While homeowners do rent some small construction equipment, contractors and construction managers need more heavy-duty equipment. Owners of small construction and contracting businesses are often faced with the dilemma of deciding to buy versus rent heavy construction equipment.
Ultimately, the decision depends on your upfront financials, your ability and willingness to maintain and store the equipment, and how often you use a particular type of construction equipment.
When we were talking with a concrete contractor about a new patio and driveway for our home, we discovered we could save some real bucks by doing the demo of our old cement ourselves. But breaking up and disposing of construction materials is heavy work, and we didn’t have the right equipment.
So, we looked into the option of renting construction equipment and found that you can rent everything you need, from a jackhammer to a skid steer loader to a roll off dumpster able to handle heavy concrete. We ultimately decided to contract out the demo work, but did learn about the construction equipment rental options available.
Some construction equipment is readily available and quite affordable to rent or buy. But you may find some types of equipment more challenging to find. During the height of the COVID-19 pandemic, the construction equipment rental market saw a decline as infrastructure, resulting in a slowing of housing construction.
But by 2021, the rental market was booming back. Even so, many small and mid-sized construction companies chose to rent rather than buy due to continued uncertainty and supply chain issues with buying new equipment.
Buying and renting construction equipment has been more challenging in the past three years, but analysts expect increased demand over the next decade. U.S. construction activity is expected to increase by about 6% by 2028. This will fuel higher demand for construction equipment purchases and rentals.
According to Ryan Greenawalt, CEO of Alta Equipment Group:
“Demand for both new and used equipment continues to be at high levels and sales backlogs remain at record levels.”
So, if you are in the market to buy or anticipate needing reliable equipment rentals, it pays to plan ahead. Evaluate your needs, create a budget, and figure out if buying or renting is right for you.
There are several pros and cons to purchasing construction equipment. Review these reasons to buy and how that decision might impact your bottom line and your project workflows.
Pro: Buying equipment will always give you long-term cost savings. This is especially true if you purchase equipment that you will use often or for a variety of projects. The longer you keep the machinery, the more long-term savings you’ll realize.
Con: Purchasing equipment requires high upfront costs. You can keep those costs down somewhat by looking for used equipment, but you still need to drop some serious money on most construction equipment. It will also depreciate be worth less when you try to sell it in the future.
Pro: Owning your own equipment means that you control its availability. You won’t have to face a delay or be put on a waitlist. You can use your equipment whenever you need it and have it available for as long as you need it.
Con: If you are working on more than one project at a time, you may be limited in availability if both jobs need the same equipment. This can be a hassle, particularly if the projects are separated by a wide distance. Further, you will need the space to store your equipment. This can be a significant added business cost, especially when you have very large equipment such as bulldozers, graders, backhoes, or dump trucks.
Pro: When you purchase your own equipment, you quickly become an expert at using it. This can cut down on delays that happen when you lease equipment and need to train your crew on how to use it.
Con: Once you purchase construction equipment, you will have it for the long-haul. If you decide the model you have is not right for you or your business needs, you are still stuck with using it and making it work.
Renting construction equipment also has both pros and cons. A decision to rent most often comes down to budgeting, maintenance, and storage and transportation costs.
Pro: When you rent, you only have to budget for the rental cost, rather than the larger cost of purchasing equipment. You can control costs by only keeping the equipment for as long as you need it. You also avoid all maintenance costs, which are a significant cost in the construction industry.
Con: Over time, renting equipment adds up. The more you rent, the closer you get to the purchase cost of the equipment. If you need a specific type of equipment frequently, you’ll eventually pay more in rental fees than it would have cost to buy it outright.
Pro: Renting equipment gives you access to the newest technology. You also have access to specialized machinery that may be better suited to your specific needs. This gives you the ability to use equipment you might otherwise not be able to afford.
Con: On the other hand, some rental companies keep their equipment way past its prime. It does make sense that they want to reduce their own purchasing costs. But this could mean you end up with older machinery that is difficult to use or breaks down more frequently.
Pro: Storing and fixing construction equipment can quickly eat into your bottom line. As your business grows, you could face a storage space crunch. Maintenance requires hiring a mechanic, either as an employee or a contract service professional. Renting eliminates all these costs and saves you all this hassle.
Con: During peak-construction season, demand for rental equipment increases. This could leave you empty-handed when you most need a reliable equipment rental. You may have to postpone work or accept less-than-suitable equipment alternatives.
There are many factors to take into account when deciding between renting and buying construction equipment. In many cases, construction pros decide to do both. You’ll likely find that it makes sense to invest in some frequently-used equipment and buy it outright. For other types of equipment, you can save money by only renting it when you need it. Consider your budget and financing options, number of projects, and your storage ability before making your decision to buy or rent this type of equipment.
When you have lots of construction or demo waste, renting a roll off dumpster is your best bet! At Discount Dumpster, we’re pros in the construction disposal industry. We work with contractors and construction managers to provide affordable and reliable roll off dumpster rentals.
Contact us today to talk more about your project, get expert advice, and get our streamlined and hassle-free service on your next dumpster rental.
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