Why you is likely to be renting not shopping for your subsequent sofa

Shironosov | iStock | Getty Images

Before eventually moving to California, the grandson of a wealthy client of interior designer Phyllis Harbinger, who had just graduated from college, decided to rent furniture instead of her for an apartment he and his girlfriend found in the New York area to buy.

“They said, ‘We don’t know what we want to do. We don’t want to be married to anything and we want to be sustainable,'” said Harbinger, vice chairman of the department of interior design at Fashion Technological Institute. “This generation is really into that reuse and buyback mentality to save the planet for them and their kids.”

Office furniture rental has a long history, but the demand for home furniture rental is growing – particularly among younger consumers who prefer a more mobile lifestyle than was typical for older generations.

Online furniture startups like Feather and Fernish are offering customers the chance to rent furniture for as little as three months at a time, with the option to swap parts during or at the end of a contract period if they fancy something different.

Appealing to a young, mobile customer

Feather and Fernish “are responding to the needs of people who have lots of money but don’t have time to buy furniture, and maybe don’t want to commit to owning large, bulky furniture because they expect to move again – and that’s a younger demographic,” says Susan Inglis, executive director of the Sustainable Furniture Council.

The hire-to-own option offered by these startups also appeals to people who don’t have enough cash to buy now but want good pieces they can live with right away, she said.

Feather’s customers are typically in their 20s and 30s and live and work in cities. The service is well-suited for people who have recently moved or are about to move, live with roommates and move every six months to a year, wrote Ilyse Kaplan, the company’s president and chief operating officer, in an email.

It’s also more affordable for people moving to a new state, which can cost anywhere from $4,300 to $4,800, or even moving down the street in most cities, which costs an average of $1,250, Kaplan said. Feather customers “can set up a basic studio for as little as $105 a month or a basic 1 bedroom for $150 a month.”

Feather cited “significant growth” in new residential leases since the onset of Covid-19 and the onset of remote and hybrid work, greater financial uncertainty and the need for more flexible living arrangements. “As living conditions have changed in response to the pandemic, we’ve seen dining room items decline in exchange for more functional home office items,” Kaplan said.

Rent furniture to be more sustainable

Stationary furniture brands such as IKEA are also examining leasing models. For the Swedish retailer, experimenting with renting is part of a broader plan to move to a circular business model by 2030, with the aim of ultimately using only renewable or recycled raw materials and improving design principles to allow for less wear and tear on the products assembled and dismantled as well as the refurbishment and reuse of used goods or their components.

IKEA began testing a circular furniture subscription model in 2019, but its progress has been somewhat delayed by pandemic-related restrictions, wrote Kicki Murbeck, circular business designer on Ingka Group’s Circular Innovation Team, in an email. Ingka Group is the main franchisee of the IKEA brand, with retail stores in 32 markets, accounting for approximately 90% of IKEA’s total retail sales.

Building on previous tests in several European countries, in 2021 the company introduced a limited launch of a B2B edition called IKEA Rental in six markets: Finland, Sweden, Denmark, Norway, Spain and Poland. After testing multiple contract options, including contract lengths, and banking partners, IKEA is evaluating the results before deciding on next steps, Murbeck said.

Inglis sees interest in renting higher quality furniture as a backlash to the growing popularity in recent decades of “quick furniture,” which relies on cheaper materials to accommodate a more nomadic lifestyle and often ends up in landfill.

“People are fed up with throwing away trash and the furniture industry as a whole did itself a disservice years ago by really trying hard to create furniture that would throw away,” she said.

Currently serving ten major markets in the US, including New York, Washington, DC, San Francisco and Los Angeles, Feather allows customers to change furniture pieces even during a rental period if their space, needs or aesthetic preferences change , and offers one free swap to every retail customer and additional changes for a fee. Around 14% of customers currently use the swap option.

“We are actively working to keep furniture of all types out of landfills” by renovating and repurposing each item multiple times, Kaplan said, noting that furniture currently accounts for about 7% of all landfill waste.

While Feather’s furniture is constructed from durable materials and a system of parts to aid in this process, “our first step is to work with our like-minded partners at FloorFound to find the furniture when parts are no longer useful for the next customers will be deemed new homes. If we are unable to resell an item, we will donate it through our partnership with Habitat for Humanity,” Kaplan said.

Inglis said she expects the trend towards retailers offering refurbishment services to increase dramatically in the coming years.

Before furniture leasing gains popularity, customer perception issues must be resolved. IKEA has heard customers looking for longer-term leases raise concerns about how they care for products and what conditions apply if something breaks or isn’t treated well. This must be clear to both sides.

