Your business needs to regularly acquire new equipment to deliver the best service, but some argue that there’s no need to buy. Renting building equipment is becoming a particularly popular option among construction companies because it can save you money and improve the flexibility of your business.
Below we explore the pros and cons of renting building equipment, guiding you through the best options for your business.
There are five main pros of renting your building equipment. They are as follows:
1. You only pay for what you use – Some builds require particular pieces of equipment to be used for the entirety of the job. However, in many others you may use a digger for a few days, for example, and then not use it again. This means that you’re paying for its upkeep and insurance (and sometimes storage) even when you’re not using it. For short-term jobs, rental equipment is the best option. And you can add the rental price to the job pricing.
2. Increased flexibility – No one can foresee the future of a job. Sometimes bad weather may halt work or a job may be cancelled altogether. And there’s no point paying for a piece of unused equipment, especially in slow periods. Rental contracts will save you this trouble because they are flexible and there are no penalties for an early return. You simply give it back and your payments stop.
3. You can “test drive” before purchasing – It can be difficult to know exactly how a piece of building equipment will work for your business. Buying a piece outright can be incredibly costly, especially if you later find out that it’s not quite what you need. Rental companies usually have a wide range of new equipment available, so you can trial a few different options on-site. This means that if you do decide to buy, you’ll be getting the very best piece for you.
4. Free maintenance and insurance – Maintenance of building equipment can be a big expense. Pieces require constant attention, which if not done correctly, can lead to serious injury or fatalities. And this can leave you liable for damages. Further, insurance can be another costly exercise. Since maintenance and insurance of rental equipment is handled by a third party, you can save money and spend less time on maintenance and more time focusing on the job at hand.
5. Reduction in paperwork – We’re builders, not accountants. We don’t want to be spending our precious time chasing up rogue invoices and costings. Renting reduces this administrative duty because it makes budgeting far simpler. There’s one invoice with one cost. Further, the rental can be deducted as a business expense, so it’s also pleasing your accountant.
There are two main cons to renting building equipment, which are outlined below.
1. Long-term rentals can be more expensive – Although renting can reduce your costs because you’re only paying for what you use, this can also be a drawback. If you’re using a piece of equipment for a long time, it may actually be cheaper to buy it. Think about how much each piece will be used and adjust your cost estimates accordingly. Do the maths now, it’ll save you later.
2. The equipment you need might not be available – The added flexibility of hiring a rental when you need it could potentially be annulled if the piece you need isn’t available. This is particularly the case in peak periods and when you have short notice before starting a job. And although the number of rental building equipment companies is increasing, it’s possible that you could miss out when you need it most.
Renting your building equipment can give you added flexibility and reduce your costs because you only pay for what you use and you don’t need to worry about maintenance or insurance. However, buying may be a better option if you are renting your equipment over the longer term and in circumstances where renting isn’t possible. Think about these points and make the decision about what suits your business best.
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