RENT or BUY

I was wondering would it be a good idea to rent equipment for my first few jobs or just go ahead and buy when I get everything together.

What type of jobs are you considering doing and what type of equipment?

I will be doing land clearing and grading jobs, I was looking into buying a trackhoe and dozer and renting other equipment when I need to.

Do you have enough jobs or leads in the market to keep a purchased piece or pieces of equipment running enough to make money and pay the note? Or will you be paying cash for the equipment? Two different business models depending on your situation.

What size jobs? Residential, commercial, both?

A mid-sized track hoe (315, 320) and a 953 is a good combination depending on the project.

I don't have any jobs lined up just yet bet working on it, I would like to get a 315 or 160 size trackhoe and dozer or loader and it will be financed.

OK. I would get the jobs lined up first and rent equipment as needed to complete those jobs. Your profit is going to suck on these jobs as rental equipment is expensive but it comes with the comfort of sending it back after the job is done with no further financial obligation.

Rental will allow you to take on different jobs with different equipment needs to get you started and establish yourself in the market. Don't worry about any perceived negative image with showing up with all rental equipment for a job. Most all customers don't know the difference or don't care, they want a quality job done for a reasonable price. How you choose to do it is your decision. The most important part is producing the desired result for your client, that creates reputation and repeat customers.

Just be careful getting into debt, the excavation business is a fickle market where fortunes can be made and lost quickly.

Renting will be fine with me for a little till I'm ready to buy.

Get your foot in the door and get a feel of what you'll need for the projects that come your way. It's an interesting phenomenon in this business when starting out how work finds you. You may have designated a market to go after and that's what you want to do but later find that different sorts of projects come your way on a regular basis.

For example, you might want to only do clearing jobs and find that after the first clearing job a person, maybe a neighbor, wants you to build a pond. You take the job and find out you're good at building ponds. You take the first pond job and the customer is happy and they tell their friends. Next thing you know you're a pond builder. Sure it includes clearing and grading but it's a specialty you might not of thought of. I know it's a simplistic analogy but it's how this business works and the cool part is there are many different aspects to exploit in the realm of excavation.

Commercial, residential, industrial, farms, land, etc. There is all sorts of niches out there to be had and if you find the right niche it can be profitable and allow you to reach your goals. Work hard and preserve your cash, don't over extend yourself with equipment payments in the beginning until you have the work load to make those monthly payments, as the come regularly, regardless of work flow.

If you start clearing ground with a rented excavator you will probably be buying pretty quick.....when you get the bill for the damage:beatsme

Not at all trying to be a smartass here, but you might be puttin the cart before the horse a bit? You need to be worried about the work first, what you're going to do it with second. How sure are you that the market is going to bear another provider? Dozierdigging has a thread about this very work. He's using a cheap track loader and skiddy, and seems to be making a living, but not much more. This clearing and grading market down there sounds a bit rough. Just calling it like I am seeing it.

Have you ever thought about subbing out the work I dont own a large excavator or big dozers etc..... when I get clearing jobs I sub it out and I tackle what I can with my equipment but when I clear land I try and land it all clearing grading water sewer drainage asphalt leaving the site ready to build that way I can make a little on what I cant do and make good money on what I can

Shimmy1 said:

Dozierdigging has a thread about this very work. He's using a cheap track loader and skiddy, and seems to be making a living, but not much more. This clearing and grading market down there sounds a bit rough. Just calling it like I am seeing it.

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Markets vary greatly from city to city and state to state. I wouldn't base my business decisions on one persons experiences in another state.:cool2

Landclearer seems to be doing very well in SC clearing and grading.

Line up the work and go rent the machine and sleep well. I would do that for several months unless you have saved money, family money, or connections. You will be paying a lowboy too. The rental place might deliver the machine to the initial job then you will be paying a transport company from job to job. I started with a couple jobs. Then I pursued a rental. Then I pursued a transport company. I ended up renting for one year. Renting is not bad. Every hour you put on your own machine will be depreciating the value and longevity of the machine so paying for a rental is not that painful plus you have zero maintenance worries. Used machines could be time bombs. I have friends who have bought machines and don't get a weeks worth of work before something big goes out... then you are in a heck of a bind with payments and repairs and no production. Needing multiple pieces of equipment right out of the door seems risky. A track loader will clear and do everything.... at least that would be my route. I'd rent a track loader. Of course we don't know the job scope yet so it's hard to say what would be best. Also looking back if I had financed a machine from day one I would've been fine but I could have crashed and burned. Good luck!! Go for it!!

Depends on how your going to use it.

Long term : buy
Short term : rent