Hey there, fellow homesteaders and DIY enthusiasts! Sandy here, and today we're diving into a topic that's close to my heart: the real costs of owning heavy equipment. Over the last 10 years I've learned a thing or two about the true price of running and owning these big toys, and I'm here to share that knowledge with you in this post.
The Allure of Heavy Equipment
There's something undeniably appealing about having your own excavator, skid steer, or tractor sitting in the yard. The freedom to tackle big projects whenever you want, the satisfaction of moving earth with the flick of a joystick – it's intoxicating. But before you start browsing auction sites or calling up equipment dealers, let's break down what it really means to own these machines.
Initial Costs: More Than Just the Sticker Price
When you're looking at buying heavy equipment, the purchase price is just the tip of the iceberg. Here's what you need to consider:
- Purchase price: This is the obvious one, but remember, prices can vary wildly depending on whether you're buying new, used, or at auction.
- Delivery fees: Unless you've got a way to transport a 10-ton machine, you'll need to factor in delivery costs.
- Sales tax: Don't forget about Uncle Sam's cut – sales tax can add a significant chunk to your total.
- Financing costs: If you're not paying cash (and let's be real, most of us aren't), you'll need to factor in interest on your equipment loan.
For example, when I bought my first skid steer, the sticker price was $25,000. But after taxes, delivery, and financing, my actual cost was closer to $30,000. That's a 20% increase right off the bat!
Ongoing Costs: The Hidden Budget Busters
Alright, so you've got your shiny new (or gently used) piece of equipment home. Now the real fun begins. Here are the ongoing costs you need to budget for:
1. Fuel
Heavy equipment is thirsty, folks. My excavator can easily burn through 5 gallons of diesel in a day of heavy use. At current prices, that's about $20-25 per day of operation. It adds up fast.
2. Maintenance
Regular maintenance is crucial to keep your equipment running smoothly. This includes:
- Oil changes
- Filter replacements
- Greasing moving parts
- Tire or track maintenance
I budget about 5-10% of my equipment's purchase price for annual maintenance. For a $25,000 machine, that's $1,250-$2,500 per year.
3. Repairs
Even with regular maintenance, things break. And when they do, it's rarely cheap. A major hydraulic repair on my excavator set me back $3,000 last year. Ouch.
4. Insurance
Don't forget to insure your equipment. Depending on the value and type of machine, this can run anywhere from $500 to $2,000 per year.
5. Storage
You'll need a place to keep your equipment protected from the elements. If you don't have existing shelter, factor in the cost of building or renting storage space.
The Real Cost of Ownership
Let's put it all together with a real-world example. Say you buy a used skid steer for $25,000:
- Initial cost (including taxes and delivery): $30,000
- Annual fuel cost (50 hours of use): $500
- Annual maintenance: $1,500
- Annual insurance: $750
- Average annual repairs: $1,000
Over five years, your total cost of ownership would be about $47,750, or $9,550 per year. That's assuming nothing major breaks!
Check out this video where
Now, if you're considering a sawmill specifically, I've actually created a detailed video breaking down the costs of owning one. Check it out for an in-depth look at sawmill ownership expenses:
Renting vs. Owning: The Great Debate
Now, I'm a big fan of owning equipment, but I'll be the first to admit it's not always the smartest financial move. Let's compare owning to renting for our skid steer example:
- Rental cost: $250/day or $1,000/week
- If you use the machine for 10 weeks a year: $10,000 annual rental cost
In this scenario, renting actually comes out slightly ahead in terms of pure cost. Plus, you don't have to worry about maintenance, repairs, or storage.
So when does owning make sense? Here are a few scenarios:
- You use the equipment frequently (more than 10-12 weeks a year)
- You need immediate access to equipment for time-sensitive projects
- You're in a remote area where rentals aren't readily available
- You have the skills to perform your own maintenance and repairs
Resale Value: The Silver Lining
Now, it's not all doom and gloom when it comes to owning equipment. One of the bright spots is that well-maintained heavy equipment can hold its value remarkably well. In some cases, you might even see your equipment appreciate in value. Here's how:
1. Choose the Right Brands
Stick with well-known, reputable brands like Caterpillar, John Deere, or Kubota. These machines tend to hold their value better than lesser-known brands.
2. Maintain Religiously
Keep detailed maintenance records and follow the manufacturer's recommended service schedule. A well-maintained machine with documentation will always fetch a higher price.
3. Store Properly
Protect your equipment from the elements. Sun, rain, and snow can all take their toll. A machine that's been stored under cover will look and perform better years down the line.
4. Make Smart Upgrades
Strategic upgrades can actually increase your equipment's value. For example, adding a hydraulic quick coupler to an excavator or upgrading to a high-flow hydraulic system on a skid steer can make your machine more desirable to future buyers.
5. Buy Low, Sell High
Keep an eye on market trends. If you can buy when demand is low (like during an economic downturn) and sell when it's high, you might even turn a profit.
I've personally seen this play out. I bought a used compact tractor for $12,000 five years ago. After using it regularly, maintaining it meticulously, and adding a few choice attachments, I was able to sell it for $15,000. Not a bad return on investment!
Tips for Smart Equipment Ownership
If you've decided that owning is the right choice for you, here are some tips to make the most of your investment:
1. Learn Basic Maintenance
The more maintenance you can do yourself, the more money you'll save. Learn to change oils and filters, grease fittings, and perform basic repairs. YouTube is a goldmine for DIY equipment maintenance tutorials.
2. Build Relationships with Local Mechanics
For repairs beyond your skill level, having a good relationship with a local equipment mechanic can be a lifesaver. They might even be willing to teach you some tricks of the trade.
3. Buy Used (Wisely)
Let someone else take the initial depreciation hit. But be smart about it – always inspect used equipment thoroughly or bring along someone who knows what to look for.
4. Consider Versatility
When choosing equipment, think about versatility. A tractor with a front-end loader and a variety of attachments might be able to handle jobs that would otherwise require several different machines.
5. Plan for Downtime
Remember that equipment will need maintenance and occasionally break down. Plan your projects accordingly and have a backup plan (like knowing where to rent in a pinch).
The Bottom Line
Owning heavy equipment can be incredibly rewarding for homesteaders and DIY enthusiasts. There's nothing quite like the feeling of tackling a big project with your own machine. But it's crucial to go into equipment ownership with your eyes wide open.
Understanding the true costs of ownership – both financial and in terms of time and effort – will help you make smarter decisions about whether to buy, what to buy, and how to manage your equipment over the long haul.
Remember, the goal is to have equipment that serves you, not the other way around. If you find yourself spending more time and money maintaining your machines than actually using them for productive work, it might be time to reevaluate your approach.
At the end of the day, whether you choose to own or rent, the most important thing is that you're able to get your work done efficiently and enjoyably. Because that's what homesteading is all about – the satisfaction of doing it yourself and creating something with your own two hands (and maybe a little help from some heavy machinery).
Until next time, keep those engines running smooth and your projects moving forward. Happy homesteading!