Construction is a lucrative business field that can have incredible returns on investment if handled correctly. This particular field of business involves a lot of investment, skill, and an incredible amount of wise management. Management of resources and skills to accomplish projects are two of the most important aspects of running a successful construction business, whether it’s residential or commercial.
While this kind of business can have some incredible challenges, it should be noted that these challenges should not be intimidating or daunting. With the right people, skill sets, and knowledge, successfully operating a construction company can be a great experience. With that being said, one valuable tool in the construction world is renting equipment. Renting construction equipment allows entrepreneurs and business owners to complete tasks and accomplish projects that they may otherwise not be able to viably complete.
However, just like a good rental company will utilize equipment rental software to track inventory and maintain efficiency for optimal financial reward, a construction company should have systems in place to ensure they aren’t wasting money on rentals. One of the most critical questions for business owners to tackle is when renting equipment is a more financially viable option than buying the same equipment outright.
So, if you have been wondering about the benefits of renting construction equipment and how to know when this is the right move, here are some things to consider.
What Are the Benefits of Renting Construction Equipment?
Construction is a rather large field of business and requires a lot of capital to get moving. Constructing buildings whether residential or commercial takes a lot of work, materials, and no small amount of equipment. To best understand when the right time to rent is, it’s good to consider the benefits of renting construction equipment in the first place. By knowing its benefits, you can better optimize your cost-benefit analysis of whether this is the right move for you and your company.
The Upfront Cost is Affordable
One of the most important benefits that renting construction equipment can bring to the table, is a reduced upfront cost, especially for startups or businesses that are still growing their capital and equity. If you don’t have it in the budget to purchase a specific piece of construction equipment, then the benefit of renting that makes it a fairly clear decision is that it’s affordable.
You Can Not Affordable Store the Equipment
The second most compelling benefit of renting construction equipment is going to be the maintenance and storage of said equipment. It is an accomplishment to be able to afford a piece of construction equipment, however, these machines are not small and do require a certain level of maintenance and upkeep. Purchasing a six-figure piece of equipment is a heavy investment for any sized business and like any investment, it will need to be managed. This includes maintenance and storage which can also be pricey. Some of the pieces of equipment that construction companies need are not feasible to store because of their size, and this is a strong reason why renting may be a great option.
You Don’t Utilize the Equipment Enough to Justify the Purchase
Another strong benefit to renting construction equipment is that it allows you to use equipment you may not use often. In general, a rule of thumb is that a construction company should avoid purchasing a piece of equipment if they don’t use it more than at least 60% of the time. This is where the option to rent provides a powerful and lucrative advantage to businesses. Instead of purchasing an expensive piece of equipment that your company’s budget may not be able to sustain, renting is a viable solution.
There may be a case for purchasing equipment that a company will use 70% of the time. However, if there is equipment that is used much less – renting is a wise financial move. This is especially true of costly heavy-duty construction equipment like cranes, trucks, and more.
Renting construction equipment is financially strategic and can provide a high ROI. You can easily discover whether renting or buying is best by evaluating your budget, goals, and needs while keeping storage and maintenance costs for owning equipment in mind. The good news is that both options can help you complete projects; however, knowing when to use rent or when to purchase can have big implications for the longevity of your business.