Heavy Equipment Rental Businesses - Enumerate Factors to Consider Before Renting

An unpredictable market and the rising cost of purchasing and maintaining equipment has forced construction companies to find ways to save money wherever they can. Renting of construction equipment has increased as a result and in many instances, it has become the most practical option for a lot of companies, allowing them to control cost and run their businesses in a more financially stable manner. 

Renting helps project managers avoid up-front investment

Most construction machinery is designed for heavy duty work and are not just large and over-dimensional but are also quite expensive. Buying equipment like a bulldozer or a front loader requires serious cash and it may not always be possible to make the investment when it is most needed by the project. This is why there is a clear advantage of hiring the equipment on rent because it does not require the money to be paid upfront to be able to use the equipment.

Cuts the costs of repairs and maintenance

Project managers can be free from the hassle of expensive breakdowns as they will not be required to pay for regular maintenance checks when they hire the equipment on rent. In addition to substantial savings in money, renting construction equipment frees up the project manager’s mind from worries about maintaining the equipment which is also quite expensive. He can rest assured that the equipment at his disposal is of good quality and technology and he only pays for the duration he uses the equipment.

Market fluctuation doesn’t affect the project

When equipment is hired on rent it offers the construction company a level of safety from any unpredictable downturns in the economy as demand normally drops during such times, affecting business adversely. On the other hand, the construction sector may get influenced by many other factors like rising or falling costs of equipment or the number of jobs being generated, among others. All these factors cannot be controlled but businesses can be better prepared to survive their adverse impacts. Instead of investing big sums of money in owning equipment, construction companies can choose to hire them on rent as it offers them a flexible option that makes it easier to adjust to the rise and fall of market forces.

Avoiding depreciation costs

One big liability of owning machinery is depreciation costs that constantly eats away the resale value of the equipment. It becomes increasingly difficult to recover the cost of investment in such expensive equipment as value continues to depreciate. Maintaining equipment and then reselling them at a profit requires large investments in addition to the upfront cost of purchasing the equipment. Of course, companies have their own priorities, but renting construction equipment to avoid loses due to depreciation is gaining popularity. Project managers need to check out construction software that can help maximize utilization of their resources to better manage depreciation and other issues that may arise with ownership of equipment.

Project-specific hiring of equipment

In most cases, construction companies handle a number of projects simultaneously where the need for equipment may not be similar. Project managers should try to avoid transferring equipment and sharing them among multiple jobs as this is likely to lead to higher logistical costs across projects that often spiral out of control. They should therefore consider renting specific pieces of equipment for particular projects as this will eliminate the likely logistical delays that a project may face and provide each job-site with the right amount of resources to complete the project efficiently.

Bypassing equipment storage issues

Warehouse or storage space is always a substantial cost for construction companies that own equipment and are required to have storage solutions in place for the equipment when these are not in use. Construction equipment is expensive and should not be stored or exposed to elements like weather conditions that may cause faster depreciation or leave them exposed to cases of theft. Additionally, warehouse costs can be quite high, especially when it is about storing a fleet of equipment. Going for equipment rentals saves the time needed to plan out logistics as well as the cost of storage.  

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To Buy or Rent? The Benefits of Hiring Construction Equipment

In any construction site today, managers can be seen trying to figure out the best ways to optimize their spending without compromising on the quality of their work. It is the site manager or project manager who decides whether to get the construction equipment on rent or purchase it outright. Certain construction businesses operate with large in-house inventory of heavy duty equipment while some others operate with very little or no in-house inventory at all. This second group of businesses is the one that leverages the option of renting construction equipment. 

If a project is short on working capital to meet the cost of badly-needed equipment hiring is a great option to work around. It can help a manager equip his organization with inventory that he never intends to include in his long-term business strategy. He goes for hiring equipment only when there is a need to upgrade specific pieces of equipment in the inventory or when there is a project coming up shortly. Therefore it is mostly for short term use that hiring proves to be the ideal way to get the necessary equipment, without having to stretch the company’s finances.

Across different stages of a project, a manager needs to review the different types of construction machinery that he would be using. Equipment such as, bulldozers, backhoe loaders, skid-steers, tractors, trenchers, compressors, booms and welders among others are used at construction sites. To meet the other requirements at the constructing site at different stages, there are also other equipment that are used in addition to these machines. The use of equipment can vary from one project to another and therefore it is vital that managers have some flexibility in the type of machinery in their inventory.

Managements in the construction industry generally understand that unless they plan to use equipment they purchase, at least 60 percent of the time, there won’t be any worthwhile ROI (Return on Investment). Compared to that, hiring turns out to be much cheaper as this could be useful in balancing equipment cost estimates in relation to overall cost of the project and whether it is worthwhile to purchase construction equipment. The decision will also depend on the financing options available and the cost at which the credit can be accessed.

