Ah, the lure of that new, shiny backhoe loader! It could be worth renting rather than purchasing, prior to spending your hard-earned money to be its proud owner. While money is always an important factor, so are the risks and the opportunities. All three factors are affected by the rent-or-buy choice. In recent years, the market for renting equipment in construction has grown. The list of advantages below explains why.
Stop paying for your equipment If You're Not Using It
If your construction project needs specific equipment for a short duration , the equipment is liable to stand still if you purchase it. Let the rental company take care about finding other users.
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Stay current with the latest developments in the latest developments in technology
The rental market is competitive , which makes rental companies want to provide recent-generation machines that get jobs done faster and more efficiently. Compliance with emission regulations is typically an essential requirement for equipment that is current.
Avoid Maintenance Costs
Many rental agreements include clauses for repairs, maintenance as well as spare parts. Make sure to read the contract prior to signing to see what is included. You can save money by not having to hire your own experts to educate or employ.
Stop the Storage Costs
Construction equipment is only able to spend the time to idle outside. It is costly to invest in storage facilities that will hold larger pieces of equipment when they're not in use. However, this is a problem you can simply hand off to the rental service.
Truncate Transport Costs
If the equipment you are using is on the East Coast, but your project is located on West Coast, your costs for transporting your equipment could make a sizable dent in your profitability. Renting the equipment you require to build your project could be better than paying for transportation costs.
Pursue New Opportunities
If you want to do certain projects correctly and efficiently you'll require specific equipment. Buying the equipment may not be economically viable. On the other hand, rentals can let you broaden your vision while staying profitable.
Reduce Costs of Opportunity
If you purchase instead of renting, you take on capital that is then no longer available for other projects. This could make it difficult to pursue opportunities you may have hoped to pursue. It's possible to remain flexible by renting instead of buying.
Direct tax deductions are a good idea.
Rental costs are often immediately deductable as business expenses. Equipment purchases for construction, on the other side typically, need to be amortized over the duration of the purchase.
Enhance Your Balance Sheet
This one will be a hit with bean counters! The fact that rental expenses do not count as a balance sheet liability will be appreciated by the finance department. Among other things, you preserve more than your company's borrowing capability.
From Lease to Rent to Purchase
You can also rent construction equipment to test it out before purchasing. If the equipment is not suitable, you can reduce the risk of investment. If you choose to purchase rental charges can be taken out of the purchase price under certain conditions such as a lease or purchase option.
If it makes sense to Buy Instead of Rent
You might be wondering if purchasing the machine is the best decision. If you're certain that you'll be using the equipment every working day of the year, then buying could be the better option. As a general rule, the cross-over zone between buying and renting is the usage of the equipment 60 to 70 percent of the time.
You can start your spreadsheet program on your PC or better yet, you can use specialized construction management software that can calculate and figure out whether buying or leasing industrial machinery is best for your needs. Different rent-or buy decisions are made by different companies.
