Although the initial investment is somewhat high, you can start seeing a good return on equipment that you lease out to contractors, businesses, and individuals. Be sure you have adequate space to securely house the equipment, in order to keep it safe from damage due to weather and loss due to theft.
Set up with equipment distributors such as Bobcat and Caterpillar in order to get dealer prices on their equipment. Most dealer agreements involve filling out an application with your business information (business name, address, and tax id) and agreeing to a minimum purchase, either on a one-time or on an annual basis. See Resources below.
Get insurance coverage. Renting equipment means taking on liability if someone gets hurt when using your equipment. Be sure you have adequate insurance coverage.
Write up a lease agreement. Your lease agreement should include a liability waiver as well as the terms of the lease for the specific piece of equipment, such as the price and the rental time and the condition in which the machine must be returned, as well as the charges should any damage occur to the equipment while it is leased out.
Determine leasing rates. The best way to determine rates is to do a little research on comparable businesses in your region. Don't overcharge or you won't be able to attract customers; don't undercut your rates or you won't be able to make a profit.
Hire a technician to maintain the equipment. Your equipment is your profit, so if it is broken and you can't rent it out, you can't make any money. Have a well-stocked shop and a qualified technician in your employ to maintain the equipment and repair any broken equipment.
Build up your inventory. Start with a good selection of popular rented equipment: front-loaders, concrete saws, jackhammers, sandblasters, and stump grinders. Build up your inventory with more options, such as different attachments, and more specialty equipment, such as carpet seam rollers, drywall hoists, and sanders.