Heavy duty equipment like those used in the construction industry are capital intensive and carry a substantial tax liability. Besides, the monetary value of the equipment depreciates along with their functionality experiences as more upgraded variants enter the market. This makes it near impossible for the cost to square off within a year of purchase and managers could end up with such expensive pieces of equipment that they get to use only partially even as the resale value erodes quite fast. Another issue with purchasing such equipment is that, the resale value will reduce even more sharply if safety and quality control guidelines are amended during the life of the equipment.

The other challenge that construction project managers will face with purchased equipment is fleet management. Such heavy duty equipment are not compact and have varying dimensions that are quite uneven. Therefore, multiple pieces of such equipment will require enormous storage space which is another huge expense in the long run. When the equipment is hired, it is the rental company that is responsible for storage and upkeep of the equipment which they already have anyway. Hence construction project managers can avoid the storage and other related hassles by choosing to hire heavy equipment on rent.

Construction equipment is capital intensive and can drain out all the cash resources of a project if not handled optimally. Although an integral part of the construction industry, management of such equipment is a specialized activity that is best left to professionals of the niche whose main job is to manage such equipment. For construction project managers to use up large amounts of their business cash and credit lines in acquiring such equipment is not a smart idea. One effective way to preserve and build on a project’s capital balance is to hire equipment instead of purchasing them. An equipment leasing program with an affordable equated monthly installment plan will ensure easier cash flow and zero handling worries.

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How Construction Equipment Leasing Benefits Current Building Trends

Site managers often wonder about the best ways to save money without compromising on the quality of work that their construction machinery does for them. So if you are one, the options available to you, is to procure certain construction equipment on lease especially when you need the equipment for short-term projects or even medium and sometimes long-term projects depending on a number of factors. These could be how you balance your equipment cost estimates in relation to the overall cost of the project and whether it is worthwhile to purchase your construction equipment. Your decision will also depend on the financing options available and the cost at which you are able to access the credit.

Leasing is one of the best options for just about any kind of construction equipment as it can help you equip your organization with machinery that you never intend to make a part of your long-term business strategy. So, it is mostly for short term use that you go for leasing construction equipment – maybe you need to upgrade specific pieces of equipment in your inventory or perhaps you have a project coming up shortly. Leasing is the ideal way to get the equipment you require, without having to stretch your finances. Leasing is a great option to work around if you are short on working capital to meet the cost of badly- needed equipment.

Generally, at a construction site there are different types of equipment such as, bulldozers, backhoe loaders, skid-steers, tractors, trenchers, compressors, booms and welders among others. In addition to these machines, there are also many other equipment that are used for other aspects constructing buildings and structures at different stages. It is important that you have some flexibility in the type of machinery at your disposal since the use of equipment can vary a lot from one project to another. This is where you have to seriously look at hiring the construction machinery that you would be using in the different projects, on lease.

When considering equipment for your project on lease check the rates that are offered by different equipment leasing companies. To optimize the cost of hiring the equipment, you must ensure that you avoid paying compensation for any damage caused to the equipment. A certain degree of wear and tear is considered normal over time but the equipment leasing company would have better knowledge of how much wear and tear can happen after normal operations. Construction machinery is designed to carry out really heavy work and most leasing companies closely monitor the wear and tear of their machines. Therefore, while hiring the equipment you need to comply with the best practices of usage in order to derive optimum benefit from the leased equipment.

The construction leasing industry began growing really fast two-three decades ago and today it is the preferred option across different construction sites around the world. A wide range of equipment is being hired on lease by both the public and private stakeholders. Projects such as office buildings, hotels and golf courses that are usually handled by private enterprises and projects like schools, hospitals, highways, railway tracks and bridges that are usually managed by public sector enterprises require large numbers of construction equipment and quite often they choose to hire such equipment on lease. Moreover, contractors keep looking around for the most advanced construction equipment in order to compete with competitors for different construction jobs.

In the 1990's the construction leasing industry grew well. It is very popular today on different construction sites around the world. Machines and equipment can be leased by both the public and private sectors. Examples of private projects are office buildings, hotels and golf courses. Public projects that can require construction equipment leasing can include, schools, highways, rail-roads and prisons. Contractors are now looking for the most technologically advanced construction equipment to compete with other companies for construction jobs. This is another great advantage of leasing, in that you can always have the most up-to-date equipment at your disposal.

It’s not a smart business move to use up all of your business cash and credit line in acquiring construction equipment for your projects. After all, it takes money to make more money and you need to be prepared for any unexpected economic slowdown or a fall in the number of available construction projects. Hiring equipment on lease is one way to preserve and build your capital balance. All you need with an equipment leasing program is an affordable equated monthly installment plan. You don’t need to exhaust all of your cash balance or struggle with the repayment hassles of a business loan from banks to purchase equipment.

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