Construction projects vary significantly in their scope and needs, and contractors sometimes require specialized tools to finish the job. In many cases, they can rent the needed tools and avoid the cost of ownership if they don't use the tools often enough to justify buying them.
Renting and owning both have their advantages. Here's a look at them:
1. Cheaper per use. Large tools are often cost-prohibitive to buy if you're going to use them only a few times a year. Rental centers often offer four-hour, daily and weekly rates.
2. No maintenance needs. The more mechanical moving parts a tool has, the more maintenance it needs. That eats up labor time and money and adds the cost of replacement parts.
3. New features. Rental centers typically stock the latest versions of tools, ensuring that they have state-of-the-art features and technologies.
4. No storage needs. Large pieces of equipment, especially those used only occasionally, require storage space that may need to be rented. That adds to the hidden cost of owning tools that contractors don't always calculate.
5. Less investment during expansion. Renting tools is pivotal in the development of a growing business because it allows the contractor to take on more or larger jobs and develop new skills.
6. Lower insurance rates. Owning large, expensive tools provides an asset for a company, but it also creates more items that must be covered by insurance. And insurance rates can go up if the tools are stolen.
7. Opportunity to try out options. Tools can be rented several times as a way of determining whether you should buy them. If you like their performance, you may use them often enough to buy.
1. Cheaper over the long term. If a tool costs less than $1,000 and you expect to use it at least five times a year, consider buying it rather than renting it. The cost of renting it will mount, and the additional benefits of owning it offset that initial investment.
2. Always at hand. That hidden labor cost of sending someone to the rental center to pick up and return a tool may be higher than the cost of the rental. And needing a rental tool at short notice can mean it won't be available, which can slow a job down.
3. Familiarity. Though renting the latest and greatest version of a tool can make things smoother, it can also cost time as crews become familiar with a new operation. Owning a tool provides familiarity that can speed up work and provide a better finished product.
4. Tax benefits. Tool costs can be amortized on a business's income taxes, cutting their cost over time. The full implications of these deductions should be discussed with a tax attorney.
5. Little maintenance. Many tools today require very little maintenance.
Some contractors combine the best of both worlds by buying used tools from rental centers, getting tools that are only a few years old at lower prices. Just be sure to look over the tools well to ensure that they weren't abused by short-term users.
Craig A. Shutt is a freelance writer who specializes in construction topics.
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