Is a heavy equipment rental business profitable?

The equipment rental industry is growing, and if you’re scouring for business opportunities, this might be your chance to get in on a lucrative one. After all, most rental business income in the United States is actually from tools and equipment rentals, accounting for about $2 billion in annual revenue.

How do I start a rental business?

Here are some of the most important steps to consider when drafting a rental property business plan and becoming a real estate entrepreneur:

1. Join a local REI club and start networking.
2. Pick a niche and choose your rental property market.
3. Figure out the proper financing and secure it.

How is equipment rental calculated?

To calculate a rental, you would multiply the total cost of a piece of equipment x 5\% / month x 13 x 80\% to arrive at the estimated annual rental dollars a rental company wants to achieve. By doing this, they would generate a 35\% to 40\% gross profit, which includes maintenance, insurance and the limited fuel they fund.

What are the advantages to a small contractor of renting equipment instead of owning?

Renting or leasing equipment avoids the upfront costs associated with purchasing, and allows businesses to better allocate their financial resources. When you own equipment, you also have to consider the cost of maintenance and repair.

Why is it generally cheaper to rent equipment than to buy it directly?

It’s Cheaper Renting equipment doesn’t require a huge cost upfront, which allows you to save the money you would have put down in a purchase and use it for other needs your company may have. Renting heavy equipment also saves you money in maintenance and repair costs.

Why do businesses rent heavy equipment?

The reason why many businesses are renting equipment is due to the fact that they do not consider it necessary or worthwhile to purchase heavy equipment for use either due to budget constraints or the fact that buying the equipment would be a waste of resources as regards to leasing it.

What are the risks of starting a rental business?

Besides the formalities of starting any business, a rental business has extra insurance liabilities. Your entire business depends on non-employees interacting with your equipment. So while you want to make sure you have good insurance for your equipment, your customers are your biggest risk.

Can you make big profits by renting out equipment?

You can earn big profits renting just about every and any type of product or equipment imaginable. Top rentals include tools, small watercraft, portable hot tubs, construction equipment, recreational vehicles, movie props, musical instruments, office furniture and equipment, canoes and kayaks, and camping equipment.

What is the value of the construction equipment rental market?

As at 2014, the construction equipment rental market globally was valued at over $4 billion and has been anticipated to go over $84 billion by 2022. This is due to the fact that construction activities were on the increase globally, especially as governments were investing in emerging economies.