Winter weather on a farm or ranch is a much different experience than in a city or town. As a homesteader, there are preparations for the upcoming rain, snow and freezing temperatures that need your attention. One of these preparations will be your current farming equipment and whether you should replace it before winter arrives.
Should I Rent Farm Equipment?
If you need equipment for a short period of time, whether it be a tractor or skid steer, renting is always an option. Renting gives you a lot of flexibility in terms of equipment you may need to harvest in the Spring. What you will need also depends on your typical crop yield, along with what types of crops you are growing.
In terms of financials, a short-term rental is also more friendly to your pocketbook. Why? Because it costs less than leasing or buying equipment. Moreso, maintenance is handled by the dealer, which also saves you money. However, you also don’t get to claim depreciation on your taxes if you rent equipment.
What About Leasing Farming Equipment?
Reflecting on the past needs of your homestead, your plans for the future and your financial earnings of the harvest season, you can determine whether you buy, lease or rent your machinery. If you plan on working through the winter, leasing your equipment will not only prove affordable, but makes sense from a storage standpoint as well. Rather than storing equipment you only use a few times a year, renting when you need it might be a more cost-effective choice.
Leasing equipment is often fully tax-deductible as a business expense, which saves your year-end tax savings from depreciation. It’s a valuable option that keeps you from paying high upfront costs on the equipment. It also frees you from paying for expensive maintenance costs. Whether through an accident or normal wear and tear, the company from which you lease the equipment handles the repair and maintenance charges.
Why Buy Farming Equipment?
If you are shopping for a multi-season piece of equipment, buying will serve you well in the long term, as leasing can end up being more expensive over time. During the late fall, a lot of dealers and manufacturers begin offering discounts and sales on new or used equipment. They do this to make room for newer or updated pieces of machinery for the upcoming year. Also, when you own your equipment, you have the option of reselling anything that no longer fits your needs.
Consider your financial situation, your budget and the current economic climate. If you know you need new equipment for winter or next year, buying it early may be a better financial option. On the other hand, renting your equipment can guarantee you have the newest model of the machinery to use.
Finally, there’s the issue of storage and additional costs. By waiting until after you conclude your fall harvest operations and sales, you’ll be able to evaluate whether or not you have room to keep all your equipment. You may not be able to hold the machinery you need in storage all year. This means leasing or renting may be your only option. If you have the space for it without compromising your needs for the year, purchasing new or used equipment will be a better option.
Whether it’s seasonal weather, the national economy or tax advantages, professional homesteaders need to take advantage of as many factors as possible. Keep this advice in mind for a better experience this winter.