Leasing refers to an owner, or lessor, selling use of his property
(equipment, automobile, home, or business) to a lessee. For many
individuals, leasing is a good alternative to buying because leasing
requires less equity and, therefore, more people have the
qualifications to lease than to buy. For example, a $1 million piece of
property may be too expensive for a business to purchase, so they lease
it for $5,000 per month, which they are able to do with the profits
they make.
Having the latest high-tech equipment is crucial for an IT company, so
they may lease the best computers and have a continuing upgrade in
their contract. This is much more cost-effective than regularly having
to purchase the latest model, especially because computers are
constantly being improved upon and the older ones become obsolete in no
time.
Many other types of equipment, such as those used in construction,
entertainment, weddings, and offices are typically leased to the user.
Bulldozers, loaders, graders, and cranes are just some of the equipment
needed when constructing a new building. If the building owner bought
these items for the temporary use needed, he would spend hundreds of
thousands of dollars needlessly. By leasing the machines, he is paying
less and also being guaranteed service, repair, and maintenance on
them.
Equipment rentals are a big part of the entertainment industry, from a
child’s birthday party to huge corporate events. Many parents lease
massive waterslides, cotton candy machines, and “moon walks” to enhance
their child’s party. Corporations trying to impress clients host big
blowouts complete with extravagant light shows, live broadcasts, and
other huge presentations, all requiring leased equipment.
Weddings and bat/bar mitzvahs are other big sources of leasing needs.
These events often require large amounts of silverware, linens, tables
and chairs. Some even opt to have huge tents erected for their event,
another leased product. A wedding typically has five or more vendors,
all providing various leased services, such as catering, supplies, and
music for the event.
Business offices must supply their workers with adequate equipment
required to produce a huge amount of paperwork and computer files.
Machines such as computers, printers, scanners, copiers, and fax
machines are often leased because the lease contract provides the
lessee with service and maintenance. Many contracts also include
supplies, upgrades, and installation, all of which would be too
expensive to buy individually. Leasing is much more cost-effective than
buying in many of these situations.
Another item that is frequently leased is the automobile. There is a
lot of debate over whether it is better to lease or buy a car. On the
one hand, the lessee gets the best years of the automobile’s life at a
slightly discounted price. But, of course, the buyer is able to sell
the car at the end of its run, unlike the lessee, who must return it to
the owner for no monetary return.
Homes, such as houses, mobile homes, and apartments, are very often
leased. This is a great option for a person who is trying to save money
for a down payment on a home. It is also a good way for homeowners to
profit without selling their property. Many people make their entire
earnings from the process of buying dilapidated homes, refurbishing
them, and leasing them as homes to others.
Business leasing works similarly to home leasing. A person or company
will buy a strip mall and lease each of the storefronts to different
businesses, focusing on what sort of businesses will do well in the
community and offering a variety of services on the property. The
business owner would rather lease the store than buy it, because it is
less expensive and the landlord will handle all service and maintenance
of the building.
