Big Benefits of Rent-Over-Buy: Heavy Equipment in the Construction Industry
You love the look of that shiny new heavy equipment, don’t you? Research indicates that you should try to resist the urge to buy. Upfront cost, risk, opportunity - all three have an impact on the rent-over-buy decision. FYI, the construction equipment rental market is booming.
Benefits of Renting:
Reduce upfront costs - The cost to rent your equipment for the duration of your construction project, in most cases, is much lower than the cost to purchase your own equipment. Rather than let your brand new backhoe sit idly, simply rent and return.
New technology - We’re living in the digital age. With that said, technology is always changing...and becoming obsolete. Renting your equipment allows you to choose the newest tech, and keeps you from owning your own obsolete equipment. New tech often means faster and more efficient gear. Companies like USA Renovations keep concrete polishing equipment, as well as scissor lift equipment for ceiling restoration, up to date by renting the newest models.
Maintenance costs - Many equipment rental contracts include maintenance costs, repairs, and spare parts. Save money in the long run by avoiding hefty maintenance costs, or hiring an in-house specialist.
Storage costs - Sure, you can keep your heavy equipment outside, but long term weathering can take its toll. Storage facilities typically charge a considerable price to hold onto your idle machines (earth moving equipment can be pretty sizable). Renting your equipment will hand this cost over to the rental company.
Transportation costs - Let’s say you just landed a new project on the East Coast, but your equipment fleet is stored on the West Coast… The transport costs could really start cutting into your margins. Big rental companies like ProsRent have convenient locations nationwide. This reduces transport costs substantially.
Specialty equipment - Buying a specialty piece of equipment that you don’t typically use in the majority of your projects may not be economically viable. Renting that specialty equipment makes it possible to pursue new project opportunities.
More capital = More project potential - Buying all of your equipment can really put a dent in your capital.Tying up funds could make you miss out on new project opportunities that you would otherwise be able to pursue. Keeping capital on hand, and expensive equipment off hand, makes it easier for you to jump on new opportunities.
Tax deductions and balance sheet - Equipment rental costs for your business are usually immediately deductible. Rentals are also not considered to be a liability on your balance sheet, which gives you more borrowing power.
The above are the most apparent benefits of renting over buying your equipment. With all of the advantages of renting, you may wonder if buying is ever the right choice. If you’re looking to rent everything you need for your project, all in one place, take a look at ProsRent. Equipment Rental Made Simple.