# Hot Water Tank Rental



## Mortgage u/w (Feb 6, 2014)

I own a rental property for which 1 unit, the tank is currently rented - it was transferred to me when I bought the place and I just kept it as is. The other tanks in the property are all owned but more than 10 years old and I'm looking to replace them all.

The cost of renting each tank is about $10 per month. This includes their best tank, installation, pan, guarantee and any future servicing if required. To buy from them is a little over $750 which includes installation. If I buy from a big box store and have a plumber install, I might save a little but the guarantee and protection from the rental company is unmatched.

I am leaning towards renting for three reasons. The first obvious reason is that there is no cost to front. Then there is the no hassle installation, guarantee and protection. Third, I can use the monthly expense as a deduction at the end of the year.

When doing the math, buying is cheaper in the long run. The cost of buying is covered in 6 years of renting. And, I still get to deduct the expense but as a 1 time deduction only. 

If it were my own property, I would definitely buy. But as a rental, it seems to make more sense to rent. Wondering what others think of this and if there is something I'm missing or am I just overthinking the whole issue?


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## like_to_retire (Oct 9, 2016)

Mortgage u/w said:


> If it were my own property, I would definitely buy. But as a rental, it seems to make more sense to rent. Wondering what others think of this and if there is something I'm missing or am I just overthinking the whole issue?


I can only comment on owning, and in that regard, it's a slam dunk that buying beats rental hands down.

An electric rental is around $14 a month. That's $168 a year. Personally, all my water heaters have easily lasted 15 years, so that's $2520.

I can go to Home Depot and get an electric water heater for about $400 and stick it in myself. 

So, $400 versus $2520.

Case closed for owning.

ltr


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## nobleea (Oct 11, 2013)

Agreed. The rest of the country seems flabbergasted that people in one or two provinces have been convinced that renting a HWT is even remotely worth it.
Even an emergency replacement on Sunday night costs under $1000.


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## OhGreatGuru (May 24, 2009)

But this is a rental property, with a number (unspecified) of units. It seems counter-intuitive to go back to renting when all but one of the water heaters is owned now. But the rental fee covers installation, maintenance, and replacement when needed. A lot easier to manage, unless owner is a hands-on guy (or gal) who likes to do plumbing. 

PS to OP - if you are looking at replacing all the tanks in the property, you should get quotes from contractor(s) for the whole job. The unit cost might be a lot lower than estimates based on replacing only one tank. Also lean on the rental company to find out what the cost of buying your way out of the current contract is.


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## fireseeker (Jul 24, 2017)

I married into a rental tank. After a few years or pushing money out the door every month, I called to ask about a buyout. The tank was 12 or so years old IIRC, and they asked for two months rent -- less than $30.
That was seven years ago ...


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## Just a Guy (Mar 27, 2012)

I've found that the companies rarely do anything except collect the rental fee from you. If that makes you feel better, go ahead and pay for it. 

I don't know why you're looking to replace a 10 year old tank in the first place, especially if they aren't showing any signs of failure. Most tanks are guaranteed for between 6 and 12 years, depending on the price, by the manufacturer. They are very simple devices, with few parts that can actually break (the dip tube being the most common failure and those are a cheap and easy fix). 

Personally, I'd never rent and only replace on an as-needed basis, especially in a rental. Those current tanks probably have 5-10 years left at least.

BTW, I just picked up a 40 gal natural gas one for one of my places. It was brand new, but an "older" model. Between that, and a contractor discount, I paid just over $350. Had to unscrew two hoses, the gas line, and the venting (all already in place) less than 10 minutes of work and I'm good for a couple more decades.


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## Mortgage u/w (Feb 6, 2014)

Thanks for all the inputs. I just want to remind that I'm specifically talking about a rental property and not my own property since I would certainly not consider renting a HWT for my own home. Considering that I can expense the HWT lease fees for my rental property, I figured it makes somewhat sense.

There is no denying that buying is cheaper than renting - even at their inflated prices. 

So my next question is about the HWT itself. I can purchase and install myself - this would be the cheapest option possible. The main brand they offer here is GIANT. They have 3 models which have minor build differences but mostly, their guarantee differs. Base model goes for $360 which has a 6 years warranty on leaks and 1 year on parts. Middle model is $480 with 8 years on leaks and 5 years on parts. Top model is $560 with 10 years on leaks and 5 years on parts. Do you think there is really a major difference in build quality or would I just be paying more for longer warranty? After all, there are only 2 elements and a thermostat to worry about - the rest is just an insulated tank.


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## like_to_retire (Oct 9, 2016)

Mortgage u/w said:


> So my next question is about the HWT itself. I can purchase and install myself - this would be the cheapest option possible. The main brand they offer here is GIANT. They have 3 models which have minor build differences but mostly, their guarantee differs. Base model goes for $360 which has a 6 years warranty on leaks and 1 year on parts. Middle model is $480 with 8 years on leaks and 5 years on parts. Top model is $560 with 10 years on leaks and 5 years on parts. Do you think there is really a major difference in build quality or would I just be paying more for longer warranty? After all, there are only 2 elements and a thermostat to worry about - the rest is just an insulated tank.


