Rental Equipment ROI Calculator
Let’s assume you’re renting out construction equipment, such as a backhoe, for $500 per day.
Initial investment: Let’s say the backhoe costs $50,000.
Annual Expenses:
- Maintenance: $5,000
- Insurance: $2,000
- Depreciation: $7,000
Annual Revenue:
- Renting out the backhoe for 100 days per year at $500 per day gives us $50,000 in revenue.
With these estimates, we can calculate the ROI over a period of time, say 5 years.
| Year | Revenue | Expenses | Net Income | ROI (%) |
|---|---|---|---|---|
| 1 | $50,000 | $14,000 | $36,000 | 72% |
| 2 | $50,000 | $14,000 | $36,000 | 72% |
| 3 | $50,000 | $14,000 | $36,000 | 72% |
| 4 | $50,000 | $14,000 | $36,000 | 72% |
| 5 | $50,000 | $14,000 | $36,000 | 72% |
This assumes that revenue and expenses remain constant over the 5-year period, which might not be entirely realistic, but it provides a simple estimation. The ROI is calculated as (Net Income / Initial Investment) * 100. So, for each year, you’re earning back 72% of your initial investment.