Ken
Veteran Member
Bruce with Home Depot renting equip. give them a visit and look at the sad condition the rental equip is returned.
The only reason some rent is they would not use there tractor on the job or the smaller tools.
Thinking about starting an equipment rental business in Arkansas
- Thread starter BruceWard
- Start date
- Views: 25189
Bruce with Home Depot renting equip. give them a visit and look at the sad condition the rental equip is returned.
The only reason some rent is they would not use there tractor on the job or the smaller tools.
Redgoatea
Gold Member
Even with a lot of tractor owners around I'd recommend you consider having a CUT or two around. SCUTs are becoming very common around here but when people need a little more HP for a project they rent a CUT. Our local rental shop has two that are rented out almost every day of the week. Plus you'll want one just for referencing and instructing people on how to attach the implements you rent.
On the downside I miss the days when you could rent on Saturday and keep & use it until Monday when they opened again. Now they've attached hour meters to everything so you pay by the time used instead of by the day. No more free rental use on Sundays.
On the downside I miss the days when you could rent on Saturday and keep & use it until Monday when they opened again. Now they've attached hour meters to everything so you pay by the time used instead of by the day. No more free rental use on Sundays.
DIRTROAD
Platinum Member
My opinion is that you would need to have some sort of an "anchor" and the rental be a division of the anchor.
For example: A hardware store would be a good anchor or a landscape supply yard would work.
For example: A hardware store would be a good anchor or a landscape supply yard would work.
Pops15
Platinum Member
- Joined
- Oct 10, 2009
- Messages
- 645
- Location
- IL
- Tractor
- Ford 555 TLB, Caterpillar Motor Grader, Kubota L245, Ford LGT 125, FABTEK aerial platform
A few things the local rental yard has tried...
They bought an adjacent property that had been some type of dealership (truck, tractor, car...not sure as it was before my time). They decided to rent fully equipped service bays. They quickly abandoned that venture. The people renting the service bays stole allot of tools. They started renting canoes. The canoe rental thing really took off. They have guided river canoe trips now. They are very popular. Not sure how many canoes they have but its allot.
They tried the small concrete batch trailers. I think they held one yard. It was an expensive way to buy concrete and the customers rarely washed out the trailers very well. Last I payed noticed they still had all the equipment but had moth balled that part of the operation.
They bought an adjacent property that had been some type of dealership (truck, tractor, car...not sure as it was before my time). They decided to rent fully equipped service bays. They quickly abandoned that venture. The people renting the service bays stole allot of tools. They started renting canoes. The canoe rental thing really took off. They have guided river canoe trips now. They are very popular. Not sure how many canoes they have but its allot.
They tried the small concrete batch trailers. I think they held one yard. It was an expensive way to buy concrete and the customers rarely washed out the trailers very well. Last I payed noticed they still had all the equipment but had moth balled that part of the operation.
Pops15
Platinum Member
- Joined
- Oct 10, 2009
- Messages
- 645
- Location
- IL
- Tractor
- Ford 555 TLB, Caterpillar Motor Grader, Kubota L245, Ford LGT 125, FABTEK aerial platform
Even with a lot of tractor owners around I'd recommend you consider having a CUT or two around. SCUTs are becoming very common around here but when people need a little more HP for a project they rent a CUT. Our local rental shop has two that are rented out almost every day of the week. Plus you'll want one just for referencing and instructing people on how to attach the implements you rent.
On the downside I miss the days when you could rent on Saturday and keep & use it until Monday when they opened again. Now they've attached hour meters to everything so you pay by the time used instead of by the day. No more free rental use on Sundays.
Everything is still by the 1/2 day, day (8 hours), week, or month here. Always been if you have it on Sunday, you pay for it.
LoneCowboy
Veteran Member
- Joined
- Oct 2, 2006
- Messages
- 1,212
so, every single rental yard here (locals to nationals) has the same insurance policy. It's X% on top of the total (like 15% or more) and all it covers is if the equipment fails while you are using it (ex. the engine blows up). It's NOT like a rental car coverage which is what everyone thinks it is. If you damage it thru user error (ex. flip it into a ditch). YOU OWE!!!
Just FYI, nobody seems to realize that. Getting paid when some local residential guy flips a $50,000 trackhoe is going to be tough. A good lawyer to write up ironclad contracts is going to be key.
rental yards are a tough business, between maintenance, insurance and running around to get the stuff, you've got big costs. You've got big compliance costs from EPA, DOT and local zoning/business/etc.
