Quick answer
Buy out a rental water heater that is under about five years old and working well. Return it and install your own when the tank is past ten years, or when you want tankless or a larger size. In between, compare the written buyout quote plus the repairs you will now own against $1,200–$2,500 for a new owned tank installed.
Whether to buy out your rental water heater or replace it is a question about the tank's age more than about the contract. A buyout ends the monthly fee without anyone lifting a wrench, which is appealing. It is also the only purchase where you pay for equipment that has already used up part of its life, so the first job is finding out how much.
Start with the manufacture date on the rating plate
The rating plate is the label on the side of the tank with the model, serial number, capacity and input. Many plates print the manufacture date outright; on others it is coded into the first characters of the serial number. A tank water heater in this part of Ontario typically lasts 8 to 12 years, and a maintained one can reach 15.
That range is the whole argument, and it is shorter where the water is hard or the tank has never been flushed. Buying out a tank that is 11 years old means paying the rental company for a heater that is likely to leak within a few years, and then paying again to replace it. The same buyout on a three-year-old tank buys most of a working life.
The comparison to run before you decide
- Buy out: the written buyout quote, plus the repairs you now own (most water heater repairs run $150–$800), plus a new tank when this one reaches the end.
- Return and replace: any removal and account-closure charges in your agreement, plus $1,200–$2,500 for a tank-for-tank swap installed, with a new manufacturer's warranty and a full lifespan ahead of it.
- Return and go tankless: the same exit charges, plus $3,500–$6,500 installed, including the gas-line and venting work.
- Stay in the rental: $25–$45 a month for as long as the tank is there, with increases along the way.
A workable rule: if the buyout quote is more than about half the price of a new owned tank and the heater is past eight years old, return it and replace it. How the rental company arrives at its number is explained in how a rental buyout price is calculated, and current installed prices are on the pricing page.
When buying out the rental tank wins
- The tank is under about five years old, dry at the base and has no rust at the fittings.
- It is a power-vent model in good shape. The blower, the vent run and the wall termination are already in and working, and those are the costly parts of that installation to redo.
- The size suits the household and nothing about your hot water use is about to change, such as a basement apartment or a soaker tub going in.
- You are selling soon and want the rental off the listing without scheduling an installation.
When returning it and installing your own wins
- The tank is past ten years, or shows any of the signs a water heater is about to fail.
- You want to move to tankless. There is no point owning a tank you plan to remove.
- The household has outgrown it: a 40-gallon tank that runs cold on the third shower will keep doing that after you own it.
- The buyout quote lands close to the price of a new installed tank.
- The tank vents into a chimney that needs a liner or other work, and a different venting type would suit the house better.
What you take on once the tank is yours
A bought-out tank comes as it stands. Reliance's terms, for example, sell it on an as is, where is basis with no warranty from Reliance, and the service that came with the rental stops on the day you pay. From then on the thermocouple, the gas valve and the eventual replacement are yours, along with the yearly flush that keeps the tank going. Budget for an anode rod inspection in the first year of ownership, because nobody will have looked at it while the tank was rented.
If you send us the buyout quote and a photo of the rating plate, we will tell you which side of the line your tank falls on and price an owned replacement beside it. ZK Mechanical's rental buyout and replacement service covers the licensed disconnect, the return and the new tank. Reach us at (647) 801-1252 or through the contact form.