Hi Everyone, We have been doing international machinery trading for 15 years, and we manufacture and sell attachments too. We have been using third party warehouses so we don't have a yard in USA. Now we plan to buy some land in Dallas - Fort Worth area and focus on machinery rental too. We are very new in rental business, so any tips would help. Insurance, Gps, operator, or any personal to recommend, thank you!
There are plenty of rental companies there now. I don't think they need any more, but you never know. As far as location, well, traffic is horrible everywhere and location is very important. Most of the growth is northward, so, you need a location up near Denton. That puts you near the major highways to Dallas and Ft. Worth, plus highways going east and west. Good luck, you are going to need it. Jeff
Tough market man. I lived there a few years ago and there were rental places everywhere. I can’t imagine what the area is like nowadays.
Really? When I look at the numbers it seems it will work? A used 140m2 grader we can buy it at roughly 140K to 150K and rental is nearly 9000 usd each month. And when I talk to the guys they get rent out most of their machines now
I am telling you it is a competitive business right now, and sooner or later the bubble will burst. I have rented there for the last 12 years, most recently last summer. My son works for Holt Cat, and my son-in-law owns a large dirt moving company and rents often. Yes, it is hard to find a machine SOMETIMES, but one of the companies ALWAYS comes through. "Figures don't lie, but liers do figure !! Just be careful and you will need deep pockets, as the bottom is going to fall out of the building boom before long, just like in the mid 80's.
You forgot the big bottom out of 2009... I remember...
I wont forget it.
Those $150K average sales prices come with 6-9K hours on the clock and 10 years of age. Speaking from a contractors perspective there is no way I am renting a grader with that much age and hours on the clock for $9K per month. I can go to the Cat dealer and rent a newer one for the same money.
I think if I wanted to rent out equipment, I'd start first with a lot of money. A lot of money. I'd fritter it away until I only had half of it left. Then I'd quit. I could live on half of a lot of money. That and I'd live anywhere on the backside of beyond before I'd live in Dallas. Every time I go there I swear I'll never go back. I see something I would kind of like to have, and its priced cheap- and then I see its in Dallas. Its got to be a cat swinger of a deal or I ain't going. So I guess in a way, Dallas has made me money- by me not spending money. Maybe it will be the best thing for your company. Who knows?
I made a good living in the Dallas area for 44 years. But when retirement time got here last year, my wife and I could not wait to get the heck out of there. Enjoying retirement in SE Ohio now. No more 100 degree + days !!!!! Jeff
Left lane is for people driving 20mph under everyone else. All other lanes are for everyone driving 20mph faster than everyone else. The freeway system has been under construction since Eisenhower. It will be finished sometime around the sun becoming a white dwarf star.
I've been trying to convince my wife for us to sell everything and move to New Mexico to escape the 100 degree summer's and the people.
A great little place to retire in a beautiful high valley. Imbler Ore. Farm land all around with a Blue Mountain back drop 360*.
you know I have a soft spot for all that. Mom grew up straight across the blues in Halfway.
I know of a guy in the heavy equipment rental biz. I don't know his business very well but some things I've noticed: 1.) He rents below market......as a contractor why would I take the risk of renting from an independent shop if I'm paying full freight when I can rent from the dealer who has a massive fleet with support etc. So I wouldn't bank on getting dealer rates for your equipment. 2.) Keeping his equipment repaired is a constant battle. Good help is hard to find in pretty much anything these days....skilled heavy equipment mechanic....forget about it. 3.) Going back to point 1...most of your Grade A customers are going to stick with tried and true rental outlets. Meaning you get a lot of people who can't rent from the big boys....some of those people are credit risks and you are all of the sudden chasing money as well. On top of all that you will be buying equipment in a very frothy market. Nobody knows what the future holds for equipment values but what we do know there has been a major run up in values lately. Lots of people are looking real smart right now renting equipment out and then selling a year later for a profit on the original purchase plus collected rent. If things reverse you'll be bleeding money. That guy might be making a zillion dollars and maybe there's all kinds of money in the heavy equipment rental biz...i don't know. But I do know it doesn't seem attractive to me.
Bad time IMO equipment prices are high and due to come down a lot. It does seem like a crowded market in most places. I think a good niche could be a personable small place with good service, many years ago rented everything from one, then Blueline rentals bought them out and I don't think it was 2 years and the location closed. They pissed off all the good employees and they left and hired people who didn't know anything and only gave them a few tries before going elsewhere. I think a lot people prefer to rent from someone smaller who has good service, I know I do and I found there was benefits both ways. Like a handshake agreement about having equipment out for a while but only paying a portion of rent as it wasn't going to be used a lot and it was their slow time of year anyway, the big guys would never do that. But regardless if the market is crowded now does not seem like a good time to jump into it. I mean if you had a few pieces already and they weren't getting used a lot maybe try those but buying anything I don't think makes sense.
Sometimes we get lucky and find 3000 Hours machines at the price, but they are around 10 years old. And yes price would be a bit lower.
Thank you very much for your insights!
Ok Thank you! The thing is that we are already buying machines here and selling overseas, and we have a lot of contacts in the business. Right now we don't have a yard in USA so when we buy some machines, we had to leave it in our friends yard, and it's hard to manage this way. So We are thinking to get a yard in central USA, not too far from port (that's why Dallas seems a good option). We buy machines, park there, advertising them for local rental as well as for international/local sales.
I wouldn't start ANY business right now. Inflation at 40 year high, lack of general workforce, very little skilled labor, devaluation of the dollar, .......how many more reasons do you want?
Before that my location had 18 field trucks and 15 mechanics in the shop. After it we have built up to half of each. I fear the crash because I feel it’s going to make that look like nothing.
That's all very true...We have been in machinery and attachments trading business for 15 years, so not exactly starting from scratch, but yes rental idea is new. Will find out more, thank you!
DFW needs another rental outfit like it needs another highway under construction. There are plenty of rental places in Texas with many more popping up. What this market could use is a alternative to the dealer making complex repairs. Or simply for someone to show up with software to communicate with today's machines. Cat only works on cat, Volvo only works on Volvo, and so on. I could see someone that would want to invest in this part of the market cleaning up. These dealers can't get to all the work that is out here. And they leave a lot of money on the table from passing over the little guy. If they don't want the job they just quote it so high that the customer will either not except the quote or trade the machine in. The only problem with opening a new equipment service shop. Is the acquisition of real talent. You would either need to have really high wages, offer commissions plus a decent wage, or have an awesome benefits package. Maybe all of the above. Those things would entice a good mechanic to leave where he is. But weeding out the parts changers is another challenge. And then there's atmosphere. If you're a slave driver, get it done at all costs, scorched earth approach kind of manager. Then all of the above will not matter. You just end up having a revolving door of no talent hacks claiming to be a mechanic and lose customers.