As wonderful as it might be to admire your new D9 or that three-axle articulated truck, is that really where you want to tie up your capital — especially when you realize you’ll want one of the newer models when they come out?
That’s when you need to consider your answer to one critical question: is renting the right option for your construction firm?
Equipment ownership can be the best choice for some construction firms. Others find that renting heavy machinery for their construction projects is a more financially sound option.
When Ownership Makes the Most Sense
Large construction firms may find it more economical to purchase the equipment outright, especially if they have their own teams of mechanics or a nearby service company that can repair the machinery. These firms must also have skilled operators on their payroll.
Owning this equipment allows firms to control all aspects of a construction project. They may also be eligible for a tax break.
Including depreciation expenses may lower the amount of business taxes you owe. However, remember that heavy equipment may depreciate more quickly than the computer on your desk. Experts recommend using a straight-line formula for your calculations: (Cost Value – Salvage Value) ÷ Useful Life = Annual Depreciation.
Smaller construction firms, however, may want to consider other options for their construction equipment, such as renting.
Is Renting the Right Option for Your Construction Equipment?
Renting heavy machinery was once considered Plan B — the backup plan. Many construction firms preferred to own their equipment outright. However, the industry has progressed, and so too must we.
Construction equipment used to be simpler to operate, but now it’s more complex – which means that renting may offer some advantages over owning in this day and age of technology overload! The many rental benefits include:
- Minimal start-up costs
- No storage costs
- No downtime due to training
- No maintenance or repair costs
- Better project cost controls
- Access to the most modern technology
- Delivery convenience
- No disposal costs
- Tax-deductible rental costs
Many contractors rely heavily on these benefits because they can’t keep up with the changing landscape anymore; plus, plenty of operators will help out when needed (and at little cost).
Heavy equipment rental companies now partner with construction firms, providing the latest in machinery and the talented operators needed for the job.
Regardless of your choice to rent or own, hiring great people with the right experience and expertise is critical to your company’s success.
If you would like to discuss the best ways to renting, book a call here with our team members at Raymond Search Group and we would be happy to share what some of the most successful construction leaders are doing right now to ensure they remain competitive in this ever-changing market.