In life there are situations when you keep doing something wrong until the time you realize your mistake. Have you been banking upon some great modern farm equipment like tractor flail mowers, log splitters and more? That is a great sign of progress. But what kind of relationship you have with the equipment you use makes a significant difference.
Buying modern agri machinery versus leasing it has different opinions in their favor and against. Farm owners who are involved in crop production should be always keen to increase their economic efficiency as this is paramount to profitability.
How Buying The Farm Machinery is More Beneficial?
The whole business of agriculture is not only long but also requires a lot of labor. With latest machinery like wood chippers tractor driven you can minimize the time spent on completing particular tasks. While leasing companies buy the machinery for earning fat profits. They save on tax by their act and lease out these equipment as they must be used for agricultural production.
Land owners who opt for leasing think that they are saving some money but if you see it from a long term perspective it is a loss. You could have owned the same equipment you are leasing over the years. It is true that it seems to be a good option to lease the machines when you need them for short term use. But why don’t you think big?
Instead of paying the leasing company you can earn money from the smaller and needy landowners for leasing out the equipment.
If you purchase the equipment it will be your own choice to replace or sell out the same. By owning equipment you cannot only have increased asset value on balance sheet but can also use them as collateral against other loans. Leased equipment does not add asset value. You can purchase farm equipment without any security deposits. Stop using the equipment according to the convenience of the leasing specifications. Feel free to use it on any day and hour without a fear of getting a penalty imposed on you.
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