Two Saturdays ago, I got up to find that hot water was shooting out the top of my hot water heater. This forced my hand on the decision of whether to replace my 20-year old hot water heater with another rental from Direct Energy or buy one.
In the face of water gushing onto my basement floor, I took the following steps:
1. Panic. This is best limited to a few seconds during which you don’t move.
2. Shut off main water supply to the house. Every adult and teenager in the house should know where this is, and it should be kept clear.
3. Clean up the water. A plastic dustpan worked great for scooping up the water off the cement floor that pooled away from the drain.
4. Call a friend who knows how to do just about any kind of work around a house and is often available on short notice. This step could be tricky if you don’t have the right friends. I do my best to be helpful to my friends, and they tend to reciprocate when I’m in need.
5. Buy and install a new water heater.
I had been planning to buy a new water heater for some time because the old one produced a lot of rusty hot water, and the $15.21 (including tax) I pay in rental fees each month irritates me. My punishment for procrastinating was the somewhat flooded basement.
I went for the longest warranty (12 years) at Home Depot, and the new water heater cost $711 (including sales taxes). At $15.21 per month, the new heater will pay for itself in 47 months, or about 4 years. This analysis leaves out a few factors:
1. Water heater rental costs go up over time. In fact, my rental cost had just increased by about 11%.
2. The water heater purchase had to be paid up front, but monthly rental costs are in the future.
3. Any repairs would be covered on a rental. The exact coverage on my 12-year warranty is uncertain. You never really know what costs are covered (such as parts and labour) until you try to make a warranty claim.
Factors 1 and 2 roughly offset each other, but the potential need for repairs changes the equation. Let’s say that if my new heater is problem-free for at least 4 years, then I will come out ahead. If not, then it will take longer to get to the break-even point. However, I’m confident that I’ll come out ahead in the long run.