Skid Steer for Side Business?

[Tractorable]

I have a friend and colleague and we work together in the same corporate office for our "real jobs". He owns a Bobcat skid steer, a dump trailer, and an F250.

As a side business, he rents his skid steer and dump trailer to a landscaping company for $50/hr. The landscaping company then charges their customers $100/hr when the machine is used for a job.

The landscaping company sends him a check every month based on how many hours they use the machine. My buddy said he made some pretty good money when it snowed 30 inches here in Virginia when the skid Steer was used non-stop for a week straight clearing snow in the neighborhoods.

What do you guys think of a side gig like this? Could it potentially be profitable just owning the machinery and letting some one else do the work?

Thoughts?

 

[Sysop]

From everything I've seen, running equipment part-time as a side-gig is near impossible. To be able to afford the insurance required to cover your butt and still make anything requires full-time efforts. To rent the stuff out to someone, I'd want to be sure (signed agreement) they're accepting all liability for anything that happens with your equipment.

Beyond that, yes, it can be very profitable. Rental yards, landscapers, and excavation services all seem to do well. In most cases the equipment owner is generally not the one to operate it. Each have their ways of dealing with the liability of things that go wrong. You would want to do the same.

 

[TSO]

Yes but only if you are handy enough to fix it. Things break. I break stuff all the time with my tracked skid steer. Not usually the machine itself, but implements. As long as you can weld and repair things, it can work. It also depends on how the landscaper takes care of the machine...

But the formula works... Making money while not actually doing any work!

 

[bspeedy]

So... for 2000 hours on the skid steer, he will see 100 grand without doing anything. If the landscaping company maintains it and fuels it, that's a super deal. I'm usually a skeptic, but I'd say sign me up for that.

 

[mopardude318]

So... for 2000 hours on the skid steer, he will see 100 grand without doing anything. If the landscaping company maintains it and fuels it, that's a super deal. I'm usually a skeptic, but I'd say sign me up for that.

when ya put it like that...makes me wanna buy a used one and get to work!

 

[LD1]

So... for 2000 hours on the skid steer, he will see 100 grand without doing anything. If the landscaping company maintains it and fuels it, that's a super deal. I'm usually a skeptic, but I'd say sign me up for that.

Unlikely the land scape company is maintaining it, rather just keeping it full of fuel.

Better deal would be put the 2000hrs on it yourself and pocket the full 200k rather than let the landscape company take half of it for simply buying the fuel and paying an operator $15-$20/hr

 

[bspeedy]

Unlikely the land scape company is maintaining it, rather just keeping it full of fuel.

Better deal would be put the 2000hrs on it yourself and pocket the full 200k rather than let the landscape company take half of it for simply buying the fuel and paying an operator $15-$20/hr

Hi, LD1. Maybe I'm lazy. I think 100 grand for doing very little is better than 200 grand for doing all the estimating, hauling, negotiating, hiring, firing, storage, greasing and fueling.

 

[EddieWalker]

If it's too good to be true, RUN AWAY!!! Every rental company that I deal with struggles with keeping their equipment running. I have four in my area. Every landscape company that I know rents their equipment and puts whoever is handy in it, regardless of skill or ability. They laugh at the damage they do, and when they break it, they get upset at the rental company, and blame them for the failure of the equipment. Then they want the day for free, with a replacement to finish the job.

You either need a lot of luck, or very deep pockets to rent anything out.

 

[Steppenwolfe]

If it's too good to be true, RUN AWAY!!! Every rental company that I deal with struggles with keeping their equipment running. I have four in my area. Every landscape company that I know rents their equipment and puts whoever is handy in it, regardless of skill or ability. They laugh at the damage they do, and when they break it, they get upset at the rental company, and blame them for the failure of the equipment. Then they want the day for free, with a replacement to finish the job.

You either need a lot of luck, or very deep pockets to rent anything out.

Agreed... I wouldn't risk my equipment renting it out. Now, if my butt is on it, and I'm being paid, that is another story.

 

[Tomtint]

I have a skidsteer that I use for my own needs. It does not get more than 100 hrs a year and it still has maintence costs that are spendy. .. I once read the maintence cost to run a skid was something like 15.00 per hour. This does not include the cost of the unit itself or any added insurances.

 

[Tractorable]

For the sake of argument, what kind of spendy maintenance would a new skid steer need? Busted implements? New tires/tracks every 300hrs?

 

[Tomtint]

For the sake of argument, what kind of spendy maintenance would a new skid steer need? Busted implements? New tires/tracks every 300hrs?

If memory serves me correctly..tires last about 250 hrs as long as nothing damages them first, that is about 1000.00, tracks about 4-500 hrs depending on terrain and pilot experience.. those are in the $2,000 range. Bucket edges wear quickly on asphalt if moving snow. Figure 200.00 ea. Filters, oil, general maintenance etc add to that expense. .. and then there is the unexpected break downs.

 

[EddieWalker]

Don't forget hydraulic oil and hoses. Granted, a new machine should be fine for the first 1,000 hours, but with abusive use, I'd cut that in half and expect operating costs as a rental to be at least twice what an owner operator would expect.

 

[bspeedy]

Maybe renting to a landscape company is the same as driving for Uber. You're not making money - just trading your machine's equity for cash over time. Net return is next to nothing.

The OP's buddy may have found a landscaping company that makes that particular venture profitable, but it likely is not a good idea for most of us.

 

[4570Man]

I'm guessing there isn't many deals like this. Anyone using a machine enough to pay for it owns it themselves. It's not likely you're going to rent a machine to the same person for 2000 hours.

 

[JDWY]

For the sake of argument, what kind of spendy maintenance would a new skid steer need? Busted implements? New tires/tracks every 300hrs?

For one thing, the abuse factor would probably be off the charts. It's not mine so who cares how I operate it? Bent hydraulic piston rods, overheated hydraulic system, etc. all result in high dollar repairs. I'm a retired heavy truck and equipment mechanic and I could write a book on tearing up equipment. I've known guys who could find a way to break an anvil. And a dealership won't warranty a component if they determine it failed due to abuse.

 

[crashz]

I hate to always be a naysayer and bring this up, but insurance is very important here. If the landscaper hurts someone or damages property, what is the likely-hood of him pointing the finger at the owner of the machine? "The brakes failed, we weren't properly trained, etc." There is a whole lot of things that can go wrong and the owner of the machine is not even onsite.

The machine can be repaired or replaced at a hefty cost, but think of the things beyond that which could be damaged. One fiber optic line and loss of service can drastically eclipse the cost of a new skid-steer.