Changing Attitude

Why Contractors turn to rental instead of owning Equipment

Story compliments of the ARA Rental Magazine.

By Whitney Carnahan

When it comes to renting versus owing, many say there has been a change in attitude among contractors. While many still own their entire set of equipment, some have found efficiencies and cost savings by renting everything.

Other contractors might own most of their equipment also are starting to find that renting equipment from a local rental store is preferable to hauling equipment to a jobsite that might be hours away from the contractor’s home base.

The result is that store contractors are renting more equipment these days. Steve Smith, president, Universal Construction Co.,Tenexa, Kan., says he’s seen a shift in ownership versus equipment rental for construction companies” A lot of construction companies used to have their own equipment the money got buried in the projects, “ he says, adding that the change started to happen around 10 years ago.

I ‘d say it started in the late 1990s, when you started hiring more rental equipment. I think you see fewer construction companies owning their own equipment now. They specialize in building. Why not let other specialize maintenance? he says.

However, he says there’s also a divide in that heavy construction companies tend to own equipment while general contractors tend to rent more.

Bill Hanah, CEO Nabholz Construction, Tulsa, Okla says that while his company has its own fleet of equipment …does rent from other companies about half the time. He says the debate about whether to continue owning and maintaining equipment, or to rent equipment.

Exclusively, is “ a question we address every year if we own we can control a lot more of the availability of it. Also think it’s always a value issue to our customers, “he says however, he adds, it’s also a huge drain on capital.

Zacary Construction Corp.,San Antanio owns almost of its equipment, but sub-rents from time to time, says project executive Bill Roberts, especially on job sites outside the San Antanio area.In San Antonio it’s about 90 percent we own, 10 percent rental. It’s the reverse everywhere else. It’s not practical for us to haul machines to and from job sites, he says.

Stuart Broeren, president, Broeren Russo Construction Champaign, III says his company own several pieces of smaller equipment, so the equipment it rent is usually large or specialized.

With the raising cost of insuring equipment and ‘making sure its up to speed, safety-wise, Broeren is now more inclined to rent equipment instead of owning it.

However he says the machine’s frequency of use is usually the main consideration. We’re kind of 600-hour type of people, he says. If I am using it 150 hour a year, I just won’t buy it.

Tim Ramos, project manager, Hart Engineering Corp.,Cumberland, R.I.,says the company doesn’t own much equipment and rents what it need s for construction projects. We have relationship with United Rentals and different local lease companies. They pretty much can service whatever we need, Ramos says. The big thing is servicing. Every hour you’re down is costing you money.

While the company does own aerial lifts and compressors and does its own concrete work, Ramose says. Company prefer to rent equipment. I just find in the construction industry that rental is the way to go, just because of the abuse the equipment does take.

Jorge Fuentes, vice president, Gabriel Fuentes Jr. Construction Co. and Fuentes Concrete Pile Co.,San Juan, Puerto Rico, says the location to rent from depends on the availability, but that the debate on renting or buying “ depends on how much tie each week you’re going to use it.

Edris Nendez Olivencia, F & R Contractors Corp., San Juan, Puerto Rico, agrees, but adds that during the busy season, it can be hard to find the equipment needed in Puerto Rico since there are only so may rental places available and work is increasing.

We still own a few basic pieces that we use. Lately, we’ve been forced to rent more. Jim Pilice, part-owner, vice president and director of operation for Haydon Building Corp., Phoenix, say there are several factors that help determine whether the company buys equipment or rents it.

We have relationships with three different companies we’ve been working with for long time. Its depends on whether its big or small stuff. It all depends on the scenario. We own the equipment use on a day to day basis.

In years past, he says, everybody thought that, to be a contractor you had to own everything. Now he says the use of rental has gone up. “There ‘s more competition. Most of our stuff is pretty much on an emergency-need basis, says Luke Anderbloemen, project manager.

Optus West Construction Corp., Addision, Texas. “Typically we have a national account for almost everything. Occasionally, we’ll shop around for long term rentals. He says the company used to own much of the equipment, but maintenance and transporting equipment become too expensive.

Jason Reed, project manager at Opus West Construction Corp., agrees. You need to keep them busy all the time to keep equipment efficient and the you’ve go all the maintenance costs.”