Losing rental equipment costs money, time, and stress for you to deal with. Renting in general involves risk, but equipment in particular is prone to return with damage or to not return at all. To mitigate these risks, here are a few tips when renting out your equipment!
Require Security Deposits
One of the best ways to deter loss on your equipment is to charge a preemptive percentage of the item’s cost. With a security deposit required, renters are much less likely to use your equipment roughly or without thought if it means losing that money in return. The percentage you pick from the gross total is dependent on your type of equipment. For heavy car rentals, for instance, at least a 15 percent security deposit is a good idea. You will also have less net loss if, by some chance, the renter steals the item, or it otherwise ends up being unretrievable.
Create a Plan for Repossession
A repossession of assets is the term to describe taking back your property when the renter or borrower hasn’t paid, or hasn’t returned the item by the agreed upon time. There have been many innovations in repossession technology that help companies recover assets beyond just going to a person’s property. The most popular is LPR or license plate recognition from street cameras. Geolocation is another piece of technology that helps in this endeavor, with a stamp being included in updates from repossession vendors as they go about finding the property. There are also multiple types of software that help your company to keep track of borrower status and get updates on repossession.
Draft an Equipment Rental Agreement
To legitimize any exchange between you and a renter, it needs to be official and in writing. A well-drafted equipment rental agreement will include all of the basic information of both parties, as well as specifics on costs and the duration of the equipment lending. This is where you can include things like the security deposit or the plan for repossession, as well as other helpful risk mitigations like late fees and repair costs. Overall, make sure your agreement doesn’t have loopholes and still includes a variety of situations that may arise and adds conditions that will cover the full cost of the rental.
Renting equipment can be a risky business without precautions. For that reason, be frank and upfront about your conditions, in person and in writing. Making sure you’ve covered all of your bases will help you to continue as a business and not suffer financial loss.
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