Is Renting Equipment Right for Your Construction Business?

Is Renting Equipment Right for Your Construction Business?

From vacation homes to Christmas trees and even wedding dresses, these days you can rent just about anything, and machinery for your construction business is no exception.

The equipment rental market is growing quickly, with some experts predicting that rentals will make up 30-40% of revenue for equipment firms over the next 4-5 years.

With more options than ever, here are some variables you should consider when determining whether renting is the right choice for your machinery needs:

  • Timing: The main advantage of renting machinery is being responsible for the equipment only while it provides value to you. Construction rental firms allow businesses to utilize assets for a specific period, from days to years, depending on their needs. This means you do not have to worry about costs like storage and upkeep in between jobs. If you use something less than 60% of the time, you may want to consider renting. 

  • Cost: One of the most attractive benefits of equipment rental is the potential for reducing costs, but it is not as simple as renting being cheaper. A monthly rental payment might be higher than a payment on a loan for purchase; however, it might be less expensive in the long term. Additionally, at the end of a rental period, you will not be left with an asset you can sell. There are many variables to consider, and consulting with your financial professionals can help you make the wisest decision for your business.

  • Equipment Choice: Renting gives you the freedom to utilize a greater variety of equipment types. When you purchase an item, you are invested in that product, but as a renter, you can upgrade when a new model is released or compare similar products. Renting also gives you the opportunity to try out equipment you are considering buying, so you can be confident in your purchase. This is especially helpful if you are in a rapidly evolving field.

  • Maintenance and Repair: As with storage considerations, maintenance and repair can be a burden when you own your equipment, but with rentals, that responsibility will fall to the construction rental firm. A word of caution, as with all costs, some of these may be deducted or absorbed. Make sure you are considering these factors to understand the total cost implications. 

  • Potential drawbacks: Renting has advantages, but you will need to work within the confines of your agreement, and your ability to be flexible with your resources will be reduced. You may also miss out on the increased efficiency that comes with being familiar with your equipment. You will need to consider if these tradeoffs are worth it to your company. 


When it comes to securing the tools your company needs, you have many choices available. There are multiple variables to consider when determining if renting equipment is the right decision, but with strategic use, increased options in the rental market can have a significant impact on your bottom line.

Karen Garrett, CPA, has over 27 years accounting industry experience. The managing partner of HCJ CPAs & Advisors, she is focused, driven, and has a depth of construction industry knowledge.

Areas of service include: Construction; Audit; Multi-State Taxation; Employee Benefit Plans; Physicians; Manufacturing.