99% of the time it is best to buy instead of rent.
Click here to learn why and also learn the 1% when it is not the best option.
Often buying a water heater will pay for itself in 6-8 years.
The question of whether to rent or own your water heater is really a matter of choice and depends on a variety of factors that each individual will weigh differently. Ideal Heating & Air Conditioning will help you consider factors like your financial situation, the length of time you will stay in your home, and your comfort level with maintaining your water heater. In this blog, we’ll cover the following topics:
1. Buying Your Water Heater Is Usually Better Than Renting
2. Is it Worth Buying Out a Water Heater?
3. Why do People in Ontario Rent Water Heaters?
4. Should I Install my Own Water Heater?
5. Benefits of Owning Your Own Water Heater
6. Benefits of Renting a Water Heater
7. Lifetime Cost Comparison: Buying vs Renting Your Water Heater
8. Should You Rent or Own Your Water Heater?
Read on to learn the pros and cons related to renting and owning a water heater. If you have other questions, please contact an Ideal Heating HVAC specialist.

Before you decide to rent or own your water, consider the pros and cons. (Image Source: Curtis Adams)
To Rent Or Own Your Water Heater - What's Best?
1. Buying Your Water Heater Is Usually Better Than Renting
Side by Side Comparison: Renting vs Buying A Water Heater
Buying your water heater is usually better because it almost always saves you money in the long run instead of renting. The very rare instance this is not the case is if you are not going to be staying in the house long enough to have the upfront investment pay itself off.
Renting vs. buying a water heater is a common debate for homeowners, especially in regions where water heaters are essential. Each option has its pros and cons, depending on factors like cost, convenience, maintenance, and long-term value. Have a look at the comparison below to get started with your research.
Renting a Water Heater
Advantages:
Lower Upfront Cost:
- Renting typically requires no significant upfront investment, making it easier to get a new water heater installed without paying for the full unit.
Maintenance and Repairs Included:
- Most rental agreements cover repairs, replacements, and regular maintenance, so you don’t have to worry about unexpected repair costs.
Flexible Upgrade Options:
- You can often upgrade to a more efficient or larger unit with little to no upfront cost as part of a rental plan.
No Replacement Costs:
- When the water heater reaches the end of its life, the rental company usually replaces it at no additional cost.
- When the water heater reaches the end of its life, the rental company usually replaces it at no additional cost.
Disadvantages:
Higher Long-Term Costs:
- Monthly rental payments can add up over time. If you rent a water heater for many years, you may end up paying significantly more than the cost of buying one outright.
Limited Control:
- You don’t own the water heater, so any changes, upgrades, or repairs have to go through the rental company, which may result in delays.
No Ownership:
- After years of payments, you still don’t own the water heater. If you move or cancel the rental, you may face additional fees for removal or transfer.
Buying a Water Heater
Advantages:
Ownership:
- Once you buy a water heater, it’s yours. No more monthly payments after the initial investment.
Lower Long-Term Costs:
- While the upfront cost is higher, buying a water heater can save you money in the long run since you won’t be paying monthly rental fees.
Increased Home Value:
- Owning a water heater can be a selling point when selling your home. Buyers may prefer homes where appliances are owned outright.
More Options:
- You can choose from a wider variety of models and brands when buying, potentially opting for more energy-efficient models that can lower energy bills over time.
Disadvantages:
Higher Upfront Cost:
- The initial cost of purchasing and installing a water heater can be significant, especially for more efficient or high-capacity models.
Maintenance and Repair Costs:
- When you own the unit, you are responsible for all repairs and maintenance. This could include unexpected repair bills if something goes wrong.
Replacement Costs:
- When the water heater reaches the end of its life (typically 8-12 years for most units), you’ll need to pay for a new unit and its installation.
As you can see, there are pros and cons to both options. We’ll continue to compare the 2 options, including the cost comparisons and other factors to consider.

