Foreclosure Cleanup Business Advice: Inside Info on Renting vs. Buying Equipment

In a foreclosure cleanup business, you can offer a variety of services. This is a good thing for two reasons: (i) because it allows you to have multiple streams of income; and (ii) you can offer as many or as few services as you want.

Foreclosure Cleaning: The Services Offered Often Dictate the Equipment Needed

For example, you can offer trashouts and exterior property services, eg, lawn maintenance, gutter cleaning, pressure washing, etc. Or, you may focus on the interior, eg, white glove cleaning, interior repairs, carpet and floor cleaning, etc. The bottom line is, how you structure your foreclosure cleaning services is up to you.

However, for the most part, the services your foreclosure cleanup business will offer will be determined by the equipment needed to complete the job at hand. Hence, knowing how much equipment costs are – whether it’s renting or buying – is crucial.

Should You Wait to Purchase Equipment for Your Foreclosure Cleaning Business?

The simple answer is, yes, especially if you are completely new to the industry and don’t have a lot of startup capital. And, the equipment you do decide to buy doesn’t have to be brand new.

On places like Craigslist.com and Backpage.com, you can pick up a lot of used equipment for your foreclosure cleaning business, especially as some many people are losing their homes these days and are downsizing.

But if you have absolutely no money to start with, only offer those services for which you have the equipment right in your garage or in your cleaning cabinets.

Everyone has cleaning supplies . . . because they have to clean their own homes. And, if you live in the suburbs, you probably have a lawn mower. So right there you have everything you need to offer simple lawn maintenance and a good, simple cleaning. And, this is all most banks/lenders want when they hire a home to be trashed out/cleaned.

When Renting Equipment for Your Foreclosure Cleaning Business is a Good Idea

Following are some guidelines to keep in mind when it comes to accepting jobs for which you don’t have the money to outright buy the equipment, in which case you’ll rent it. If you get a job that:

(i) you know you can do;

(ii) that you will make a good money off of;

(iii) that can easily cover the cost of renting the equipment;

(iv) where it would “hurt” you not to take the job (eg, the client is unlikely to call on you again if they feel that you can’t handle most of their job requests); and

(v) that you will be paid for relatively quickly;

THEN, you should take the job and rent the equipment.

For example, let’s say a bank wants to hire you to remove trash and debris, mow the lawn and pressure wash the property.

You can handle the trashout and mowing the lawn with no problem. But, you don’t have a pressure washer. Well, large home improvement stores like Home Depot rent this type of equipment relatively cheaply by the hour, day, week, etc.

You can rent a pressure washer in most cases for under $50 a day. If you’re charging the client $$200 to $300, it’s worth it for you to take this job and shell out the cash up front to rent the pressure washer.  

Your profit easily exceeds your cash outlay, so you should be good – even if the client takes 30 days or more to pay.

Just be sure you don’t make a habit of stretching yourself too thin financially. This was a relatively inexpensive equipment rental fee. Not all pan out like this and you can find yourself in dire financial straits if you’re not careful. If you keep the guidelines outlined here in mind, you should be fine.

Warning: The “Emotions” of Spending On New Tools and Equipment

As a long-time business owner, you’re just going to have to trust me on the following:

When you first open your foreclosure cleaning business, it’s tempting to spend, spend, spend initially on all the things you “need” to get your business up and going.  The word need is in quotation marks because rarely do you need everything that you think you do.

But a business is like a new baby. You want it to have the best, so you go out and get all the bells and whistles you think it’s going to need. Before you know it, you’re in a spending frenzy. And, you will even justify it to yourself, even when you feel in the pit of your stomach that you’ve gone over board.  

It’s easy to understand, after all, you’re “starting a business gosh darnit!”

Rein yourself in though and rent equipment, especially big -ticket items, before buying. As mentioned above, large home improvement stores like Home Depot rent everything from tools to heavy equipment to generators to actual trucks.

With options like this, your foreclosure cleaning business may never need to actually buy equipment.

Foreclosure Cleanup Business Owners: Why Waiting to Purchase Equipment Is Smart

Waiting to purchase equipment is a good idea for two reasons:

(i) it will truly allow you to grow only as fast as your new business’ finances can afford; and

(ii) it will give you a chance to see which services are really taking off in your geographic area before you invest precious capital in equipment you may not use that much.

Beware of Overspending!

Golden Tip: Careful not to enter the store and spend anticipated profits on items you know you already have at home/your office, but you simply don’t want to go back to get, eg, gloves, rope, tarp, putty knives, etc.

On more than one occasion, one foreclosure cleaning business owner reports, she’s spent $50 on what should have been a $25 (at most)  trip on miscellaneous supplies like this. And, all because she failed to properly plan and pack for the job at hand.

Foreclosure Cleaning Sample Tool & Equipment Rental Rates

Get an idea of what equipment rental rates for your foreclosure cleanup business may run. This list (which may take a moment to load) is from a home depot-type store in Atlanta. These rates may vary according to geography. Some of the tools and equipment this list can be rented by the hour, by day, week or month.  

Getting an idea of what to expect when you rent equipment for your foreclosure cleaning business will give you a leg up in pricing jobs. Following are some common equipment rental costs:  

–Pressure Washer: Rent $46 (four hours)

–Fiberglass Extension Ladder, 28′: Rent $25 (four hours)

–Tow N Go Trailer, 5×8: Rent $24 (full day)

Want to know how much it costs to rent equipment for your foreclosure cleanup business? Pop into a Home Depot in your area and go to their rental department and get a price sheet.

P.P.S.: Like this post? Follow Foreclosure Business News on Twitter.

Copyright © 2010 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.