What to Know When Renting Out Your Equipment For the Holiday Season
Taking a break from work for the holidays? Or maybe you’re ready to close up shop for the season? Either way, even if you’ll be enjoying some downtime, your equipment can still be put to work for you, and can put some extra cash in your pocket at the same time.
When making plans to rent out your equipment, there are several steps you should take before handing over the keys. We put together the following checklist to help guide you through the process so everything runs smoothly and both you and the renter get more value out of the experience.
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Secure the Seasonal Rental
Before agreeing to rent out your equipment, check with your insurance agent to see if any changes to your existing policy need to be made or if you’ll need some sort of supplemental equipment insurance that covers the liability of renting. This not only protects your machinery, it can protect your business, or the operator of the unit if an injury occurs.
Permits and Licensing
You’ll also want to check if there are any permits or registration requirements, especially if the machinery will be used out of the state where it is currently registered. If permits are needed or there are additional registration requirements, you should take care of those before renting the equipment to another operator. You can add the cost of those items to the rental agreement to recuperate the extra expenses.
The Rental Agreement
Speaking of the rental agreement, you should check in with a lawyer to make sure you have a binding contract created to protect you, your business, and the equipment. The agreement should cover every aspect of what is expected by both parties, including things such as when the equipment will be picked up and returned. Be sure to give yourself ample time between when the equipment is expected to return and when you will actually need it for your own use again, just in case there is a delay.
The paperwork should also clarify who is responsible for the delivery/pickup of the equipment; what type of support is available from your company if there are questions about machine operation; which party is responsible for repairs if any are needed; and additionally any associated costs with these terms.
The agreement should cover whether you expect to have the fuel tank refilled when the machine is returned, and how much extra it will cost if it comes back with less fuel than agreed upon (similar to a car rental). It should outline the pricing of the rental and whether the fees are charged daily, weekly, monthly, or for another length of time.
It’s likely you can find a suitable agreement template online, but you may need to modify it to cover all of your particular needs. Even if you don’t hire an attorney to draft the agreement for you, you should have one review any documentation you find online to make sure it covers all the bases.
Inspect the Rental
Before any piece of equipment leaves your possession, it’s a smart idea to give the machine a thorough inspection, taking notes and photos of its condition and anything that might be disputed in a claim later. When meeting with the renter, share your photos and notes and ask them to do a similar inspection to see if they spot any other damage or issues. Once you’ve both agreed on the condition of the equipment, if a unit comes back with damage that didn’t previously exist, you have proof (and hopefully a signed contract) that shows where the other party may be responsible for any necessary repairs.
You’ll also want to take care of any routine maintenance that might need to be done, such as changing out fluids and filters, especially if you need to go from a warm-weather fluid to a cold-weather fluid (for example, a different grade of oil).
Understand Terms and Conditions
The rental agreement should cover all of the terms and conditions of the rental, including if the renter needs to provide proof of operator expertise (such as a commercial driver’s license, any certifications, etc.) for the person who will actually be behind the wheel or in the cab when the equipment is in operation.
Both parties should sign the agreement, and a copy should be made so each of you has a legal reference if an issue arises in the future. If you have an attorney, you should also make a copy for them.
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Finally, if you need additional equipment for your own business needs, or you’d like to sell off a gently used piece to buy something new, our marketplace has the largest online selection of listings to choose from. You can have the machine you need for your work and when you need to expand the fleet for your rental empire.
Barrett Baker
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