Next, you want to look at utilization. Count the days, including partial days, that you use this type of equipment in a month. Divide by the number of workdays in a month. A general rule of thumb is that equipment that is used less than half the time is a candidate for renting. So, if you only use the equipment about that much or a little more, your costs of renting will start to approach or fall below the costs of ownership. But these are rough guidelines – to really calculate the costs, compare the total cost of ownership to your rental store's rates. Note that Home Hardware Rental stores offer discounts for longer-term rentals. Renting for a week costs about the same as renting for four days and renting for a month costs about the same as renting for three weeks. With a little organization to keep equipment on the jobsite for an extended period of time, you could take advantage of this to change your calculation.
Remember, that borrowing to finance equipment purchases will tie up your credit to some extent. Also, look at the tax implications of claiming depreciation and leasing costs versus the effects of using rental charges to lower your operation's revenue.