You've got sales tax issues (and every state seems to have high rental equipment taxes), taxes for the equipment itself, taxes on the business land and building. Remember that commercial buildings are not only taxed at a much higher rate than residential, but utilities are MUCH higher for commercials also. (and you'll certainly use a lot of heating/cooling in a big bay).
Most national chains (RSC, volvo rents, etc) make less than 10% margins, most are less than 5%. And they get way better advertising and better deals (volume) when buying than Joe Blow the single location can get.
Rental yards are very dependent on new construction, which of course is in the toilet and will be for some years. Residentials aren't your main customers, contractors are.
the biggest problem with a rental yard is dead costs. You have to have the equipment, but it isn't going to be rented all the time. Finding out what that usage rate is is going to be key for structuring your pricing. (is it 20% or 50% or 70%?). And then seeing if you can make money at what the going rate is. Rates here haven't really moved in 29 years despite the cost of equipment going up and up.
HTH
good luck.
there has to be a rental yard business magazine/organization. It would be well worth it to find it and subscribe. Tons of issues that only insiders would know.
Just FYI, nobody seems to realize that. Getting paid when some local residential guy flips a $50,000 trackhoe is going to be tough. A good lawyer to write up ironclad contracts is going to be key.
rental yards are a tough business, between maintenance, insurance and running around to get the stuff, you've got big costs. You've got big compliance costs from EPA, DOT and local zoning/business/etc.
You've got sales tax issues (and every state seems to have high rental equipment taxes), taxes for the equipment itself, taxes on the business land and building. Remember that commercial buildings are not only taxed at a much higher rate than residential, but utilities are MUCH higher for commercials also. (and you'll certainly use a lot of heating/cooling in a big bay).
Most national chains (RSC, volvo rents, etc) make less than 10% margins, most are less than 5%. And they get way better advertising and better deals (volume) when buying than Joe Blow the single location can get.
Rental yards are very dependent on new construction, which of course is in the toilet and will be for some years. Residentials aren't your main customers, contractors are.
the biggest problem with a rental yard is dead costs. You have to have the equipment, but it isn't going to be rented all the time. Finding out what that usage rate is is going to be key for structuring your pricing. (is it 20% or 50% or 70%?). And then seeing if you can make money at what the going rate is. Rates here haven't really moved in 29 years despite the cost of equipment going up and up.
HTH
good luck.
there has to be a rental yard business magazine/organization. It would be well worth it to find it and subscribe. Tons of issues that only insiders would know.
equipment rental is not were I'd invest my money, unless there wasn't another place for 50 miles or more.
almost anyone who rents, either doesn't really know how to use the equipment, broke thier own equipment or doesn't want to wreck thier equipment doing the job they have in mind.
do you really want to trust any of those types of renters with your equipment?
so many better potential startup come to mind. Maybe a Mahindra pickup franchise if one is still available in your area. The only upside I see to your buisiness plan is equipment is cheap right now, but unfortuneately, there is a reason for that. nobody is using it much now either.
almost anyone who rents, either doesn't really know how to use the equipment, broke thier own equipment or doesn't want to wreck thier equipment doing the job they have in mind.
do you really want to trust any of those types of renters with your equipment?
so many better potential startup come to mind. Maybe a Mahindra pickup franchise if one is still available in your area. The only upside I see to your buisiness plan is equipment is cheap right now, but unfortuneately, there is a reason for that. nobody is using it much now either.
Really? the only possible problem would be if the company royally flubs it. Its a new product to the market that has demand for it already. Plenty of potential buyers for a heavy duty fuel efficient truck with headroom in America. You'd have limited direct competition because they won't put another dealer in right next door, and nobody has a similar vehicle available. Those are the types of things you should be looking for if you want to start up a buisiness.
Going into a buisiness were the demand is down and you have multiple mature competitors seams foolish in general, and downright stupid in comparison.
Pops15
Platinum Member
- Joined
- Oct 10, 2009
- Messages
- 645
- Location
- IL
- Tractor
- Ford 555 TLB, Caterpillar Motor Grader, Kubota L245, Ford LGT 125, FABTEK aerial platform
From what I've read about the Mahindra truck is that it will be too high priced for the people that want to buy one. Don't you think that Ford and Toyota are watching Mahindra closely? IF Mahindra sales are strong it won't take very long for the other makes to come out with a comparable truck.
I'm not convinced demand is down for a rental business. Maybe for the ones that only offer tractors and equipment, but the ones that rent everything from power tools, drain cleaners, wedding decorations, canoes, etc, etc are doing well. When the economy is bad more people make repairs and improvements themselves rather than hire contractors. They also tend to rent rather than buy things they might just use a few times.
