Renting out you're own equipment?

[scoutcub]

I own a CAT 312 excavator for personal use. Just used it to dig out a bank for my garage project. Concrete sub was admiring it as he has a mini-ex and mentioned possibly renting it from me for a job he's bidding on that would make it much easier on him with the bigger machine.
What about insurance, rental rates, breakdowns contract, etc. ....any advise would be appreciated!

 

[schmism]

mentioned possibly renting it from me for a job he's bidding on that would make it much easier on him with the bigger machine.

I think you mis spelled renting it from me.... its supposed to be hiring me


as for insurace.... cant help there. its an odd thing to have as a personal use machine.
What do you currently have for insurance? farm? or simple homeowners? do you know you have coverage on it already? I know if i brought home a 40K (or more) piece of equipment and didnt call my homeowners and it caught fire on my property, id be in for a fight to get reimbursement.

 

[wykubotaguy]

I wasn't in your exact situation, but I have a l3400 that several friends wanted to borrow. Called Insurance company about off property use. Told me homeowners wouldn't cover it. Asked about full replacement coverage and was told $250 plus a month for that. So i decided that friends wouldnot get to use it.

 

[EddieWalker]

With so many rental companies out there that make a living doing this, why would you want to take on the responsibility of renting out your machine? Can you make enough money at it to make it worth your while? Especially if something breaks on it, or he abuses it, which will cause something to break down the road?

To me, it's not a smart idea to let somebody else use anything that you have unless you realize that it will not come back in as good a shape as you had it before. For my brother or dad, I do this all the time realizing that will happen. Both are also excellent at replacing anything that breaks without having to be asked to do so. Will he?

If he wants to rent one, let him rent it from a business who knows what they are doing. You will only regret doing this.

Or do like sshmism suggested. Have him hire you to oporate it. He'll need an oporator, tell him what you will charge to move it there and oporate it. More then likely he'll say no.

When sombody asks to borrow something, I tell them that I want a deposit of the full value of the item. If it comes back in perfect condition, I'll give them back all their money. If not, I'll replace what's broken and give them back the change. Guess how often I've loaned something?

Eddie

 

[JCB]

Schism nailed it in the first line. It's really the only way to manage your risk.

Making a little cash is tempting ,but if you try to undercut any other price the sub can rent a hoe for you're doing yourself a disservice.

 

[BruceWard]

I am considering starting a rental business. From my discussions with insurers they do not offer any rental business policies for less than $4K a year. Policies like the KTAC (Kubota) insurance do not cover rental. They exclude "conversion". Conversion is where you transfer the machine to someone else to use and they do not return it. KTAC covers theft. But if you rent or loan your equipment to a friend and they convert it KTAC will not pay out.

Rental liability policies are most of the expense of rental insurance.

Personally I like the idea of renting to a few trusted contractors. I would see what insurance coverage he has and how it would cover your equipment.

 

[johnrex62]

Another thing to consider is that collecting a fee for the use of your equipment converts that item into a commercial property and usually excludes it from your homeowners policy altogether. It is the same idea as your auto policy not covering a vehicle if it is used as a limo or taxi.

Unless you can make a LOT of money and rent it out regular, I was keep away from that idea.

 

[Pops15]

Talk to your insurance agent. I think you'll quickly lose interest in renting your machine. You'll need a commercial policy to cover the machine, and commercial liability coverage, and you'll need to specify that you're renting it out. Don't even think about renting it without insurance. I know of a guy that hit a Western Union buried cable back in the 1950's or 60's. Cost him $14000 an hour for their down time! Think what it would cost if your renter hit a fiber optic line, gas or water main, buried electrical lines, or accidentally tears up one of his customer's property with it?

If you operate the machine for hire you'll still need the commercial policy, and quite possibly a contractor license and bond. Oh yeah, along with the commercial policy you'll need a rider for underground work. That can get very expensive! Don't forget the truck and trailer you transport the machine with will have to be covered on your commercial policy.

 

[CurlyDave]

I just don't rent things out. Period.

The rental companies which exist are in that business and set their rate so as to cover their costs. If someone wants to pay me less, I am going to start out losing money.

 

[beemerphile]

I have a personal use JCB 8032Z mini-ex and was thinking about the same thing - renting it to a friend who is a contractor. I had not thought about the level of complication that this could involve. I have no worries about him abusing it because his excavator operator taught me to operate mine and he taught me about the maintenance. So I know he is thorough. Possibly if his insurance covers the machine while he is using or transporting it then it could still work, but I know some more questions to ask and things to consider.

So, thanks though it wasn't my thread!

Lee