To Buy or To Lease Gym Equipment? That is the question…

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  • To Buy or To Lease Gym Equipment? That is the question…

In deciding whether to buy or lease exercise equipment for your gym, you need to consider your situation.  There are pros and cons to both approaches, depending on the amount of capital you have available and your tax situation.

Regular Equipment ReplacementShakespeare at a computer

One of the biggest benefits to leasing, apart from the obvious lower amount of capital outlay required, is that you can change out your equipment every few years.  Having brand new equipment is definitely a plus when it comes to customer satisfaction, and they’ll think you’ve spent a fortune.  You should have lower maintenance costs and less equipment down time as well, if you choose your manufacturer and vendor wisely.

Tax Considerations

Your lease payments can generally be deducted on your tax return as business expenses, which will reduce the overall net cost of your lease.  On the other hand, you can deduct the cost of your newly purchased equipment up to $500,000 in the first year.  You need to consult with a tax accountant to decide which option would be more beneficial for your particular situation.

Financing Considerations

Leases are easier to obtain and give you more flexible terms than equipment loans, which can be a significant advantage if you have poor credit or need a longer payment plan.  You may be stuck with a lease, however, or pay high penalties if your gym should fail and you no longer need the equipment.  You’ll also be stuck paying off purchased equipment, but at least you can sell it.

Higher Overall Cost

Leasing equipment is always more expensive than purchasing it, in the long run.  Those more flexible terms do come with a price.  Also, you never build any equity in the equipment.  If you choose to purchase your gym equipment, eventually you own it, and it can be a significant part of the asset, should you decide to sell your facility.  On the other hand, accounting for wear and tear as time goes by, the equipment may not be worth all that much.

Considering the high cost of opening a gym, and the need for extensive financing, for most new gym owners leasing is the way to go.  Unless you have a really big need for a tax break this year, it’s probably better not to saddle yourself with an investment in equipment that will eventually break down and become obsolete.  Leasing equipment allows you to always have the latest and greatest for your customers, without all the maintenance headaches.

A workable compromise might be to purchase free weights, benches and fixed equipment, and then lease all the stuff with the moving parts that tends to break down more easily!

What has been your experience?

15 Comments

Grace
June 28, 2013 / Reply

Lawrence, i believe you have stated the good points when it comes to leasing equipment and in this case fitness equipment. Most business owners nowadays have the option to consider leasing equipment versus buying it. There are after all huge long term benefits like a better management of cash flow. I think it would be wise to chose wisely the kind of leasing companies. They have to be reputable and genuinely offer real value to its customers. In the end, its really dependent on the kind of industry or business you are in…its really a question to buy or to lease in the end.

LeaseQ
August 5, 2013 / Reply

To buy or to lease gym equipment? This is indeed a great question. Thanks for sharing this post to us. This will really help business owners in deciding whether to buy or lease exercise equipment for their gym. Also the pros and cons to both approaches, depending on the amount of capital they have available and their tax situation.

Deborah D. Robinson
August 21, 2013 / Reply

Fitness supplies renting permits the long or fleeting rental of workout gear as an elective, or an antecedent, to buy. Renting offers various profits. A lease settles the starting cost of speculation in fitness gear, which permits to utilize and own workout equipment that they are unable to afford. While fitness supplies renting can take less in the short term but long-term costs may surpass the value of the gear.

Rico Gallarza
June 8, 2014 / Reply

We rent fitness equipment on a month to month basis with only a six month minimum. Our packages include: Free Maintenance, service, repair, and/or replacement for the life of your Rental. Contact me and I’ll be more than happy to speak with you.

Best Regards,

Rico C. Gallarza
National Director
Global Fitness, Inc.

Shoshana
June 14, 2014 / Reply

@Rico Gallarza I’m interested in finding out more about your leasing program! How do I contact you?

Jay
July 20, 2014 / Reply

Please contact me. We are opening a weight loss center. Need commerical-grade recumbent bike, power plate, and i-Lipo or comparable.
Jay

Jose malave
February 4, 2015 / Reply

How can I contact you for info on the company you use for leasing equipment. Thank you in advance

Sandra
March 26, 2015 / Reply

Can you email me with your info

THOMAS SZE
April 16, 2015 / Reply

Hi Rico,
Im looking to start a gym up. In the works of leasing out a 5,000-7,000 sq feet place.
Could you possibly provide an approx cost for leasing. I’m looking at starting off with 15 treadmills, 10 bikes, 10 elliptical and 2 rowers. Thanks
If you could give me the purchase price that be great too. Im looking at Life Fitness or Precor Brand

Runner60
July 19, 2014 / Reply

Rico, I’m working on a college project to set up my own gym. Could you possibly provide an approx cost for leasing. I’m looking at starting off with 6 treadmills, six recumbent bikes, 6 elliptical and 2 rowers. I figured it wise to rent the cardio and buy the weigh machines. Your help would be appreciate, thanks

Stella Morgan
December 9, 2014 / Reply

Personally, I think it’s wiser to purchase an equipment, but, if and only if, you have the right equipment. I think it’s impractical to lease equipment because there is no guarantee that you can always find time to work out. Whereas if you buy an equipment, it’s always there, always available. Plus, when you get the right equipment (I highly recommend you to get a smith machine ), you can be sure that you can maximize your workouts by targeting your problem areas and improving your assets.

T Staabereli
July 1, 2015 / Reply

It would be nice if a new business model were to be able to accomplish my interests in gym equipment. I would like to be able to rent a workout system due to the heavy investment. I imagine that a truck similar to a PODS or deliverable storage would roll back a gym into my garage. Of course there are different needs but the point here is that most average pre-committed health seekers buy equipment and then are stuck with it. Instead they should rent it short term and incentives to continue will entice.

Zotezo India
July 14, 2015 / Reply

Many people, after hitting the gym find themselves surrounded by a swarm of cardiovascular equipments – rows upon rows of treadmills, elliptical machines, stair steppers, rowing machines, stationary bikes, and more.
The next question that bothers them is which one will be the best for them to start with – the machine that can give you enough fitness; the one that burns the most calories; or the device that has least impact on your joints? Zotezo is one of the best online shopping website that sells gym equipment online.

http://www.zotezo.com/Fitness-Equipment

Lease Funders
July 28, 2015 / Reply

When you lease gym equipment, you’ll always have state-of-the-art machines. Having up-to-date equipment will help you attract and retain members.


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