Foreclosure Cleanup Business: Renting vs. Buying Equipment for Your Business
Which Makes More Sense -- Renting or Buying in the Start-up Phase of Your Business?
In a foreclosure cleaning business / REO trashout business, you can offer a potpourri of services. You can start out offering just a few, or you can offer services that run the gamut. The services you choose to offer will dictate the initial equipment you will need to start your business.
Services Offered will Dictate Equipment Needed
For example, you can offer just lawn care and debris removal, or you can offer full trash-outs and interior cleaning. You may want to simply focus on painting, gutter cleaning, pressure washing, and winterization, or you can delve into window boarding, lock changing and overall property securing duties. If you are skilled in carpentry, you may opt to add sheetrock and repair work.
A foreclosure cleanup business / REO trashout business is one that allows you tons of leeway in structuring a company that will fit you, how you want to work, how fast you want to grow, how much money you want to make, and how much you want to outlay on equipment, initially.
Wait to Purchase?
Depending on the services you ultimately choose to offer when you first start your foreclosure cleaning business / REO trashout business, you may NOT want to run out and buy all new equipment. It may be smarter to simply start with what you have at home in the garage and rent equipment until your business can afford to pay for the equipment outright.
This "wait to purchase" period will do two things: 1) it will truly allow you to grow only as fast as your new business' wallet will allow you to grow; and, 2) it will give you a chance to see which services are really taking off in your geographic area before you invest needed marketing dollars in equipment you may only use one or two times.
Warning: The "Emotions" of Spending On New Tools and Equipment
If you have a certain amount set aside to start your business, it may be tempting to spend, spend, spend initially. This buying frenzy will make you feel like you're really moving in starting your business. You may begin to associate (and ultimately justify) the spending because you are, after all, "starting a business."
Guilty! I have gotten caught up in the emotions of spending when starting a business or new project on more than one occasion. Reign yourself in and consider renting necessary big-ticket equipment before buying. The larger home depot-type stores offer tool and equipment rental. They rent everything from carpet kickers to generators and beyond. These depots also rent trailers and trucks for hauling.
Golden Tip: Careful not to enter the store and spend anticipated profits on items you know you have at home, but don't want to turn back to get -- unless you have priced the job to cover these new items -- for example, gloves, rope, tarp, putty knives, etc. On more than one occasion, what should have been a $26 trip to pick up a trailer from Home Depot turned into a $50 trip for me because I neglected to plan a job and throw necessary items into the truck before I left home-base for the work site.
Plan your jobs ahead of time and have needed items all packed and in the truck before you stop at the home supply store to prevent unnecessary spending.
Equipment Purchase Decisions Will Vary
In certain scenarios, it may be necessary to buy instead of renting, but really weigh purchases carefully, especially in the start-up phase. A new shiny truck will look great; but that Ford in the backyard will haul just the same.
Sample Tool & Equipment Rental Prices
Click HERE for some sample tool and equipment rental prices from a home supplies-type store. (Note: The link is a PDF and may take a bit long to load for some.) Some of the tools and equipment on the list profiled can be rented in 4-hour slots, or on a daily, weekly or monthly basis. Here are some other sample prices on common items you will need:
--Pressure Washer: Rent $46 (four hours)
--Fiberglass Extension Ladder, 28': Rent $25 (four hours)
--Tow N Go Trailer, 5x8: Rent $24 (full day)
The sample pricing will assist you in pricing your jobs effectively when starting out with rental equipment. Keep in mind different areas of the country may have different rental pricing, so stop by a home supplies type store in your area and pick up their rental price sheet.
Good luck with your foreclosure cleanup business / REO trashout business!
NOTE: Throughout the internet and in real estate industry literature, you may see the terms or names mortgage field services, property preservation business, foreclosure cleanup, foreclosure cleaning, foreclosure clean-outs, foreclosure clean, clean foreclosures, cleaning foreclosures, REO trashout, REO trashouts and field services used interchangeable. The main thing to remember is foreclosure cleaning and foreclosure cleanup generally refer to smaller entities; while property preservation generally refers to larger entities/businesses.