10/23/18. It should come as no surprise that Irontrax was recently engaged to appraise the equipment of one of the nation’s top ten largest equipment rental companies. The heavy construction equipment that we rely on to maintain our infrastructure does not come cheap, and more & more contractors are choosing to Rent versus Buy. The American Rental Association expects the U.S. equipment rental industry to continue to grow consistently over the next five years, resulting in total revenue of $60 billion by 2021. Total revenue for 2018 is forecasted to reach $51.5 billion, with increases of 5.6 percent, 5.0 percent, and 4.5 percent forecasted for 2019, 2020, and 2021, respectively.
According to Irontrax President & Founder Joe Santora, projects with equipment rental companies are a natural progression for Irontrax. “The Tax Cuts and Jobs Act that went into effect earlier this year is a major factor in the expanding demand for rental equipment. Renting equipment has many positive benefits. Contractors can avoid acquiring expensive equipment in times where job backlogs are short, or while interest rates are climbing.” Joe added, “Businesses that rent equipment save on storage and maintenance costs, which are considerable. Many rentals come with maintenance contracts, or the period of the rental may be short enough for the maintenance not to be a consideration.”
At Irontrax, we understand the Equipment Rental Industry. We also recognize that there will be challenges out there, despite growth forecasts. The Associated General Contractors of America recently released a study showing that the cost of goods used for construction increased in April at the fastest year-over-year rate since 2011. The cost of diesel fuel has jumped nearly 42 percent. A measure of all materials used in construction showed a 6.4-percent increase, but the prices of completed projects have only raised 4 percent. The result of this means contractors either reduce their profit margins, or in some cases, walk away from projects. Neither result will benefit rental companies. Just like traditional buyers, rental companies are waiting much longer for deliveries of equipment. And, some manufacturers are raising the cost of equipment because of higher materials costs, or citing issues with tariffs.
Don’t trust an inexperienced appraisal firm with your rental equipment! Contact an Irontrax rental equipment expert today.