Should you rent that easy chair to lounge around in or just buy it?4 min read . Updated: 15 Oct 2019, 10:13 PM IST
- A lot of millennials prefer renting furniture and appliances but it doesn’t always make sense to do so
- If you’re sure you’d be living in a place for over two years, then buying furniture may be a better option
Mumbai-based Utsav Saxena, 27, has been renting furniture for about 14 months now by shelling out as much as ₹1,850 every month for a double bed and wardrobe, which you could otherwise buy for ₹15,000. Although he has spent much more on rent, easy installation, transfer facility and the option to upgrade to a new furniture is what works for him. “The biggest plus is that I don’t have to block a chunk of my capital for the product," said Saxena, a financial consultant.
According to a 2019 Deloitte report titled Unravelling the Indian Consumer, India has the world’s largest millennial population in absolute terms, who constitute nearly 34% of the population. With more and more millennials moving away from home for education and jobs, platforms offering FaaS (Furniture as a service) are becoming popular. Established furniture retailers such as IKEA too are working on the FaaS model. But before you go out and rent that sofa, evaluate the pros and cons.
HOW IT WORKS
Geetansh Bamania, CEO and founder, RentoMojo, a furniture rental platform, said an average individual is changing their jobs and hence their house, every 17-18 months.
The dynamic nature of jobs today is making people switch cities sooner than ever before. Here’s where the FaaS platforms saw an opportunity. “Urban millennials believe in living in the moment and are not bothered about owning expensive things. For them, it is important to live a life that prioritizes comfort. And subscription as a way of life suits that mindset," said Ajith Mohan Karimpana, founder and CEO, Furlenco, a furniture rental platform.
Furniture renting portals deliver everything from cupboards and beds to washing machines and refrigerators in 48-72 hours. The delivery is free of cost. Most of them also help you move the furniture as and when you change cities, though some may charge a fee. Then there are additional services such as a free trial period of 15 days to a month, annual deep cleaning and insurance for damages.
WHAT IT COSTS
The rent will depend on the kind of furniture you pick and the tenure. Saxena said Furlenco, from where he rented his furniture from, offers a discount of 5-10% if you pay for three months and 15-20% if you pay for 12 months or more in advance. According to Karimpana, a three- or five-seater sofa with cushions costs ₹1,049-2,399 a month at Furlenco. Similarly, a bed, mattress, pillows and bedsheet would cost ₹1,099-2,500 a month. The prices include tax and installation cost.
All FaaS platforms keep a security amount. “On booking confirmation, a fixed amount is collected as security deposit. This is fully refundable if the products are returned in good condition. The amount varies between products but is roughly equal to the rent for one to two months," said Bamania.
It’s important to find out the cost of damages before you zero down on a company. Remember that most of this furniture would be pre-used and may not come to you in the best condition. “RentoMojo does not charge for the normal wear and tear caused due to usage. However, damage which makes the furniture functionally unusable is charged and the amount is decided by RentoMojo on a case to case basis," said Bamania. The price you pay for damage caused to electronic appliances, in particular, can be huge, so it’s advisable to assess the condition of the product and be cautious when using them.
Mumbai-based lawyer Devansh Arya, 27, rented furniture from two different companies for a year while he was in Delhi. “The idea of smaller instalments as monthly rent seemed more lucrative than a one-time investment for buying," he said.
Arya and his then flatmate paid about ₹4,500 as rent every month for a couch, a three-seater sofa, a double bed with a side table, refrigerator, washing machine and a microwave oven. But they were not happy with the services. “The customer service is extremely poor and inefficient. I had a lot of trouble getting the refund of the security deposit from one of the portals. And even though I threatened legal action, the company refused to even hear my grievances. Eventually I had to let go of about ₹3,000 because of the problems any legal recourse involves. We chose this particular company because it offered some of the cheapest deals," said Arya.
Before renting, speak to people who’ve used the platform earlier or at least go through the user reviews.
Renting furniture makes sense if you move from one city to another often. “I have family and friends who moved temporarily to a new city and rented some furniture and appliances because they didn’t know for how long they would live there and did not have the money to buy all these essentials at once. I think there is a demand (for FaaS) because our lives change so quickly and drastically today," said Shweta Jain, chief executive officer and founder, Investography Pvt. Ltd, a financial planning firm.
But it’s important to make a distinction between needs and wants. “Postpone dining table or appliances such as a dishwasher. Instead of sofas, go with chairs in the beginning. If there is an extra bedroom, you don’t necessarily have to get an extra bed unless you have a roommate," said Jain.
Also, if you’re sure you’d be living in a place for over two years, then buying furniture may be a better option, especially with several no-cost EMI options in the market. “Students certainly can consider renting because they’d most likely move out in a short span of time but if you are working and have a stable job, ownership is a better option because even if you opt for an EMI, you’d own the product which would have some resale value," said Anil Talreja, partner, Deloitte India.
If you do opt for renting, go through the fine print and understand the terms and conditions, especially when it comes to termination of the agreement and property damage.