent it, and if you want to share with others, then buying will not be a bad idea. When you’re testing a new device, it’s ideal to rent one before going on to buy yours, so that you can have enough experience on how it works. Going straight to buy yours might backfire, and funds will end up being wasted.
To end, if you’re confused about buying or renting any particular product, you should look at the price and length of rental, then compare it to the amount it will cost to buy. Your answer will be laid before you, so if there will be more gain when you rent, then you have to go with that option. After checking, and you see that it will be more profitable to buy, then buying the commodity is the best option to take. Huge sums of cash can be saved just by knowing when to buy and rent.