Is it better to lease gym equipment or buy them outright? Here is how much it cost to lease gym equipment vs buying it, and the best option for your business. One of the hardest businesses to start up can be a gym, almost solely because of equipment costs; nonetheless, fitness centres offer a service in exchange for membership, meaning you can retain quite a bit of business.
The major aim of many gym owners is to establish and expand in a fitness community, a place where people can go together to work out; however, making this vision a reality can be something else entirely.
Every gym owner wants their centre to offer quite a handful of services, from variety in weightlifting equipment to enough treadmills and elliptical to be used on a busy day to classes for yoga, dance, and more. However, the difficult factor in just about any of these is equipment; thinking about just the cost of treadmills, there’s no way you’ll have the capital to afford everything you need.
This leaves business owners with a couple options: they either choose to buy equipment with a loan or financing plan, or they can lease their gym equipment. Have it in mind there are advantages and disadvantages to both buying and leasing any equipment, especially gym hardware, so in the cases of buying vs. leasing gym equipment, what are the costs associated with each of the options?
Cost of Leasing Gym Equipment
When you own or are looking to start a gym, note that having state of the art equipment is a must. Without it, your prospective customers will find another place to work out. However, note that buying all of that equipment can be very expensive and can be a major drain on your cash flow.
Leasing offers a popular alternative to buying gym equipment because there are few, if any, upfront costs. Leasing is ideal for start-ups or existing gyms that are looking to expand or upgrade without shelling out a lot of cash. Corporations and nonprofits are also turning to leasing to provide gym equipment for their employees.
It’s very important to start that manufacturers don’t offer leases, but secondary leasing companies do. They buy the equipment and charge you a monthly fee to use it. At the end of the lease, you can buy the equipment from the leasing company for fair market value or trade it in for new equipment.
The cost of leasing gym equipment varies widely depending on numerous factors. Factors that influence leasing costs include:
- Amount of equipment: The volume of the gym equipment you want to lease directly affects prices. Many offer discounts for larger amounts of equipment.
- Cost of equipment: Note that the higher the retail value of the gym equipment, the higher your lease payments are likely to be.
- Credit rating: With a better credit rating, you can get a better deal that involves lower monthly payments.
- Equipment condition: Also note that the age and condition of the equipment play a role in determining price. Newer, unused equipment typically has a higher price.
- Lease length: How long you intend to have the equipment factors into your costs, with longer leases generally having lower monthly payments.
Nonetheless, as a general guideline machines like commercial treadmills, elliptical, and stationary bikes can be leased for $60 to $100 per month. Volume discounts are available for large leases. With a good credit score, you could easily lease $100,000 of gym equipment for between $2,500 and $2,700 per month.
Also, with a lease your gym pays only the amount each machine is expected to depreciate while it is located in your facility. In most cases, a labour and parts warranty is included in the lease so you won’t have to worry about the cost of repairs.
Some leasing companies offer 100% financing while others require a down payment, security deposit, and the first and last month’s lease payments. Be sure to ask for a complete list of all upfront costs before signing a lease agreement.
Cost of Buying Gym Equipment
One thing you have to understand is there’s no perfect world where buying is absolutely better than leasing and vice versa; it all depends on your personal need, and the fact of the matter is most businesses will do both to get the hardware they need for their company.
Note that the benefits to buying vs. leasing gym equipment come through the little benefits each offer that can give you an edge when starting your business. For instance, when buying your equipment, you can claim it as a business asset, allowing you to get some funding, and leases give you the benefit of a tax deductible.
As far as upsides and downsides to buying vs. leasing gym equipment, it all depends on where you get your equipment, so doing your homework and picking who you want to give your hard-earned money to can really pay off. Meanwhile, note that the cost of buying depends on the amount of equipment you buy, the type of equipment, and the condition of the equipment.
- Elliptical, stair steppers, and treadmills have an average cost of $2,000 for light commercial models, with heavy-duty units averaging between $5,000 and $10,000.
- Single-exercise weight machines have an average cost between $4,000 and $7,000.
- Outfitting a 3,000 to 4,000 square foot gym has an average cost between $30,000 and $50,000.
- Some companies offer package deals that include a variety of equipment. Costs start around $45,000 for small packages and run up to $190,000 for larger packages.
Conclusion
Gym owners face the hard decision to buy vs. lease their exercise equipment. Unfortunately, there are pros and cons to both, which makes the decision to buy or lease even more challenging. At the end of the day, you need to weigh the long term expense and the needs of your gym when looking for new equipment. Doing your research can mean the difference between your business having a rough time from day one and your business getting the most successful start possible.