If you have equipment that sits unused in the corner of your worksite or in the back of your garage or barn, why not find a way for it to make some money? One increasingly popular solution is peer-to-peer (P2P) renting, where you rent your machinery out to other contractors or businesses who could actually put it to work. Who knows, it could turn out to be such a profitable side-hustle that it becomes a major revenue stream for you. Renting out your equipment seems simple enough — and it is! — but there are some things you should know before getting started, from getting insured and writing contracts to advertising and servicing the rental. Here are Equipment Trader’s tips for renting out your idle equipment:
1. Confirm the Equipment is in Working Order
First things first: does the equipment even run? Especially if the machinery has been sitting unused and untouched for a long time, you need to double-check that it is ready for work. Give it a thorough inspection and tune-up to ensure you can provide a working rental to possible customers.
2. Be Absolutely Certain You Don’t Need the Equipment
If you rent out a piece of equipment and then realize you actually need it, demanding a renter return the machinery would be unprofessional and would likely break the legal rental contract. Instead, you’d likely have to rent or buy new equipment yourself. Save yourself the headache and triple-check you don’t need the machinery by considering your upcoming projects, seasonal trends, and potential unexpected needs.
3. Make Sure There is an Active Market
You’ve got equipment to rent out, but are there contractors and businesses near you who might want to rent the machinery? If you’re in a populated area or an area with lots of work going on, then you can probably find some customers. If you’re in a rural area without many other people using heavy equipment, it could be tough to consistently find renters and you may just want to sell.
4. Get Insured & Permitted
Because equipment rentals involve people other than your own employees using the machinery, rentals do have liability risks that need to be insured. You don’t want your entire business to be derailed if a renter gets hurt operating your equipment. Consult your insurance provider to see what policies and coverages can protect you and your business. You should also check if your local city or county requires special licensing or permitting to rent out heavy machinery.
5. Think About Forming an LLC
If you think you’ll be renting out equipment for a while, or have multiple pieces of machinery to rent out, you may consider forming an official rental company, which you could designate as a limited liability company (LLC). Forming an LLC keeps your rental business separate, so if your rental company is hit with a lawsuit or bankruptcy that causes it to be liquidated, your personal assets would not be affected. It’s a great way to lower your risk with renting out equipment.
6. Know How Much to Charge
You want to rent out your equipment at a price that returns a profit but isn’t so high that it turns away potential renters. The best way to determine how much to charge for your rentals is to compare prices. See what your local home improvement stores are charging for heavy machinery rentals, then check out rental prices on online marketplaces like EquipmentTrader.com.
7. Advertise the Equipment
People need to know that you’re renting out equipment, so do everything you can to market your for-rent machinery. Advertising should include a notice on your website, posting on personal and business social media accounts, and listing on marketplaces like Equipment Trader. In your advertising, include the rental price, lots of photos, and a detailed description that emphasizes the benefits of renting heavy machinery, including affordability, flexibility, and opportunity.
8. Help Consumers Rent the Right Equipment
Understanding the work a renter wants to complete and being able to provide rental suggestions helps you provide a more satisfying renting experience. By being a reliable source for machinery rentals, you’ll earn more repeat business and referrals.
9. Provide Rental Transparency
When someone is interested in renting your equipment, be as up-front with them as possible. Allow consumers to inspect the machinery, offer the equipment’s use and maintenance records, and encourage them to check into your own background and reputation. Providing transparency throughout the process will give customers greater confidence in renting from you.
10. Draw Up an Airtight Contract
Clear and comprehensive contracts help prevent confusion, disagreement, and undue liability. Work with an attorney to write up a standard rental agreement to ensure the contract is valid, loopholes are closed, and that you accept no liability for any harm, damage, or injury incurred while the renter is operating your equipment. Both you and the renter should sign the contract. The agreement terms should include
- the full cost to rent,
- security deposits,
- billing policies and timeline,
- exact length of the rental,
- machinery pick-up/delivery and drop-off/retrieval,
- who can use the equipment,
- how the machinery should be used,
- acceptable wear and tear,
- fuel surcharges,
- what the renter should do if there’s a problem,
- penalties for damage, loss, and late returns,
- and anything else you and your attorney decide is important.
11. Ask for a Security Deposit
You likely want a renter to provide you with a deposit up-front to cover the current value of the machinery. If the equipment is returned in good condition, the customer gets their deposit back. If not, then the security deposit goes toward repairing or replacing the machinery. Without the deposit, a renter might never return the equipment and you’d lose this extra revenue stream.
12. Offer Training
Training is a great way to help ensure that renters use equipment safely and in-line with the rental contract. They’ll appreciate it because it protects them and helps their work go more smoothly, and it benefits you because the machinery will be more likely to come back in the same condition it left. Offering training is also another way to earn more repeat business and referrals.
13. Provide Your Contact Information
If something goes wrong or if they have questions, the renter needs to know how to contact you. Be sure to clarify your phone number and email, your typical hours of operation, if you’ll respond outside of typical business hours, and if you promise to respond within a certain period of time.
14. Inspect & Service the Equipment After Every Return
After every rental return, the equipment needs to be carefully inspected and fully serviced. This serves several purposes. First, the inspection tells you if the machinery was damaged during its recent rental. Second, consistently maintaining the equipment extends the machinery’s life cycle – and the amount of time you can profit from it. Third, servicing the equipment helps ensure that it runs well for the next renter, which will make them happy and more likely to rent again or recommend you to others. Finally, keeping track of maintenance and repairs provides another level of liability protection since you can prove you’re giving renters safe and functional machinery.
15. Consider Offering Long-Term Rentals
Some renters will want to rent your equipment longer than others. That’s good for you, because it guarantees a longer amount of time that the rental will be bringing in money. Consider offering discounts for long-term rentals to attract that prolonged business.
P2P equipment rentals are increasingly popular, and if you’ve got unused machinery sitting idle at your worksite, why not offer it for rent to your fellow contractors and businesses? These tips should be a great place to get started. And if you’re looking for your next piece of equipment, get started by browsing all the for-sale and for-rent machinery available nationwide at EquipmentTrader.com and our sister site RockAndDirt.com.