Seeking advice on supplying (leasing) a dump trailer under someone else's authority

Discussion in 'Trucker Taxes and Truck Financing' started by sugardoo, Mar 21, 2013.

  1. sugardoo

    sugardoo Bobtail Member

    18
    1
    Oct 30, 2012
    Austin, TX
    0
    Hi,
    I am hoping an owner op in the dump business can give me some advice. I am interested in purchasing a trailer (belly or end dump) and then leasing it out to someone who has a small company and runs trucks under their authority. I was thinking about simply renting out the trailer to an individual owner op but the rental rates here in Texas are $800-$1200. Its my understanding that I can lease out the trailer under someone's authority and get 10-15% gross earnings instead. Obviously, I'm interested in maximizing return on investment.
    Is this true and feasible? I'll somehow need proof of driver's gross earnings. I'll need to figure out how maintenance and repairs are handled and what costs/fees I'll be responsible for and which ones the driver would take care of.
    Thanks!
     
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  3. Calspring

    Calspring Light Load Member

    290
    144
    Jun 22, 2012
    Canada
    0
    I don't know who would pay you 10-15% of gross for a trailer rental. The only rentals I have seen are a per day rate or a per mile rate or a combination of the two.

    You need to start with your purchase price, expected service life, repairs, finance costs if any, determine a realistic amount of time that it will be rented per year or month. From there you can determine what your costs will be and can calculate a suitable return.

    I have never rented a trailer myself so can't be of any help in that department.

    The biggest issues I see with a percentage is why as a driver should I be giving my detailed revenue information to an unrelated third party. I would walk out the door if you asked for it. Second is you have no influence over what the driver hauls or how much hauls. You will make nothing if he is scraping by on $1.00 a mile freight.
     
    botoler Thanks this.
  4. Foxcover

    Foxcover Medium Load Member

    413
    217
    Nov 22, 2011
    Dallas, TX
    0
    That is a good idea but given your position I think you would be very lucky to make it work!
    We supply dump trailers to our oo/subs but most want to pull their own.
    The rate we charge is 25% and if the oo/sub has been with us more than 6 months and proves to be very competent then we drop it down to 20%.
    I know that sounds like a lot but don't forget it's not just a rental, we actually supply the work too.
    Usually pays between $90 to $125 per hour. Some jobs we work by the load which usually pays 10 to 15% more than hourly. An oo/sub with their own trailer gets 92.5% of rate plus tolls etc.
    We have to bid the work, estimate, pre bid meetings, job walk, estimate some more is a lot of man and office hours, (from time of notice to bid, to actually working trucks is usually 6 months to a year) then we must make sure the money flows and so on.
    Brokering construction work is a lot less profitable than brokering freight, if you consider with freight there is a lot less estimating, hassle and its so easy to get paid in comparison (don't have to wait nearly as long) but if you haul for the big carriers they typically keep at least 20% of the line haul and you pay them monthly trailer rent too!

    Anyway best of luck whatever way you go.
     
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