Should You Rent Or Own Your Farming Equipment?

When considering AG services for your farm, it is important to find equipment that works for your needs. However, many pieces of equipment can cost millions of dollars to purchase. If you have the money or the source of loans, it may seem obvious that outright owning your equipment would be the best approach here.

However, the best AG services may not require that you own all of your equipment. In fact, there are many pros to renting that you should consider. That said, renting has many negatives that shouldn't be ignored. The secret lies in identifying the cost and use analysis of both ideas.

Owning Costs More: Usually

Obviously, spending millions of dollars buying farm equipment is a costly expense. When you rent, you typically pay much less than you would if you were buying. However, there is a hidden problem here that can make renting more expensive. For example, some AG services find that renting can often become a spiral of expenses.

How? If you rent certain types of equipment, like a sprayer, you'll also have to rent a nurse truck and a trailer. Farm equipment is designed to work together in this way, making it more difficult to afford renting certain types of equipment. In fact, sellers will often give you deals on bulk equipment to entice you to buy.

Your Cash Flow Is Important Too

How much money are you planning on making with your farm? Will you need the best AG services or can you get away with just renting? These questions are very important to consider. If your farm is smaller operation and one that isn't likely to make a lot of money, renting is the best bet here. Why? It keeps you from getting too far in debt buying expensive equipment.

However, if you plan on being in business in a large way and creating a multi-generation business, buying is a better choice. Good pieces of farm equipment can last over 60-70 years if maintained properly. In these cases, buying is the much better choice because it will provide your children with their own equipment. Make sure you also take your workers' needs into account here, as they won't want to work on old equipment that may fall apart.

So should you buy or rent your farm equipment? As always, the answer here is somewhat tricky. You have to balance a wide range of needs to ensure that you don't make a costly mistake. Try to identify your intentions well before spending a single dime. In this way, you can get into farming without spending too much money mistakenly.