Renting construction equipment is a great way for successful construction companies to continue completing projects without the additional upfront and maintenance costs of owning machinery. Construction companies need to stay liquid between jobs and renting helps companies to do just that. Below are a few of the financial benefits your construction company will enjoy when renting construction equipment.
No high upfront costs
New construction equipment does not come cheap. Making such a large purchase can hurt your business’ cash flow, and once you’ve made that big purchase, you’re stuck using that equipment until it’s run its course. Renting allows you to keep more of your cash up front, and you’re free to rent the latest model once it’s available.
Avoid maintenance and repair costs
When deciding whether to rent or buy, you’ll need to factor in the costs of maintenance and repair. When you own your equipment, it’s solely your responsibility for taking care of the equipment. Maintenance and repair labor for construction equipment is specialized and could cost you a pretty penny.
While you may still have maintenance costs to consider for rentals, they are much lower because you aren’t planning on taking care of the equipment out of your own budget for the long-term. You only need to maintain it through your rental period.
You won’t lose money on depreciation
Your initial investment in brand-new equipment will quickly depreciate. Reselling equipment requires keeping it in excellent condition, making it more expensive to maintain. As the equipment’s value continues to depreciate – and becomes more outdated – you’ll have a harder time regaining any of your investment upon resale. A rental can help you avoid the lost costs associated with depreciation, though the amount saved depends on the terms of your rental.
Skip the storage fees
If you own your equipment, you’ll also need to have a space to park it when not in use. Equipment without proper storage risks damage, costing you more in maintenance and depreciation. With a rental you’ll still need to take care to store the equipment properly but won’t have to worry about long-term storage costs.
Only rent what you need
If you have a project that requires a special piece of equipment, you don’t want to spend a lot just for one project. If you have many projects happening at once, you also don’t want to transport equipment back and forth between sites. Renting allows you to have the equipment ready for your team at the job site(s) with fewer logistical delays.
Offload equipment when needed
If your projects are slowing down or if your costs are getting too high, renting offers the relief that you will no longer be paying for the equipment once your lease is finished. The short-term nature of rentals makes it easier for your construction company to weather market fluctuations.
If you’re looking for financial advice for your construction business, our financial specialists are ready to help. Contact Patin and Associates today to get started.