IKEA finds that the shift in thinking needed to fully understand a subscription model is easier for younger consumers than older ones. Generation X and older consumers tend to associate subscriptions with the rent-to-buy model, which has historically made them pay more than buying upfront, but also the full scope of repair, maintenance, and return services excludes that retailers are now offering.

IKEA franchisees also need to develop a digital product tracking system to move away from a linear sales model and distribute products from one customer to another and expand the subscription service.

IKEA already sells refurbished and reused products in certain markets and plans to expand this as a key part of its circular economy transition. Also, in November 2020, the company opened a second-hand pop-up store in a shopping center in Eskilstuna, Sweden, targeting retailers selling reused, organic or sustainably produced products. More than 30,000 IKEA products were given a second life in the pop-up store during the first year of the trial period, and in December 2021 IKEA extended the program for another year.

“The circular furniture subscription service we tested is not only about the products as such, although of course these are very important, but also about understanding what the customer needs and wants and being able to to meet these changing needs over time,” Murbeck said.

– By David Bogoslaw, specially for CNBC.com

Renting out your pool for money

Along with Clorox wipes and toilet paper, the demand for backyard swimming pools has skyrocketed since the pandemic began.

Across the country, swimming pool and hot tub suppliers have struggled to cope with a sudden surge in demand. But creating a pool is an expensive proposition, and not everyone who wanted to swim could build their own backyard oasis.

That gave Ned Gilardino an idea.

He has a pool his three older children seldom use. In 2019 he listed it on Swimply – like a Airbnb for swimming pools – so families near his home in Aurora, Colorado can rent the space for an hour or two.

Ned Gilardino rents his heated saltwater pool in Aurora, Colorado for $ 60 an hour during the summer months.

Source: Swimply

There weren’t too many bites at first. Then it is Coronavirus crisis closed public swimming pools along with everything else. “All of a sudden around this time last year I got emails,” Gilardino said.

Gilardino’s backyard was fully booked until June when families looked for Covid-friendly activities. He even started a waiting list that grew to 90 names. “It was absolutely wild,” he said.

As a retired teacher, Gilardino was on hand to greet the guests and tidy up between appointments. He even walled in the lower floor so guests could use the bathroom and basement to change clothes without accessing the main part of the house. He also added backyard games like bocce ball and extolled his fire pit.

By the end of the season, Gilardino had made around $ 50,000, he said.

More from Personal Finance:
This is where the Americans plan to go this summer
You may need to repay part of the child tax credit
Making money moves during an economic recovery

“”There was a pent-up demand for what we were offering, “said Asher Weinberger, Co-Founder and Chief Operating Officer of Swimply.” We did it in a way because Covid made us a more relevant story.“”

Weinberger estimates that the business grew by more than 4,000% in the past year. Swimply is now active in every state in the country.

There are currently more than 3,000 pools listed on the website, many of which cost less than $ 100 an hour. (Gilardino charges $ 60 an hour for up to five people on weekends and $ 45 an hour on weekdays. However, discounts are available for multiple bookings.)

Swimply co-founder Asher Weinberger next to his rental pool in Valley Stream, New York.

Leroy Jackson | CNBC

Swimply’s web platform simplifies the booking and payment process and charges hosts and tenants a fee.

Admittedly, according to Weinberger, insurance was an issue that also rents out its own pool on the platform. The company is now using a third party insurer to insure the hosts, and tenants are required to sign a waiver to compensate the pool owner in the event of accidents.

“It may not cover all of the loopholes,” warned Eric Kollevoll, owner of Kollevoll & Associates, an independent insurance agency in Pennington, New Jersey.

Kollevoll advises the hosts to carefully check this policy with their own insurance company and to check whether it covers accidental damage as well as property damage. “Make sure they include medical payments in case someone gets injured,” he added.

It is one thing to have good insurance and it is another thing not to get sued.

Pierson Backes

Partner at Backes and Backes

“There are different scenarios in which losses can occur, and they are more common in pools.”

Buy extra coverage where you can, he suggested. “The homeowner should be aware that there are significant risks.”

“It’s one thing to have good insurance and another thing not to be sued,” said Pierson Backes, partner at Backes and Backes law firm, also based in Pennington.

Beyond insurance, “pools are scary even from a legal standpoint,” he said.

There is cause for concern that this could change the name from a family backyard pool to a semi-public pool, according to Backes. This brings a new level of liability that may dictate certain signage, self-closing gates, or rescue equipment – in addition to complying with Covid-related restrictions, he said.

Also, depending on the municipality, there may be a regulation that restricts renting part of your home or property as a convenience.

“I would like to see more shared resources,” Backes said. “But from a liability perspective, I just can’t imagine steering it.

“You’re safe in a minefield.”

Subscribe to CNBC on YouTube.