Is it smarter to lease/rent a portable classroom or buy one?
Expanding space for private schools often presents a financial dilemma: lease or buy? While leasing a portable classroom offers a quick and flexible solution for temporary needs, such as during construction or emergencies, the long-term benefits of purchasing a used portable classroom can significantly outweigh those of leasing, especially financially.
Short-term Needs vs. Long-term Planning
Renting a portable classroom is practical for short-term scenarios, providing immediate space during renovations, construction projects, or sudden emergencies. However, Matt Banes of iModular.com suggests a different approach for more extended needs. “If your school expects to need the extra space for more than 36 months, purchasing a used portable classroom becomes the wiser financial decision,” says Banes. This advice is grounded in thorough cost analysis and long-term financial planning.
Understanding the Costs: Renting vs. Buying
Let’s delve into the numbers through a common scenario: the costs associated with renting versus buying a used portable classroom. Renting a 24’x60′ portable classroom may cost about $2,800 per month. Over 36 months, this accumulates to $100,800 in rental fees. In contrast, purchasing a similar used portable classroom might cost around $120,000.
Though purchasing appears more costly upfront, the comparison shifts when considering long-term ownership versus temporary use. After 36 months of renting, the classroom must be returned, leaving the school without an asset. Conversely, owning the classroom after the same period provides the school with a valuable asset for only a slightly higher total cost than leasing.
The Investment in Ownership
Owning a used portable classroom is an investment. With proper maintenance, these classrooms maintain a significant resale value, offering the possibility of recouping a substantial portion of the initial outlay. Once the school no longer needs the classroom, it can be sold to another entity in need, transforming a portion of the original expenditure into liquid assets.
A Practical Example
Consider a practical example for clearer insight. After investing $120,000 in purchasing a used portable classroom and using it for five years, assume the school can sell it for 75% of its purchase price, equating to $90,000. The net cost of ownership over this period then stands at $30,000. Compared to leasing the same unit for five years at a total cost of $168,000—with no asset to show at the end—the financial benefits of purchasing become evident.
For private schools evaluating the expansion of their physical spaces, the decision to buy or lease a portable classroom should be made with both immediate and future needs in mind. Although leasing offers a solution for short-term requirements, purchasing a used portable classroom is a strategic investment that provides long-term value and contributes an asset to the school’s portfolio. This asset, if well-maintained, holds significant resale value, offering a route to recoup part of the investment, making purchasing an attractive option for needs extending beyond three years.