Buying your water heater can save you money in the long run, but there are other costs involved. (Image Source: energepic.com)
2. Is it Worth Buying Out a Water Heater?
Whether buying out a water heater from a rental agreement is worth it depends on several factors, such as the age of the water heater, the buyout cost, your long-term plans, and the potential savings. Here’s a breakdown to help you decide if buying out a water heater makes sense:
Factors to Consider:
Age of the Water Heater
- New or relatively new (1-3 years): If the water heater is still new, a buyout could be a smart move because you will have many years of use ahead of you without the need to replace the unit soon. This allows you to avoid ongoing rental fees and potentially save money.
- Mid-life (4-8 years): A water heater typically lasts about 10-15 years, so if the unit is around halfway through its lifespan, you need to compare the buyout cost to the potential savings on rental fees. You might save money by buying it out now rather than continuing to pay for the rental.
- Near the end of its lifespan (9-12+ years): If the water heater is nearing the end of its life, buying it out might not be worth it since you’ll likely have to replace it soon. In this case, continuing to rent might be more convenient or cost-effective in the short term.
Buyout Cost
- Compare the buyout cost to replacement: Check how much the buyout would cost and compare it to the cost of purchasing and installing a new water heater. If the buyout is close to or higher than the cost of a new water heater, it’s likely not worth it.
- Factor in savings on rental fees: If the buyout cost is reasonable and you’re planning to stay in your home for several years, you can calculate the savings by eliminating monthly rental fees. For example, if your rental fee is $30/month and the buyout cost is $500, you’d recoup the buyout cost in about 17 months ($30 × 17 = $510).
Potential Savings
- Rental fees over time: Rental fees add up over time. If you expect to live in your home for many years, buying out the unit could save you significant money over the long term by eliminating the monthly rental payments.
- Maintenance costs: If maintenance is included in your rental agreement, consider that buying out the unit means you’ll have to pay for any repairs or servicing going forward. Factor potential repair costs into your decision.
Your Long-Term Plans
- Staying long-term: If you plan to stay in your home for many years, buying out the water heater could save you money in the long run, as you avoid paying perpetual rental fees.
- Short-term stay: If you plan to sell or move soon, it might be better to continue renting. The new owner may prefer the rental arrangement or opt for a new water heater, and buying it out may not be worthwhile for a short period.
After weighing the factors, you can then decide for yourself whether it’s worth buying out a water heater or not. Here’s a summary of when it’s worth buying out a water heater and when it’s not.
When It’s Worth Buying Out a Water Heater:
- The unit is relatively new or mid-life (1-8 years).
- The buyout cost is significantly lower than purchasing a new water heater.
- You plan to stay in the home long enough to recoup the buyout cost through savings on rental fees.
- You’re comfortable with covering maintenance and repair costs.
When It’s Not Worth Buying Out:
- The unit is nearing the end of its lifespan (9+ years).
- The buyout cost is close to or higher than the cost of a new water heater.
- You don’t plan to stay in your home long enough to see savings from the buyout.
- You prefer the convenience of rental maintenance and service.
Evaluating whether it’s worth it or not means calculating the costs moving forward. Multiply your monthly rental fee by the number of months you expect to stay in your home to get a sense of your future costs. For example, if your rental fee is $30/month, the buyout cost is $500, the water heater is 4 years old (with approximately 6 years of life left), the expected, and the expected rental payments for the next 6 years will cost $2,160 ($30/month x 72 months), then buying the water heater out for $500 could save you over $1,600 over the next 6 years!
Buying out a water heater can be worth it if the buyout cost is reasonable, the water heater has plenty of life left, and you plan to stay in your home for a while. However, if the unit is old, the buyout cost is high, or you’re not planning to stay long-term, it might be better to continue renting or consider purchasing a new water heater.

