To Rent or Buy Farming Equipment? 3 Questions to Inform Your Decision
For your farm to be profitable, productive and sustainable, you need to employ the right tools and equipment at each stage of the crop production process. You need equipment for land preparation, planting, crop maintenance, fertilising and harvesting. Unfortunately, farm equipment and machinery aren't cheap. Thus, if you're new to farming, you may have to choose between buying and renting the equipment.
Below are some critical questions that should inform your decision to ensure you develop a profitable and productive farm.
What Is Your Current Financial Situation?
Finances are the most crucial factor when deciding whether to rent or buy farm equipment. As you consider your options, think about your financial situation. Purchasing new or used farming equipment is an expensive venture. Do you have the financial ability to do so? Do you have sustainable and practical financing options?
Leasing or renting equipment is a cheaper option in the short term. However, you can't look at the project from a short-term point of view. What if you need equipment for the next five years? Will renting end up being more expensive than buying?
For short-term use, renting equipment is an ideal option with lower initial capital requirements. However, buying is cheaper over the long term if you're able to invest in the machinery.
Do You Need Equipment Throughout the Season?
Think about whether you need the equipment throughout the farming period or for a short time. For example, pieces of equipment for clearing land, soil preparation and planting are only required at the start of the planting season. Similarly, you only need harvesting equipment once the crop is ready.
However, other types of equipment, such as those for pest control and fertilising, may be needed throughout the season. It would make sense to buy the equipment you will use for more extended periods and to rent what you need to use periodically.
Do You Have Operation Experience?
Most types of farm machinery require expertise to operate. If you don't know how to use them, you can damage your crops or end up hurting yourself. Should you decide to buy equipment, you have to undergo training on how to operate it. This option would be ideal if you'll be using the machinery regularly.
On the other hand, when you rent, the rental company can give you an operator as part of the package. This is an excellent choice if you don't have operation experience and you only intend to use the machinery for a short period. However, note that getting an operator can slightly increase the rental cost. That can be a worthy investment, though, as the operator is responsible for the equipment and any damage that occurs to it while in operation.
The decision on whether to rent or buy farm equipment doesn't have to be a hard one. Think about your financial situation, your operating experience and how long you'll need the equipment. Once settled, find the right company for equipment purchase or rental.
For more information, contact a company that has used farm equipment for sale.