Rent to Own is a global enterprise. There are RTO companies serving every continent. To celebrate our 100th consecutive weekly issue of RTO Magazine, come with us to Australia, and experience RTO Down Under. Thanks to all of you for making RTO Online the most read RTO publication in the world.

Sincerely
Roy Griffaw
President
RTO Online

	God bless America. God save the Queen. God defend New Zealand and thank Christ for Australia" Russell Crowe
Flag Facts

 

Rent-to-Own is about as common in Australia as wombats are in New York. Jason Wyllie, General Manager of Pabs is hard at work introducing Rent-to-Own in 'Oz'.

Jason told RTO Online, "Pabs was the first furniture rental company in Australia and one of the first furniture rental companies in the world. The first Pabs began renting 'beds and fridges' in Melbourne in 1962. In 1972 we opened our second showroom in Sydney followed by Adelaide, Brisbane and the Gold Coast".

Pabs is the largest furniture rental company on the continent. The company offers short and long term rentals on quality residential and office furniture. Pabs recently launched a Rent-to-Own program at it's 5 East coast locations.

Pabs Sydney Showroom

"Currently, 80% of rental outlets in Australia are rent-to-rent", said Jason. "This is a new market for Pabs as it’s the homeowners we're targeting and not the moving population or the short-term renter". He added, "All rent-to-rent companies offer a purchase option available throughout the rental period but only Pabs offers a Rent-to-Own option available over a 3, 6 & 12 month term".

According to Jason, the 12 month term is most popular with consumers due to the lower monthly rental payment. The average US agreement is 18 months.

Based on a 12 month agreement...

• 120cm (47") TV :$72.00 ($47.85 US) per week
• Lounge suite package: $28.80 ($19.18 US) per week (That would be 'Living Room' for you yanks)
• Early purchase option is available and is calculated as 'Cash Price minus 30% of rent paid

It's a little early in the companies RTO program to calculate accurate keep rates, but Jason said early indicators are 80%. This is 3 - 4 times the US rate. Short rental terms (12 month), and a focus on ownership rather than 'return it anytime' likely contribute to this high number. The company has no plans to move to 18 or 24 month RTO agreements. "When the rental term goes beyond 12 months we feel that the keep rates will reduce", said Jason.

This period in Australian RTO evolution is similar to the 80's in the US. At that time, electronics and appliances were the main focus. Furniture was a sideline. Today, furniture accounts for over 30% of all US rental agreements. There are several appliance and electronics rent to own companies operating in Australia, but Jason estimates there are fewer than 30 Rent-to-Own locations in the entire country offering furniture. With a population of 20 million, the potential for growth is enormous. The average Pabs location is  25,000 square feet, 5 times larger than their American cousins and, more importantly, 5 times larger than the local competition, allowing a much broader display of merchandise.

Australian rental companies are ahead of their US counterparts in embracing the internet as a revenue generator. Jason told RTO Online, "We have incorporated a full service centre online that allows our customers to place orders, pay bills, and request pickups all in a secure environment". He added, "Pabs was the First Furniture Rental company in Australia, and possibly the world, to offer this level of online service". The proof is in the pudding. According to Jason, www.pabs.com.au generates a whopping 10% of the companies total revenue.

While Rent-to-Own is in its infancy, rent-to-rent is booming Down Under. "Out of the total businesses located in Australia", said Jason, "there are 10 major players including Pabs Furniture Rentals. We provide the largest range of quality furniture and appliances for short or long term rental in Australia".

According to the Australian Bureau of Statistics, the Australian personal and household goods rental industry has approximately 409 businesses operating from 2124 outlets. 72% are located in capital cities with the remainder in rural areas. The industry employs 3,500 people with annual revenues of $233 million.

Like here at home, Australians insist on great service. "Competition is fierce in Australia and you really need to be on the ball if you want to succeed in [the rental] business", said Jason. He adds, "Consumers expect superior service and competitive pricing and Pabs provides this to our clients at all times".

Pabs has been supplying furniture and appliance rental to corporate and residential clients since 1962. "In this time we have provided our services to the world’s largest corporations where excellence in service is expected at all times", said Jason.

The majority of Pabs rent-to-rent customers are professionals who have a need for furniture rental on a 6-12 month basis. "This type of consumer expects to have the latest in Furniture styles and brand name Appliances and will generally pay approximately $60.00 ($39.90 US) per month for a 68cm (27") TV based on a 6 month rental term", said Jason. There is also a high demand for short term furniture rental and consumers are charged a higher rate for short term agreements.

Pabs is a member of the Hire and Rental Industry Association (HRIA), Australia's largest trade group, serving all rent-to-rent and Rent-to-Own companies. Pabs is also a government-endorsed supplier.

Pabs uses a barcode system to manage and control inventory efficiently and precisely. Says Jason, "We take furniture rental seriously and rely on technology to streamline business practices".

While there are differences in methods, the similarities between US and Australian Rent-to-Own are evident. The demand for quality merchandise, delivered today, with world class service to follow, unites us all.

Forward email to Jason Wyllie Here