I've always purchased the cheap one, with the thinking that they're all the same quality with different warranties. They always last about 15 years regardless (in my experience). As mentioned earlier, it's often the dip tube that goes first, evidenced by white particles building up when you take the aerator off a faucet. They're especially easy to replace if you took the time to install flexible connections on the copper lines.

ltr


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## Just a Guy (Mar 27, 2012)

The idea that "it's a rental", so price doesn't matter is typical "government" budget thinking. "So what if it costs 10 times as much as it should...we'll just raise taxes" (or it's a deduction, a rent increase, whatever). 

Being a landlord means being a business owner. You have to make sound financial decisions or you'll eventually go broke. You need to look long term, what happens if you have a future correction and rents have to decrease, that $10/month can suddenly become significant.

There are reasons why many landlords fail, being lazy and not fiscally conservative are two of them.

As for which version, I haven't had enough tanks fail to ever notice a difference. I'd suggest talking to the vendor, or doing some research on the internet or in consumer reports.


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## nobleea (Oct 11, 2013)

Mortgage u/w said:


> Considering that I can expense the HWT lease fees for my rental property, I figured it makes somewhat sense.


You still have to pay for it, just means you don't pay income taxes on it (essentially). So you're getting the lease for 60 cents on the dollar or whatever your marginal rate is. I'd bet that's still more expensive in the long run than buying a new tank outright.

As JAG says, they're pretty simple things with few parts to break. The life of the tank will have more to do with the incoming water chemistry than the quality or warranty on the tank. Not to mention that getting warranty service or repairs on a product that usually fails at the most inconvenient time is probably not going to meet your renter's expectations in terms of timely turnaround.


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## OptsyEagle (Nov 29, 2009)

Mortgage u/w said:


> They have 3 models which have minor build differences but mostly, their guarantee differs. Base model goes for $360 which has a 6 years warranty on leaks and 1 year on parts. Middle model is $480 with 8 years on leaks and 5 years on parts. Top model is $560 with 10 years on leaks and 5 years on parts. Do you think there is really a major difference in build quality or would I just be paying more for longer warranty? After all, there are only 2 elements and a thermostat to worry about - the rest is just an insulated tank.


I doubt you are getting those prices directly from Giant. Most likely you are getting them from a retailer (like Home Depot) or a contractor. Many times you will find that they are all the same tank. The difference is an extended warranty being offered by the retailer. If they called it an extended warranty no one would buy it, but when they tell you it is a better tank (which it is not) many people buy it. It is uncanny. They do no research. They just believe them, since it must be the case, since one is significantly higher priced then the other. Sure that proves it.

I found this out when I looked up a model number I had. I had the cheap one of course, but on the manufacturers website they had a model number and a manufacturers model number. I wondered why they would have two different model numbers, with the real one, not even on the tank itself, and then it hit me. I checked out all the specs and everything I could find on the various model numbers and found out that the two tanks were identical, as far as the manufacturer was concerned. They added a new set of model numbers for the retailer so that the average customer could not easily figure this out. 

Anyway, If you take the $120 difference between the $480 and $360, you will never recoup that from the warranty. It does NOT cover labour, so you will be doing all the work. The only parts that can break are a couple of elements or thermostats. Both easy to replace and maybe $40 or $50 and I have personally never had one fail...and good luck getting them to pay for it if it does. A neat marketing scam but certainly not worth it.

So, buy the cheap one.

I will add, that in my research, I was doing it on Rheem tanks sold at Home Depot. I suspect all the manufacturers are probably doing this same scam, since as you can see the profit benefit to the retailer is huge. In your case the high priced one might have an extra magnesium anode rod, but the bottom two are almost certainly the identical tank.


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## Just a Guy (Mar 27, 2012)

I will also point out that these are very low margin products. The one I bought at the store, with all the discounts, actually sold for less than wholesale according to my plumber.


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## Mortgage u/w (Feb 6, 2014)

OptsyEagle said:


> I doubt you are getting those prices directly from Giant. Most likely you are getting them from a retailer (like Home Depot) or a contractor. Many times you will find that they are all the same tank. The difference is an extended warranty being offered by the retailer. If they called it an extended warranty no one would buy it, but when they tell you it is a better tank (which it is not) many people buy it. It is uncanny. They do no research. They just believe them, since it must be the case, since one is significantly higher priced then the other. Sure that proves it.
> 
> I found this out when I looked up a model number I had. I had the cheap one of course, but on the manufacturers website they had a model number and a manufacturers model number. I wondered why they would have two different model numbers, with the real one, not even on the tank itself, and then it hit me. I checked out all the specs and everything I could find on the various model numbers and found out that the two tanks were identical, as far as the manufacturer was concerned. They added a new set of model numbers for the retailer so that the average customer could not easily figure this out.
> 
> ...


