Rent and leasing: equipment, vehicles, equipment and real estate

Krympress reports:

In the modern world, business and private individuals are increasingly having to make strategic decisions on the advisability of buying or temporary use of property. Rent and leasing are two most common forms of such use. They allow access to equipment, transport, equipment and real estate without immediate full payment and without the need to purchase an asset in property.

In this material we will figure out what these tools are, what are their differences, advantages and financial benefits, and also — when exactly they are especially relevant.

What is rental and leasing

Rent

Rent is an agreement of temporary use of property for a fee. The owner (lessor) transfer the property to the lessee for a certain period, with the possibility of a refund at the end of the contract. At the same time, the tenant does not become the owner of the property and is not obliged to redeem it.

Rent can be:

• short -term (from several hours to several weeks);
• long -term (from several months to several years);
• With subsequent ransom (rarely, but found in commercial real estate or in fleets).

Leasing

Leasing is a type of financial lease in which property is purchased by a leasing company at the request of the client and transferred to him for a fee. Unlike lease, leasing almost always implies the possibility (or obligation) of the subsequent redemption of property.

There are main types of leasing:

• financial — with the subsequent transfer of ownership of the lessee;
• operational — with a return of property at the end of the term;
• Return — when the owner sells his property of the leasing company and rents it back.

What can be rented or leasing

The most popular objects:

Technique

• Construction (excavators, auto crackers, bulldozers);
• Agricultural (combines, tractors);
• Special (towers, generators, drilling plants).

Motor transport

• Commercial cars and special vehicles;
• Light cars for business and private individuals;
• Buses, minibuses, trucks.

Equipment

• Production and technological (machines, lines, packaging systems);
• Medical (tomographs, x-rays, laboratory devices);
• Office and IT equipment (servers, printers, security systems).

Real estate

• Commercial (offices, warehouses, retail space);
• Production (workshops, hangars, logistics centers);
• Residential (in rare cases — with prolonged rental with a ransom).

Advantages of rental and leasing

Rent and leasing give users a number of advantages that are especially relevant in the conditions of an unstable economy and rapidly changing markets.

Minimization of initial investments

No need to immediately spend large amounts on the purchase — it is enough to pay regular payments.

Reducing the tax burden

In many cases, rental or leasing payments can be taken into account as expenses that reduce the tax base.

Flexibility and scalability

You can easily increase or reduce the volume of equipment, equipment or transport without a difficult sale or conservation of assets.

Lack of service costs

In rent — maintenance most often remains for the lessor. In leasing — you can provide service support.

Fast access to relevant technologies

There is no need to buy obsolete equipment. You can periodically update the park.

When renting or leasing is especially relevant

• Young business or startup — when there is no free capital for the purchase;
• Seasonal business — technique is needed only for a limited period;
• Project activity — when specific equipment is used for the duration of the contract;
• Tax optimization — especially in organizations with a income tax system;
• The uncertainty or instability of demand is when the purchase of assets is associated with high risks.

Financial benefit: is it worth renting or leasing?

The financial effect of renting or leasing depends on several factors:

• the term of use of property;
• lease or leasing rates;
• residual value of the object;
• cost of ownership and maintenance (TCO);
• Tax consequences.

In some cases, especially with a short -term or average period of use, rent and leasing are more profitable than purchases. It also releases working capital and allows business to use them in other, more profitable areas.

Expert comment

Naydenkin Mikhail AlexandrovichExecutive Director of the company «RPNU LISING», comments as follows:

Rent and leasing have become not only convenient, but also a strategically important asset management tool. This is especially true for equipment and equipment, where the high cost of entering property can limit the growth of business. Leasing schemes allow entrepreneurs to focus on the main business without distracting resources to expensive acquisitions, while maintaining property control and access to technological updates.

This approach allows enterprises and private clients to respond to external changes and optimize the structure of capital.

How to choose: rent or leasing?

The choice between rent and leasing depends on the following parameters:

According to experts, renting and leasing are powerful tools for effective management of property and resources. They allow you to reduce costs, accelerate access to the necessary assets and increase business flexibility. At the same time, it is important to consider the specifics of tasks, life and financial model. In the conditions of the modern economy, such forms of use of property become more justified and strategically substantiated — both for companies and individuals.

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