Many new homeowners in Ontario are unaware that they have the option to buy a water heater. (Image Source: Ketut Subiyanto)
3. Why do People in Ontario Rent Water Heaters?
In Ontario, many people rent water heaters instead of buying them outright due to several key reasons. These factors stem from convenience, affordability, and the way the market has historically evolved in the province. Here’s why renting is so popular in Ontario:
Low Upfront Costs
- Renting a water heater requires no large initial investment, which appeals to many homeowners who want to avoid the upfront costs of purchasing a unit and paying for installation. Buying a water heater can cost between $1,000 and $2,000 while renting allows you to spread out the expense over monthly payments of $15 to $40.
Maintenance and Repairs Included
- One of the biggest draws of renting is that maintenance, repairs, and replacements are usually covered by the rental company. This eliminates the stress and financial burden of unexpected repair costs or replacing the water heater if it fails. Many people prefer to pay a predictable monthly fee rather than deal with potentially large expenses for repairs or a new unit.
Hassle-Free Replacement
- Rental agreements typically include free replacement of the water heater when it reaches the end of its life (typically 8-12 years). Homeowners don’t need to worry about when or how to replace the unit, as the rental company handles the entire process. This is attractive to those who value convenience and don’t want to manage appliance maintenance or replacement themselves.
Historical and Market Norms
- Renting water heaters has been the norm in Ontario for decades, partly because utility companies used to dominate the water heater rental market. This tradition has led many homeowners to view renting as the standard practice. Since many homes already come with rental water heaters, new homeowners often continue renting instead of switching to ownership.
Perception of Lower Risk
- Renting is often seen as a low-risk option. Since renters don’t have to worry about repairs, replacements, or breakdowns, it gives them peace of mind. Any issues can be handled with a call to the rental provider, making it a stress-free option for people who don’t want to deal with the complexities of ownership.
Lack of Awareness About Long-Term Costs
- Many homeowners may not be fully aware of the long-term costs of renting. Over the course of 10 to 15 years, renters often end up paying much more in rental fees than they would have if they had purchased the water heater outright. However, because the rental fees are spread out over time, many people don’t think about the overall expense or compare it to the cost of owning a unit.
Convenience for Short-Term Homeowners
- For people who don’t plan to stay in a home long-term, renting can make sense. It offers flexibility without the need to purchase, install, or maintain a water heater. This is especially true for renters or people who anticipate moving within a few years.
Aggressive Marketing by Rental Companies
- Rental companies in Ontario often use aggressive marketing tactics, making it easy to sign up for rental agreements and harder to cancel them. In some cases, the rental terms are built into home purchase agreements, and homeowners may not fully realize they have options to buy. This marketing has contributed to the widespread rental culture in Ontario.
Uncertainty About Ownership Costs
- Some homeowners may avoid buying because they are unsure about the costs of maintenance, repairs, and installation. The rental model eliminates these uncertainties by bundling all those potential expenses into a fixed monthly payment.
Is Renting Still the Best Option?
While renting offers short-term convenience and lower upfront costs, it is often more expensive in the long run. Many homeowners could save money by purchasing a water heater outright, especially if they plan to stay in the home for several years. However, the convenience of renting, along with free maintenance and replacement, continues to make it an appealing option for many Ontarians.

