The cost of living is always going up and options to generate more income, especially passively is always a great option. One great option is to invest in expensive equipment and then rent it out to those who only need it occasionally. Rental tools and equipment can be a lucrative business and equipment owners can earn a steady stream of income. In addition, people who work in an existing profession where specialized equipment is needed can possibly make income off their existing assets as well.
Perks of Renting Out Expensive Tools and Equipment
- If you own existing equipment, regular utilization saves it from rust and corrosion which extend its use.
- You get a greater return on your assets if they are in use and providing you income. When they are idle they aren’t generating revenue.
- Renting out equipment doesn’t require more capital investment and doesn’t impact your credit-to-debit ratio. You can also use the proceeds to invest your cash in more equipment to rent.
- You can sign an agreement with a rental company and they will manage the rental process. In most cases they are responsible for the maintenance of the equipment and provide insurance for damage. Of course, there are associated fees.
Tips for Starting an Equipment Rental Business
Always study your market and try to offer tools which customers really need in that area. To get trustworthy statistics, you can make a survey in the area and ask people about the tools and equipment they need the most. Idle inventory is can be fatal for rental businesses especially if the equipment is financed and you need income to cover the payments. So its very important to make sure you are picking the right equipment.
If you’re not going with a rental company, you have several things to consider when getting started. Set affordable yet realistic rates to achieve your desired profit. Build an online presence and be responsive to customers’ queries. Facebook, Twitter and Instagram are great platforms where you can exhibit your tools and equipment and provide information about your business to a specific community.
To grow your business, treat your client right as rental business is a repeat driven business and if you want that customer again then create a hassle-free environment and don’t over negotiate. Moreover, accept some terms of the customer while signing an agreement as it shows you value your client. Regular maintenance of tools is also important because your entire business is dependent on having working equipment. Make sure the equipment is in good condition and never delay if anything needs to be fixed or requires proper repairing.
Cash-Making Rental Equipment
Studying the market is an important task to find out the needs of an area. But, some equipment and tools can be used in any community. Following are some types of widely used equipment and tools:
Aerial Lift Rental: To accomplish hard to reach jobs, an aerial lift can be invaluable. This can be used in construction, painting and landscaping.
Forklift: The use of forklift ranges from big departmental stores to industry warehouses. It’s a powered industrial truck to move material over short distances. If possible have different sizes and capacities available to meet your client needs.
Landscape Equipment: Often companies will need extra landscape equipment for a big project or even some home-owners need it for the maintenance of their lawns if they have larger acreage. Providing a full-service equipment fleet can prove highly lucrative with specialized equipment most people and companies don’t need every day. Tillers, straw blowers, landscaping tractors, mortar mixers, two-man augers, paver saws, light compaction equipment, and trenchers are some commonly used landscaping tools which are often needed.
Track Loader Rental: Whether you’re constructing a home or a small foundation or other project where you need to move a lot of material, a track loader is indispensable. The versatile earthmover capable of moving in small areas and works in construction sites.
Excavator: Terrain and project nature determine the type of excavator you need. Caterpillar hydraulic excavator, crawler excavator, backhoe, and suction excavators are some of the common types which have different purposes.
That’s just a few ideas. Depending on your budget, existing tools and equipment you already have you can decide what items will be the best fit for you and your local market.
Mistakes to Avoid
Following are some common mistakes which a rental business owner can commit that should be avoided:
- Not mentioning conditions for additional cost for damage or use in the rental contract.
- Poor communication with customers and no timely response.
- Not setting realistic rates and setting low rates for expensive equipment in the start of the business just to attract more customers.
Renting out professional equipment can be a money-making business if done properly. Knowing your local market needs, ensure you have the financing in place to purchase the equipment (if you don’t have it) and planning out your rental strategy will be key factors in successfully building a passive income. Also, strongly consider using a rental company to manage the entire process for you. This will make the income stream even more passive while you look for other opportunities to make money.