The typical dictionary meaning of construction is the act of building something, generally a huge structure. Construction is a capital intensive industry as it requires huge amount of capital and finance. Most companies engaged in construction business face finance crunch because of heavy expenditures and returns being long term. One of the most important deciding factors in the monetary success of a construction company is the expense incurred in the form of cost of the equipment. Throughout the world it has become a standard practice to hire equipment whereas the Indian construction companies are still old school and choose to buy their machines in place of renting them.
Leasing Construction EquipmentThere are various advantages of renting or leasing construction equipment rather than buying them which makes it a suitable choice to be considered. Storage cost is one of the hassles of possessing equipment of hydraulic aluminium cylinder. If the equipment is rented, then the company who is renting it does not have to bother about storing it. Storage is the responsibility of the renting company. In addition to that, big companies have projects and contracts throughout the country and so they have to transport the machines to the varying project sites. Thus, hiring the equipment is a convenient choice as it reduces the cost of storing it. Another benefit of hiring heavy equipment is that its maintenance is the duty of the renting company. In case, the equipment, such as hydrostatic test pump, breaks down on the project site, it is the responsibility of the renting company to bear its cost of replacement.
Technological improvements occur at a rapid pace and hence render the old machines and devices obsolete. Renting or leasing enables one to use latest and advanced technology without actually purchasing it. Thus, it helps business organisations to gain access to advanced technology at low rates. Hydrotest hand pump rental is one such example. It provides financial advantages as well. Capital costs incurred in case of buying the equipment have to be charged over the life of the asset whereas rentals or hire charges are treated as revenue expenses and are entirely charged in the same accounting year. Renting enables one to try and use the equipment for a considerable period of time thereby helps one to make an informed decision whether one wants to lease or buy it. Transportation is a big challenge due to the high cost involved in interstate transporting of equipments. Shifting the machines from one location to another is very costly as compared to renting it from local renting companies. It helps to support the core fleet at lower costs and thus helps to engage in projects at viable prices.