ProfitDig's Jeff Spencer, a highly experienced construction project manager and company owner, discusses renting versus buying equipment, especially for new contractors. Jeff advises that you own your smaller tools and equipment, But heavy equipment is extremely expensive. Renting equipment gives you the flexibility to turn a piece of equipment in if you no longer need it or don't have any work for it. Buying it, on the other hand, ties you to that bank note. A new contractor starting out has no backlog. As you build up a backlog of work (at least six month), then it may be time to consider purchasing some of your equipment. As your backlog increases, you can gradually buy more of your equipment.
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