Many homeowners and/or tenants decide to rent their water heater because of the electrical risks. (Image Source: cottonbro studio)
4. Should I Install my Own Water Heater?
Installing your own water heater can be an option, but it depends on several factors such as your skill level, local regulations, and safety considerations. Here’s a breakdown of the key points to consider before deciding whether to install a water heater yourself:
Pros of Installing Your Own Water Heater
Cost Savings:
- One of the main reasons people consider DIY water heater installation is to save money. Professional installation can cost between $500 and $1,500, depending on the complexity of the job and the type of water heater. Installing it yourself can save that labour cost.
Control Over the Installation:
- Doing the installation yourself allows you to choose the exact model, installation location, and any additional components you want, such as upgraded valves or insulation, without relying on a third party.
Scheduling Flexibility:
- By doing it yourself, you don’t have to wait for an available time slot from a contractor. You can work on your own timeline and schedule.
Cons and Challenges of Installing Your Own Water Heater
Complexity and Safety Risks:
- Gas vs. Electric Water Heaters:
- Installing a gas water heater involves working with natural gas lines, which can be dangerous if not handled properly. Incorrect installation could lead to gas leaks, carbon monoxide poisoning, or explosions.
- Electric water heaters also pose risks, including electrical shocks and wiring issues if you don’t follow electrical codes correctly.
- Plumbing Knowledge Required: Properly connecting water lines, installing pressure relief valves, and ensuring the water heater is correctly vented requires a good understanding of plumbing systems. Poor connections can lead to water leaks, water damage, or worse.
- Gas vs. Electric Water Heaters:
Building Codes and Permits:
- Many areas, including parts of Ontario, require that water heater installations follow strict building codes. In some places, a licensed professional must perform the installation, particularly for gas heaters.
- Permits are often required, especially for gas water heaters. If you fail to get the necessary permits or don’t follow local codes, it can cause problems during a home inspection, void warranties, and even lead to fines.
Warranty Issues:
- Some manufacturers void the warranty if a water heater is not installed by a licensed professional. This means that if something goes wrong with the unit, you may have to pay out of pocket for repairs or a replacement, even if the unit itself was faulty.
Time and Effort:
- Installing a water heater can take a lot of time, especially if you’re not experienced. You’ll need to research the proper techniques, source the correct materials, and troubleshoot issues as they arise. What might take a professional a few hours could take a novice much longer.
Post-Installation Support:
- Professionals usually offer warranties on their installation work, meaning they’ll come back and fix any problems that arise shortly after installation. If you do it yourself, you won’t have that peace of mind.
Conclusion: Should You Install Your Own Water Heater?
Consider DIY if you have relevant experience, the installation is straightforward (especially for electric units), and you’re confident that you can meet local codes and safety standards.
Hire a professional if you’re dealing with a gas water heater, complex plumbing/electrical issues, or if local regulations and warranty requirements make DIY a riskier option.
In most cases, especially with gas water heaters or complex setups, it’s safer and more cost-effective in the long run to hire a professional. The safety risks, potential code violations, and the possibility of voiding your warranty are significant downsides to DIY installations.

Homeowners and tenants willing to complete maintenance on their water heater may save money by owning it. (Image Source: Ketut Subiyanto)
5. Benefits of Owning Your Own Water Heater
Here are the top 5 benefits of owning your own water heater:
Lower Long-Term Costs
- Owning a water heater eliminates ongoing rental fees, which can add up significantly over time. While the upfront cost of purchasing and installing a water heater may be higher, you can often save money in the long run. For example, rental fees can cost between $180 and $480 per year, which over a typical 10-15 year lifespan adds up to thousands of dollars more than the cost of owning.
Control Over Maintenance and Repairs
- When you own your water heater, you can choose how and when to maintain it. While renting often includes maintenance, some people prefer to have more control over their equipment. Owning allows you to schedule repairs on your terms, and you can opt for cheaper repair services or do simple maintenance yourself, saving money.
Freedom to Choose Your Unit
- Owning gives you complete control over the type, size, and energy efficiency of your water heater. You can select a model that best fits your household’s hot water needs and energy consumption preferences, whether it’s a traditional tank unit or a more energy-efficient tankless system. Renters often have limited options provided by the rental company.
Increased Home Value
- A new water heater can be a selling point if you plan to sell your home, as prospective buyers often prefer not to take over rental agreements or deal with rental fees. Owning your water heater means that it stays with the home, making it more attractive and potentially increasing your property’s value.
No Rental Company Restrictions
- When you rent a water heater, you’re typically tied to the terms and conditions of the rental company, which may include restrictions on upgrades, modifications, or even switching to a different model. Owning the unit frees you from these restrictions, giving you full control over replacements, upgrades, and any other changes you want to make to your system.
In summary, owning your water heater allows you to save on long-term costs, enjoy freedom in your equipment choices, and avoid the limitations and ongoing fees of rental agreements.

