A construction company is only as good as its workers and the equipment that they use. Just like the construction accounting software that you implement, your worker’s equipment should be up to date and kept in good working order.
But is it better to buy or lease your construction equipment? That is a question that has caused countless debates all throughout the construction industry. Both sides present valid points, but in the end, the best answer is the one that you choose for yourself.
Only you know what works best for your construction company, so the decision is solely yours to make. But if you are having trouble figuring out how to judge what would work best for you and your team, here are a few good places to start brainstorming your next move.
Productivity in the Workplace
When it comes to your overall productivity, buying your construction equipment is clearly the better choice. When you own your equipment, it will always be available for your workers to use, whenever they may need to use it.
Also, owning a specific brand of machine will allow your workers to get used to the particular control quirks that each brand of equipment has. When you lease, you are likely giving your workers different tools for different jobs, meaning they will not be as efficient as if they were using the same type of equipment for every job.
If you are newer construction company or you don’t have a large amount of cash on hand to purchase new equipment, leasing is definitely the better option for you.
Buying new construction equipment is a large investment that requires heavy costs up front. When you lease, you mitigate those costs and put them off until you finish certain projects, which then in turn will yield you more cash in the short term.
Finally, owning equipment comes with maintenance, storage and transport costs, which are all taken care of by the company that you lease equipment from. Leasing is a great way to save money and budget for greater spending down the road.
While leasing equipment results in greater amounts of cash on hand, buying them always turns out to be the best investment in the long run. If you have the finances to afford new equipment now, it’s probably a better investment to purchase the new equipment right away.
Leasing costs add up as time goes by, and the amount of money you put into leasing yields no return on investment. When you buy new equipment, your total cost in the long run will be lower, and you will even have a used piece of machinery to sell down the line.
The only exception to this is if you are expecting a drought of work in the coming months. If your workload seems sporadic, it may be better to lease equipment until you have a consistent project schedule. That way, you are not paying for storage and maintenance costs with no projects to boost your revenue. With leasing, you pay to use equipment when you need it, not for merely owning it.