Save Money With Equipment Rentals
If you own a construction company, you may find that you need a specific piece of equipment from time to time. Instead of looking on the lack of equipment as a sign that you need to buy more items to get your business to the next level, you might be better off to rent equipment and save yourself some money in more ways than one.
Here, you can learn about some of the best ways to save your business money by renting equipment instead of buying it:
Increase Tax Deductions for Rentals
When it comes to a business that is growing rather quickly, it's easy enough to forget about some of the tax issues you will need to face at the end of the year. When you buy equipment for your business, this isn't really a deduction. You may get to deduct the cost, or a portion of it, but at the end of the year you are still going to have to claim it as an asset. Assets add to your overall worth as a business, even with the up front cost being a deduction of sorts.
Generally, if you buy an item and the item is going to be used by the business for 365 days or more, it's an asset, not an expense. However, renting equipment, even if it's rented for 365 days or more is a deduction because the business doesn't own it.
Reduce Maintenance Costs
When you own your own equipment, you bear the brunt of the maintenance costs. If the item breaks down, you still have to find a way to keep construction going, but now it may be more difficult to do. At the same time, you will either have to repair or replace the item that broke down.
Companies who rent out their equipment tend to keep it in good working order because they need to be able to rent it continuously and make it last as long as possible. That means you don't have to worry about maintaining the equipment other than minimal things like adding oil to the engine.
Limit Storage Space
You need all the room you can get to keep your business running. Building supplies and tools take up a lot of space. If you store equipment, you could be just wasting space. This is especially true if the equipment is not being used on a regular basis. By renting equipment, you won't need storage space because you simply return it when you are done with it.
Every business owner wants to add to their assets, but sometimes it's more efficient and cost effective to use the rental method rather than purchasing items. In the long run, it could reduce your operating costs and also provide a sound way to reduce tax payments at the end of the year. To learn more, contact a company like Vantage Equipment with any questions you have.