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Money Monday - the hot water tank

We have been in the house less than three weeks and we are ecstatic. Bean's new favourite word is "Newhouse."

On the weekend I noticed the tray under the hot water tank is full of water, and slowly starting to leak onto the concrete basement floor. I put newspapers around it, and they dried, and Baxter (the kitten) decided to take them skating around. The basement seems to be his domain, because his litter box is down there.

I called the utilities company, and they are sending a plumber this afternoon to replace the tank. Before the old one is removed, I will have to sign a five-year contract for the new tank.

I balked at the commitment. The rental is $12.35 (10.93 + HST) per month on my hydro bill. In five years the cost of the rental will be over $3200, if the price does not increase. I could probably have three tanks purchased and installed for that price, but then I would be on the hook for all the repairs.

I spoke to the plumber, and he assured me that renting is the way to go, because the city puts treatments into the water that could compromise the tank, and that he sees heating elements go all the time which are costly to replace. These are only two things that the utilities company would pay for if they happen to our tank.

He also told me that he is supposed to install a $150 thermostat to moderate the water temperature between the 140 degrees (Celcius) that it needs to be to avoid Legionnaire's, and the 120 degrees maximum that it is allowed to come out of the tap. I am going to forgo that expense, knowing that if I change my mind, I will have to pay at least $200 later on to have it installed.

I decided to go with the rental for five years, and in that time, I am also going to match the rental payment into my emergency fund. That way, at the end of the contract, I will have the funds to purchase a new tank if I decide that is what I want, and I will also have five years experience as a homeowner to know if I am making the right decision.

Because right now I have no idea what I am doing, and I have only about five hours to make a decision about this hot water tank.