It’s a good time to build in America. U.S. commercial property alone is collectively worth upwards of 300 billion dollars, and the light construction industry expanded by 11% last year. If you’re one of the 7 million people tangentially related to the construction industry, you might find yourself renting construction equipment to finish this or that job. Equipment rental for construction is often a sound investment, but it is important to make sure of a few things first before you rent equipment:
1. Understand the job from start to finish
You might have a general idea that you need to rent equipment, but a general idea is not enough. Whether you’re the foreman of the project or simply an expense manager, it is vital that you understand the project steps from beginning to end. That way, you know what equipment you’ll need for what amount of time, and can sign short term or long term rental contracts accordingly. Knowing the equipment options for the sort of tasks you’re completing will also help you to prioritize your rentals, and put you in a better negotiating position with suppliers when discussing construction equipment rental requirements in the contract. In speaking of this…
2. Research and compare equipment rental prices
Once you have a project action plan and a timeline, you can start researching the costs of different options and companies. Don’t forget by the way to do a net present value assessment of renting versus buying the equipment especially if you’re working on a long term project or often use the equipment in question. It could be that the construction equipment rental requirements are actually more stringent and expensive in the long run than buying, even if buying the machine costs more upfront. For more information on net present value, consult a basic finance primer.
3. Create a budget
Every good action plan has a budget attached. Depending on the specific construction equipment rental requirements delineated in your contract, a rental company may even give you a better deal if you can prove your short term solvency. The best way to do that is to present in a clear way what your project is, your funding source and/or revenue projections, and how much is earmarked for the rental expense over time. Finally…
4. Read the fine print
The key thing to note in an equipment rental contract is the type of permitted wear and tear that won’t impose a fee. By their very nature, construction tools are subjected to intense strain, so knowing the financial liability of this going in is crucial to building a sustainable project budget and making sure on-site practices minimize the risks to your equipment rental.
I guess what we’re saying is, build in earnest, but build smart, and know exactly how to do your job with the equipment you borrow.
