Web Leasing: Good or bad?

About 3 months ago, my husband and I took a first-time home buyer's class offered by a non-profit in our community. There, I learned that my city had the most number of "rent-to-own" type stores per capita in the state!! On top of that, most people who started these purchases, never completed. After one year, the amount paid was over the resale price. Instead of finishing, they stopped payment for one reason or another and the store started all over again. And the customers still did not have a couch.

In working with a website design company, I recently came across a competitor who offers website leasing. It sounded good, and I read all the reason why one should: monthly budgeting, smaller payments, some even offer monthly updates. I then added up what we would charge for a similar website (actually one bigger than this particular company), and I realized that we weren't charging enough! Since we charge any updates (after the site has been finalized) by the hour, we would have to do about 6 hours of work a month to charge the same! Then, I realized that even at the end of the year contract they haven't even bought it. Suddenly, leasing a website didn't sound so good after all.

I found the cost of leasing a basic, no frills website, containing about 5-10 pages of content for one-year to be about $200. The lowest monthly payment I found was $100, but it was a 3-year contract, coming out to a total of $3600. Now, if I tried to sell a basic website for that price, I would get kicked out of the store! The most outrageous cost I found was $600 per month, again for a minimum of 36 months. Granted, it was for a huge website plus shopping cart and extra email addresses, but it was not worth the over $21,000 that you would eventually pay for it. You could hire your own programmer and have them figure out how to program a shopping cart from scratch for way less than that.

There are many incentives for the web designers to offer leasing. One is the steady flow of income. They know that for the next x amount of months, they will be receiving your payment. For the salesman who is paid on commission, this is GREAT. Another advantage is the guaranteed business. When you are leasing a website, even if you find a cheaper company to host it, you are stuck with the original company until your contract expires, and then you haven't even bought the website!! (Note: Even though a company may advertise free hosting, most likely the costs of hosting were figured into the lease payment. Many design companies include hosting the first year for purchasing the website anyway.) One advertising tactic I saw was that you should "lease what depreciates." That is true, but your website will never depreciate. The longer it is active, the more relevant it will be to the search engines, and your rankings will be higher, so if anything, its value increases!

My advice: shop around for website designers. Even if you think that a designer may be out of your budget, call and meet with them face to face. Designers want your business, and most of the time they will adjust the amount you have to pay up front if they know that you are an established business and will pay on time. Many small companies have more time to spend with you and will wait and get the site exactly as you want it, even if you change your mind at the last minute.