Prices are indeed from a big box store. Giant does not sell directly to consumers. And you are right, every retailer has a different number to distinguish their own line but the product is essentially the same. The main difference I can see between the 3 tanks is indeed the anode rod which is supposedly superior on the top model and it comes with a brass drain rather than a plastic one. The base model is the only one which is top feed where the others are bottom fed - I guess it eliminates the dip tube when bottom fed.

Looks like I will replace on a "need only" basis and install myself. I will also get out of the lease with the one tank that is currently rented - its just under 10 years old and their buy-out offer is $220. I will negotiate this and try get out for much cheaper - if they refuse, they can come pick it up.


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## OptsyEagle (Nov 29, 2009)

Yes. My research showed the same tank only for the bottom two tanks. The extra anode rod will give it some longer leak prevention by increasing the time the tank will be rust free. Even with one rod, most tanks will last 12 years no problem and if you have a catch pan under it, I would keep them for 15 years.

Also, installation is a lot easier now with the invention of shark bite fittings. I have used them many times and those suckers bite well. I am sure you could hang your body weight off of one and the copper would break before the shark bite connection would give way. I have never had any leaks and they are just a snap to put on. No problem at all. They do have sharkbite flexible hoses for hot water heater installations but be careful about how much bend you might need. The term flexible is used a little loosely. It has a pex inner core and it can flex but nothing like what you might use to connect your faucets or toilets...and they are not cheap, but compared to using a plumber, it would be a fraction of the cost. Just thought I would add that in. Nothing is as good as a good soldered connection, but shark bites and compression fittings are good enough, as far as I am concerned. I hate soldering.


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## Mortgage u/w (Feb 6, 2014)

Just a Guy said:


> I will also point out that these are very low margin products. The one I bought at the store, with all the discounts, actually sold for less than wholesale according to my plumber.


Yeah, I often see promotions such as taxes paid or 15%-20% off so would be great to purchase at that point.
I have also checked out kijiji and found several deals where people are getting rid of their fairly new HWT for cheap.


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## CalgaryPotato (Mar 7, 2015)

OptsyEagle said:


> I doubt you are getting those prices directly from Giant. Most likely you are getting them from a retailer (like Home Depot) or a contractor. Many times you will find that they are all the same tank. The difference is an extended warranty being offered by the retailer. If they called it an extended warranty no one would buy it, but when they tell you it is a better tank (which it is not) many people buy it.


That is interesting. A bit off topic, but this is how Electrolux sells their vacuum models too. The styling between different versions looks a little fancier, but it's still the exact same vacuum as far as the major parts go. The difference is you pay more within the base price for a longer warranty. Which given something like an Electrolux where the motor never breaks is unnecessary. 

Hot water tank life also varies by water quality too though I will say. In Calgary, in an old house with old pipes we have so much build up in our water, that our tanks here rarely make it to 10 years. And that is with replacing the rod after 5 years.


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## Mortgage u/w (Feb 6, 2014)

CalgaryPotato said:


> That is interesting. A bit off topic, but this is how Electrolux sells their vacuum models too. The styling between different versions looks a little fancier, but it's still the exact same vacuum as far as the major parts go. The difference is you pay more within the base price for a longer warranty. Which given something like an Electrolux where the motor never breaks is unnecessary.


I think that is how most companies operate. Take Costco for example - all their products are "exclusive". Most notable with their electronics. Same Samsung TV, for example, but the model number will be different and not found anywhere else. 

There are, sometimes, very slight differences to these "exclusive" products. My TV which I got at Costco differed from the same model at Best Buy because it had no Bluetooth. Not having this feature (and the fact its Costco) saved me $300. 

I would think HWT (or vacuums for that matter) will also have slight variations depending on who is selling them. Each retailer must custom order their products to align their prices according to the clientele they cater to.


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## CalgaryPotato (Mar 7, 2015)

Mortgage u/w said:


> I think that is how most companies operate. Take Costco for example - all their products are "exclusive". Most notable with their electronics. Same Samsung TV, for example, but the model number will be different and not found anywhere else.
> 
> There are, sometimes, very slight differences to these "exclusive" products. My TV which I got at Costco differed from the same model at Best Buy because it had no Bluetooth. Not having this feature (and the fact its Costco) saved me $300.
> 
> I would think HWT (or vacuums for that matter) will also have slight variations depending on who is selling them. Each retailer must custom order their products to align their prices according to the clientele they cater to.


I always figured that was largely away of getting around price matching.

The electrolux is something different because they same models are sold everywhere they are sold. And they openly say that the only real difference between the models is the warranty. Otherwise they would only sell 1 vacuum.


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## Mortgage u/w (Feb 6, 2014)

Just thought of providing an update.

Coincidence or not, it just so happened that a tenant called me regarding the hot water - would run out after a quick shower. I knew it was simply an element, but since tank was 10 years old, decided to go ahead and replace it instead.

Big box store had 15% off. So decided to replace the tanks in 2 units and change them myself. Cost was $350 each and about an hour of my time for each tank. 

Sure beats renting - even if its only $10 per month.


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## Just a Guy (Mar 27, 2012)

Chances are it was the dip tube, not the element, but I'm glad you've seen the light.


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