The greatest dilemma that most construction experts face when launching is the question of whether they should buy or rent construction equipment. Specialized companies may have the need to own a particular piece of heavy machinery they use on every occasion, while some businesses may find this to be too situational to predict. The benefits of renting are a tad harder to predict, so, here are some that you might need to know about prior to making up your mind.
1. You’re paying only when you’re using it
When you decide to take a loan in order to purchase an expensive piece of construction equipment, you’re making an estimate of the time it will take for you to pay it off. For instance, if it would take about 4 years for you to pay the machine off, you are constantly paying for it over this period of time. On the other hand, when renting such a machine, you’re only paying when you’re using it. Sure, the price per use may be more expensive than what it would cost if you had your own machine, although, this may be considered an issue of the standpoint. For this, you need an equipment loan calculator that most online lenders have as a free feature.
2. It’s easier to get up to date
Another perk of renting lies in the fact that it’s much easier to get up to date. With a piece of equipment, you own, you would have to look for a trade-in, sell and then buy another piece or do something equally complicated. It seems just much easier to get up to date in this way, seeing as how you can just not prolong the lease once it ends and get a different piece of equipment next time around. This is especially important when one takes into consideration all the latest emission laws and regulations, which might make a purchase into a massive waste of money.
3. Lower transport cost
Another thing you need to take into consideration is the locality on which your company operates. Taking a crane across the state is definitely not worth it when you can find a local company that can rent it out. In this way, the cost of transportation is fairly low and it’s not for you to pay. On the other hand, if you realize that you’re mostly operation on the same locality, it might be more cost-effective to simply purchase the machinery on your own. For instance, most of these companies that offer to rent the cranes also have tower cranes for sale; whichever you decide is best.
4. Sometimes it’s definitely worth buying
If the piece of equipment you’re considering is something you use about 60 or 70 percent of the time, the payoff rate might drastically shift in favor of buying. Earlier on, we talked about innovation, well, constantly changing gear also means that you have to re-train your staff or pay an expert that works for a company you’re renting from. In both cases, you’re at a slight financial loss. The best way to avoid this from becoming an issue is to go for the above-discussed loan and simply buy the piece of equipment.
As you can see, this is a tough choice, yet, it’s nothing compared to some other choices you’ll have to make as an entrepreneur. After all, making hard choices is the name of the game, as well as making accurate estimates on what you’re supposed to do in tricky situations. Cutting costs is always a smart trend, yet, it should never come at the expense of efficiency.