I started an equipment rental business last year and bought two small (2.8-ton) Chinese-made excavators for renting. That is working well. I'm only staying with excavators for now. I recently bought a CAT 305 at Richie Auctions in Texas that came with an undiscovered surprise but will still work well for a rental (I created a post about this last week) I want to add two more larger used excavators and am considering buying them at Richie's auction. I'm in Canada, and when researching used excavators here in Canada, I found that everything that sells at auction has 4000 + hours on it. Even at local dealers, everything used has 3000 + hours on it. When I look in the southern US (Texas, Florida, Georgia, etc..) at Richie's I see many excavators that have less than 1000 hours on them. Also, when comparing auction historical pricing, a machine with high hours here in Canada sells for about the same as a low-hours machine in Texas (even with the dollar exchange, transportation and importing fees. On the Richies website, they have a sale price history look-up, which is very nice. Does anyone on here have any insights on this? Is the construction equipment turnover much more significant in the southern US due to year-round construction? In Canada, we have only about 6-8 months of construction in a year. Also, I'm wondering what the demand difference would be between an excavator and backhole for renting?
I think a lot of contractors here in Texas, run equipment until near the end of warranty, then trade it for new. This way, their machines are always under warranty, as repair costs are getting out of hand. I know my son-in-law does this with all of his excavators, dozers, and CTL's. It is also common for some contractors to buy new machines for a project, then sell them when the project is finished, as they may not need the same type of machinery for the next job. This is not true all the time, but it does happen pretty often.
I just won an Excavator in an auction. I was going to use it about ten hours then flip it. Rental is interesting but I don't know anything about getting started. Any thoughts on getting started after a couple of years in? I know the laws will be different in Canada than here in New Mexico
We don't have any laws to follow when it comes to starting a rental business. One of the things is that people are not always nice to your rental equipment, but that is part of doing business You will find some good information if you do Google searches to start an equipment rental business. Other than that, like any business adventure, it is risk-taking. That is all part of being an entrepreneur. I have another business that I started 25 years ago, so taking risks is easy for me. You will need patience, too. It takes time