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Construction Programs & Results Inc

We Like to See The Good Guys Win!

Rent or Purchase Construction Equipment?

by Michael Stone

Do you rent or buy your tools or equipment? Here is a quick and dirty rule to follow.

If you are using the tools or equipment more than 25 times each year (once every two weeks or more), it makes sense to buy.

If you are using them less than 24 times each year (less than once every two weeks), it makes sense to rent.

Here is one way of telling if you should have purchased a particular item. Go to your storage area, wipe a clean cloth across the equipment or tool and see how much dust comes up. If it's dirty, you haven't used it in a while and probably shouldn't have purchased it. Yes, there is seasonal equipment like heaters and dehumidifiers that can get dusty, but that is not what we are talking about. How about selling tools and equipment that aren't being used often? Use the proceeds to pay off debt.

Tying up money in tools and equipment that seldom gets used because you "don't have the time to go to the rental agency", is false economy.

Comments

Robert Vandervelden (not verified) /

the rule that I have used in the past is if the rent will buy it in one year than I will purchase it. Bob

Michael Stone /

Bob:

I think you are right on the button with that approach. The important thing to remember is . . ."He who has the most toys . . . has a lot of money tied up he can't use or put his hands on."

Michael

Bob Vandervelden (not verified) /

Since I commented last, we had a gal come in and totally set up 2005 on quickbooks pro contractor edition. Ouch. When I got the first printout and saw the results of some of my decisions. Boy is hindsight 20-20. With all the help you continuously throw our way and keeping our books and info up to date 2006 will be a much better year. Bob

 

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