Trailers rent /lease business

My first trailer I rented for a year and It was a 2012 Great Dane Dryvan in decent shape. It was $400 per month, only reason I gave it back was it was a rental but I imagine rent-to-own would be much more.
You can check out K&L Trailers out of Knoxville, TN. They have great trailers for rent-to-own.

 

You're more than paying for their payment cost plus at the end they still have a trailer worth money . They might not make a huge profit on each trailer due to overhead cost but the huge profit is usually in the volume

Volume is where it's at . I remember working for a company where the owner only took home 3 cpm profit but do the math ; 1200 trucks x 120,000 avg miles per year per truck . This company was able to pull freight for under $1.00 per mile while paying new drivers a low wage and the owner taking home $$ millions . That's not including brokering freight , lease op programs , etc

 

I'm not a financial guy by any means but in my opinion a lot the smaller companies that make lots of profit with minimal equipment are straight up ripping off the drivers .

There are lots of Chicago land outfits that do this . They rent/lease you a truck and trailer . The trailer's only $150 per week on paper but they play with other costs to keep profits super high (invoice %,double brokering insurance rates,maint account,Eld rentals,book keeping/payroll,etc )

I believe in Capitalism if someone wants to pay you , fine . That's why it's hard for me to get mad at these types of outfits when people are waiting in line to sign up

 

If you went to an auction and got 2 decent dryvans for $30k total and rented them to 2 people for $500 per month, it would take 2.5 years to get your money back in value.

In the back of your mind your thinking yea I'm gonna get 2 people off the street and there gonna rent my dryvans for 2.5 years straight. Good luck, Most drivers can't make it 6 months without quitting, wrecking, or just plain giving up.

 

Buy a trailer for $30k for cash. Lease it out for $500/month, a year at a time. You also get $500/month in depreciation, so you're not paying any income taxes on the $6000 annual rental income.

Or, buy 3 good used trailers at $30k apiece by putting up $30k and borrowing $60k for 5 years at 9%. You'd make a little over $3k a year plus $18k in depreciation tax writeoffs per year. You will own 3 trailers free and clear in 5 years, and they'll still have some life left in them. After 5 years you'd be taking in $18k a year without the bank payments.

Any other expenses, like repairs, licensing, insurance, etc will give you additional write-offs against other income. Part of your deal could be that the party renting your trailer pays for insurance, or licensing, whatever. Talk to your accountant.

The key is that they are bringing in $$ every single month, or you're on the hook for that months payment.

 

I guess everyone looks at it different. I already owned a trailer that sat for a good while and people would have leased it but I wouldn’t do it. I just didn’t want it tore up when I needed it again. Personally I don’t think with leasing one trailer it would ever work. If a guy quits pulling it and you have to find a new guy, the couple months it sits takes care of any money you’ve made off it.

Plus if the driver goes out of business 500 miles away, guess who gets to go find the trailer. People quit jobs all the time and leave the truck parked wherever. They would definitely leave a leased trailer behind if going out of business.

 

Sometimes they are never recovered. I have a 53' with no ID that was dropped in our yard over a year ago.

No clue where it came from or who owns it but I would bet they are looking for it.....

 

Dry vans are roughly $15k for a solid Wabash Duraplate with good tires (2013). Install a 3yr battery life gps tracker in the wall.

Rent trailer for $750 (in my area that’s considered cheap).

Trailer paid off in little over year and a half. After this it’s all income for next year and a half, let’s say the remaining 16 months, $12,000. Then you can sell the trailer for $10,000 (2010 trailers go for more sometimes).

Your $15k investment turns to $37,000 gross, $22,000 net. Assume you need to buy tires once that’s still a really good profit margin.

1. Get gps tracker on it
2. Get a contract
3. Get a deposit

Is it risky? Sure. But investing money always has some risk involved.