The debate over whether to rent or purchase construction equipment is one that small business owners in this field have early in their careers. Although buying might seem like the sensible option at first, purchasing some types of machinery can lead to financial waste down the road. Some equipment may provide construction managers with a better return if they rent instead.
Excavators
Many construction companies find that excavating some land is one of the basic parts of the job. While a business might use an excavator with relative frequency, it still makes sense to consider renting this kind of machine. In order to purchase an excavator, significant finances are necessary as part of the upfront cost. A small construction business may need to wait for one or two good fiscal years before adding an excavator to its fleet. Renting this equipment when you need it eliminates a huge part of the cost and wait times.
Cranes
If you own a larger piece of machinery, maintaining and storing it properly falls on you. Crane services are common in the construction industry, but these machines represent some of the largest ones a team of workers might handle. Not every small construction business has the means to store or repair these pieces. If a construction manager finds that a company only needs to use services involving cranes for rare special jobs, it makes sense to eliminate storage costs by just renting them as needed.
Dozers
A bulldozer is another large piece of equipment that might give a construction manager better returns if it is a rental rather than a purchase. When you buy heavy equipment, the capital you invest in it is tied to it until you sell it. If a construction company uses a bulldozer frequently over the years, any return from a sale is likely to be lower than expected. Renting bulldozers when workers need them for particular jobs can mitigate the risk of losing a good investment.
Trucks
A company often needs to transport supplies or machinery to and from various sites. However, managers of small construction businesses know that keeping their own fleet of vehicles might not be feasible with the spaces they have. Renting trucks can mean a company just starting out has access to the transport it needs without dealing with storage.
Renting equipment instead of buying it will always depend on several factors. However, renting machinery presents a construction manager or owner with more flexibility and an increased chance of mitigating some of the financial risks. If a business owner knows a team will only use some of the machinery listed here less than half the time on given jobs, renting equipment is a sensible option.