For someone who doesn’t want the hassle of installing or maintaining a water heater, renting is probably their best choice. (Image Source: Pixabay)
6. Benefits of Renting a Water Heater
Here are the top 5 benefits of renting a water heater:
Low Upfront Costs
- Renting eliminates the need for a large initial investment in purchasing and installing a water heater, which can cost between $1,000 and $2,000. Instead, you pay a manageable monthly fee, typically ranging from $15 to $40, making it more affordable for homeowners who want to avoid high upfront expenses.
Free Maintenance and Repairs
- One of the biggest advantages of renting is that maintenance, repairs, and replacements are covered by the rental company. If your water heater breaks down or needs servicing, the company will handle it at no extra cost, saving you the hassle and unexpected expenses of repairs.
Hassle-Free Replacement
- Rental agreements usually include free replacement of the water heater when it reaches the end of its life (typically 8-12 years). The rental company will replace the unit without additional charges, making the process hassle-free and convenient for the homeowner.
Predictable Monthly Costs
- Renting offers fixed, predictable payments, which can make budgeting easier. You don’t need to worry about unexpected repair costs or expensive replacement fees, as these are typically included in your monthly rental payment.
Convenience and Flexibility
- Renting provides flexibility, especially for homeowners who might not plan to stay in the home long-term. Since you don’t own the water heater, you won’t need to worry about selling or replacing it when you move. Plus, rental companies often offer 24/7 customer support, so any issues can be addressed quickly with minimal effort on your part.
In summary, renting a water heater offers low upfront costs, peace of mind through maintenance and repair coverage, and predictable expenses, making it a convenient option for those who prioritize ease and flexibility over long-term cost savings.

Owning a water heater may cost more up front but often saves you money over time. (Image Source: Vlada Karpovich)
7. Lifetime Cost Comparison: Buying vs Renting Your Water Heater
Often buying a water heater will pay for itself in 6-8 years.
Here is how to calculate the break even point in your particular situation
Break Even = Total Water Costs (Installation Cost + Maintenance Costs)/Monthly Rental Costs
Here is an example:
Water Heater Purchase and Installation ($1,800 purchased and installed)
Maintenance & Service Fees over the live of the unit ($199)
Rental Fee ($36.78 per month)
Break Even = (1,800+199)/36.78
= (1,999)/36.78
= 54.3 month
Example Break Even = 4 years and 6 months
In other words in the example if your water heater lasts longer than 4 years and 6 months and you are in the house for longer than 4 years and 6 months you will save money.
Next, let’s look at the cost comparison of renting vs owning. Remember, a water heater has a standard lifespan of 10 to 15 years.
- Renting:
- Typical rental fees range from $15 to $40 per month, depending on the type and size of the water heater. Over a 10-year period, this can amount to $1,800 to $4,800.
- Buying:
- A typical water heater costs between $800 to $2,000, including installation. Over the same 10-year period, the total cost for ownership (including occasional maintenance) may be lower than renting.
Summary:
- Renting tends to be cheaper in the short term but becomes more expensive over 15 years.
- Owning has a higher upfront cost but may save you money over time, especially if you can handle occasional maintenance costs or live in the home long enough to avoid a second water heater purchase.
Renting may be more suitable for people who want flexibility and lower upfront expenses while owning is ideal for those looking for long-term savings.

Whether to rent or own your water heater depends on your individual circumstances. (Image Source: Andrea Piacquadio)
8. Should You Rent or Own Your Water Heater?
Well, after reading this article, what option is best for you? Let’s summarize the benefits of both options below.
Renting may be better if:
- You don’t want a large upfront expense.
- You want the convenience of having maintenance and repairs covered.
- You’re not planning on staying in your home long-term.
Buying may be better if:
- You’re staying in your home long-term and want to save money in the long run.
- You prefer to own your appliances and control maintenance and repairs.
- You want the flexibility to choose the best model for your needs.
Both options have their benefits, and the right choice depends on your financial situation, how long you plan to stay in your home, and your willingness to take on maintenance responsibility.

If you want to own or rent your water heater, Ideal Heating & Air Conditioning can help you. They offer both traditional storage water heaters as well as energy-efficient tankless options.
Ideal also offers Maintenance Service and Repairs and Installations for Heating, Air Conditioning and Ventilation Equipment in Toronto and surrounding areas.
Contact an expert today and keep your home in ideal shape!
