How do you decide when to rent and when to buy?

[paulfun9]

If it cant pay for itself its gone or its rented! Simple formula

 

[dodge man]

A couple of thoughts go through my head. If I really need it, can I rent it? If not, you have to buy it. For example, I need a pole saw about 2 or 3 times a year. Its not something you can rent in my area really so I bought one.

If its a want and not a need, how often will it get used. For example, I bought a 21 speed bike about 7 years ago. I paid $350 for it. I've probably ridden it 350 times. So its about $1 every time I ride it, not a bad deal. We bought a bow flex several years ago. It got used twice. Say it cost $500, that was $250 every time it got used, not such a great deal.

 

[CobyRupert]

Renting something you use all the time is a huge waste of money but buying something you don't use often is probably a bigger waste.

How do you guys go about deciding?

If it appreciates, BUY
If it depreciates, lease or rent
Classical lines

...or if it depreciates at a slower rate than what you'd spend in rental fees, you haven't really lost any money. You've just rented it from yourself.

It's important to remember, that if you buy something and don't use it, you didn't waste the money. The money is still there.
It's just that your money is sitting there as a hunk of metal instead of zeros and ones in a computer (i.e. a bank/investment account).

Most equipment is not like groceries that goes bad after a week, becomes worthless and has to be thrown out (i.e. wasted money).

Example: If you can sell that bow-flex for $450, it only cost you $25 per use, which is probably cheaper than renting one for 2 uses.

 

[Texasmark]

When it's to your tax advantage.

 

[newbury]

How do you decide which thread to respond to?
http://www.tractorbynet.com/forums/buying-pricing-comparisons/384064-how-do-you-decide-when.html#post4843093

 

[Cat_Driver]

Renting something you use all the time is a huge waste of money but buying something you don't use often is probably a bigger waste.

How do you guys go about deciding?

Here's how I looked at it. I had about 80K worth of equipment that was not used that often but real handy to have at my finger tips. The thing is the longer it sat around in the sun ( desert southwest ) it wasn't good for the equipment. I dumped everything on one big sale. I took the 80K and invested it which is making me huge amounts of money. So the money I'm making is allowing me to rent for "free" new equipment when I need it. I don't worry about oil changes, parts breaking, service calls, fuel going bad, etc etc etc.
Not as handy as walking over to something and starting it, but I'm actually making more money this way, and I don't have equipment deteriorating before my eyes. It a win win for me. Plus I get to use a variety of equipment rather than being stuck with the equipment I owned, the best this is all the equipment is newer quality rather that 10 year old gear that I had.

 

[ShelleyWeals]

If you have enough money and you are going to use it frequently, then buy. If not, rent one.

 

[Rara Avis]

Renting something you use all the time is a huge waste of money but buying something you don't use often is probably a bigger waste.

How do you guys go about deciding?

I own tons of equipment but some things may get used a few times a year. I have a $40,000 dump truck for example. When first bought it was used daily for months but it has been used maybe four times this year. Heck No more than I use it I could hire a dump truck for $75/hr and it would be cheaper than what I pay in registration and insurance. Thinking about selling it and just hiring it out when I need one. I own a trencher. Probably worth 4K. I have dug two trenches this year. I can rent one for around $150 a day I think. If I sold it I could rent one 26 times for what I have tied up in it. I don't think I have dug 26 trenches in my life.

Things like my tractor and skid steer I will always own as they get used a lot but other things I am thinking of thinning out. If it doesn't get used at least five times a year it is probably cheaper to rent.

If you are doing this for a Farm...you can deduct your equipment rentals on Your Schedule F Line 24a...If you rented or leased vehicles, machinery, or equipment, enter on line 24a the business portion of your rental cost. But if you leased a vehicle for a term of 30 days or more, you may have to reduce your deduction by an inclusion amount. See Leasing a Car in chapter 4 of Pub. 463 to figure this amount.

 

[Complete Turf Care]

I have rented equipment many times. The problem with renting is will the equipment I need be available when I need it.

I have had jobs scheduled and when I needed to rent a mini excavator, it was not available at any rental place.

So, I found a used machine for $8700 and I bought it. I don't use it often, but the price was good and it's there when I need it.