Rent-to-Own Sheds: Weighing the Pros and Cons of Rent-to-Own Sheds

Rent-to-Own Sheds: Weighing the Pros and Cons of Rent-to-Own Sheds

If you're staring at a clutter-filled garage or paying a monthly fee for a self-storage unit, a new backyard shed probably sounds like the perfect solution. But if you don't have thousands in cash lying around, you're likely considering a Rent-to-Own (RTO) shed program.

RTO is a popular way to get a high quality shed with minimal upfront cost and no credit check. However, it’s not a one-size-fits-all solution. To help you make the right choice, we've broken down exactly how Rent-to-Own sheds work, their major advantages and drawbacks, and the essential questions to ask before you sign on the dotted line.

What is Rent-to-Own?

A Rent-to-Own agreement is essentially a lease agreement with an option to purchase. It is not a traditional loan or financing.

How it Works: You pay a fixed monthly "rental fee" for a specified term (typically 24 to 60 months). A portion of each payment goes toward the rental fee, and the remainder is applied toward the shed's original cash price.
Ownership: The shed remains the property of the RTO company until you make the final payment. Once all payments are complete, ownership is transferred to you. There is no penalty for early pay off.
Flexibility: If your situation changes and you no longer need the shed, you can usually terminate the contract and have the company retrieve the building, with no debt or impact on your credit.
No penalty for early payoff: Paying more than the minimum amount helps you reduce your balance faster and lowers the total rental fees over the term.

The Pros: Why RTO Sheds Are So Appealing

The convenience of Rent-to-Own is undeniable, especially if you need a solution quickly.

Pros
No Credit Check	This is the biggest draw. Your approval is based on your ability to make the monthly payment, not your credit score.
Low Upfront Cost	You typically only need to pay the first month's rent (and sometimes a small security deposit), not the full purchase price.
Immediate Access Flexible Options	You get the shed delivered and installed right away, letting you start using your extra storage space immediately. You can choose a current inventory model or opt for a custom design model so you can choose your size, style, colors and options.
Alternative to Self-Storage	Monthly payments are often comparable to or less than off-site storage units, but your payments build equity toward an asset you will eventually own.
Flexible Exit Strategy	If you face a financial bind or decide you no longer need the shed, you can return it without penalty to your credit score. You simply forfeit the payments already made.
Early Payoff Options	Most reputable companies allow you to pay off the remaining balance at any time with a discount, saving you from the full cost of the leasing fees.

The Cons: The Hidden Costs You Must Consider

While RTO offers great flexibility, that convenience comes at a premium.

Cons
Highest Overall Cost	Because your payments include a significant "leasing service fee" (instead of traditional interest), the total amount paid over the full term will be higher than the cash price.
Risk of Repossession	Since you don't own the shed until the final payment, missing payments can result in the company legally repossessing the shed. You lose both the shed and all the money you've paid up to that point.
Delayed Ownership & Customization	You are a renter until the final payment. This means you may be legally restricted from making permanent changes, modifications, or selling the shed until the contract is fulfilled.
Loss of Investment	If you decide to return the shed early, all your past monthly payments are lost and they do not get refunded.

5 Critical Questions to Ask Before You Sign the Contract

Never sign an RTO agreement until you have clear answers to these key questions.

Question	Why it Matters
1. What is the Total Rent-to-Own Cost vs. the Cash Price?	You must know the full difference. For example, a $5,000 shed might cost you $7,500 or more over a 36-month RTO term. Calculate the sum of all monthly payments.
2. Is there an Early Payoff Penalty or Fee?	The best RTO plans allow you to pay off the remaining cash balance at any time to save money. Be wary of contracts that force you to pay most of the rental fees even if you pay off early.
3. What is the Late Payment/Default Policy?	Clarify the grace period, late fees, and at what point the company is legally entitled to repossess the building.
4. What are the Maintenance Responsibilities?	Since the shed is on your property, you'll likely be responsible for normal maintenance, repairs, and upkeep, even though you don't officially own it yet. Clarify this in the contract.
5. What is the Return Policy (What is Lost)?	Confirm the process for returning the shed if you can no longer afford the payments. Ensure the contract is clear that your credit will not be affected.

Alternatives to Rent-to-Own

If the overall cost of RTO gives you pause, here are other ways to get your shed:

1. Purchase Outright (Cash Price): This is the cheapest option in the long run. If you can save up the full cash amount, you avoid all rental fees/interest and own the asset immediately.
2. Traditional Financing/Bank Loan: If you have good credit, a personal loan or a Home Equity Line of Credit (HELOC) will almost always have a lower interest rate than the implied rental fees of an RTO contract. You own the shed right away, but you must pass a credit check.
3. Credit Card (Short-Term/Promotional): For smaller sheds, a credit card with a 0% introductory APR can function as interest-free financing if you can pay it off before the promotional period ends. Be extremely careful, as the interest rate after the intro period can be very high.

Wanting to learn more about rent-to-own vs financing? Check out our payment options.

The Final Verdict

Rent-to-Own sheds are an excellent choice if:

You need a shed now and cannot wait to save the full amount.
You don’t want to have a credit inquiry done on your credit at this time.
You cannot qualify for traditional financing due to a low credit score or lack of credit history.
You plan to pay off the shed early to significantly reduce the total cost.
You need a temporary storage solution with the option to buy.

RTO is generally NOT the best choice if:

You have the cash to buy the shed outright.
You qualify for a low-interest bank loan.
You know you will need the full term (48-60 months) to pay it off, as the total cost will be substantially higher.

Take the time to compare the numbers: The extra cost of RTO is the price of flexibility and convenience. Determine if that premium is worth it for your current financial situation and storage needs. Learn more about purchasing a building from Country Cabins.