Finance: When Investing in equipment makes sense

Disclaimer: I am not a financial advisor or business expert and this article isn’t intended as a guide for your specific financial or business situation. It is a recounting of my experience and my opinions on the subject on what has worked for me. For advice about your financial or business decisions, please contact a qualified financial advisor or a trusted business mentor.

I’ve struggled with the thought process of buying vs renting for many years. I used to spend countless days researching online and asking peers about my decisions. I wanted to know I was making the right decision by parting with my hard earned money. I’ve come to a good place on the decision making process of whether or not I should buy: If I need a piece of equipment either for an investment in myself or for financial ROI, then I buy it even if I need to stretch my budget. If it’s too much of a financial stretch or not something that fits into my business or personal plan, then I look at it as a rental.

I wasted a lot of time going back and forth on whether or not to buy something. It started to take away time from me either thinking of the next job or the next creative project I could work on. Perhaps part of it was a distraction so I didn’t have to focus on moving ahead creatively. The good news is, I don’t have this problem anymore because I’ve worked out a few things that satisfy both the logical and emotional equations of owning equipment, especially equipment that may stretch the budget.

The time to buy

First let’s talk about when I choose to buy vs. rent, based on the type of work I do. I’ve recognized there are 5 opportunities for me to buy equipment:

  1. Looking to get to the next level: This one is more for the working on the indie level. When I was beginner and worked with small companies, I wasn’t working on sets with top tier equipment. To get around this, I would buy something I normally wouldn’t have access to otherwise, such as a high end camera. I learned the workflow the pros work with, and improved the image quality at the same time. I did not see a financial return because I was still trying to figure out how to make it work the best it can. The ROI is that it added to my resumé and knowledge because now I didn’t have to shy away when a larger production asked if I knew how to use (for example) an ARRI or RED camera that I would otherwise have had no access to. This is a personal investment.
  2. Making a profit from the purchase of a piece of equipment through rentals: There are instances when one owns equipment that they can rent it out to the jobs they work on. Many cinematographers have lucrative side businesses by renting their equipment on projects they’re shooting on – especially multi-day shoots. I once heard about a camera operator who worked his way up to owning several Alexas and was able to rent them out consistently on recurring jobs. His annual income alone on rentals was something around $200,000+ USD. After the initial investment of a camera is paid off, it is pure profit from there – to use on other things or for maintenance/servicing the equipment periodically. This is a financial investment.
  3. Keeping up with the market: In the hands of an advanced cinematographer or cameraman, often the camera doesn’t matter once you reach a certain level, but in some instances it does matter. Barriers to enter the industry as a freelance cinematographer are lower now more than ever due to falling equipment prices and higher quality. In some markets, not having a specific camera can affect you from getting a job compared to the next guy. For instance, I have seen dozens of job listings where they literally list the type of camera the prospective DP should bring to the shoot. “DP with RED”, “Cinematographer with Black Magic Cam”, etc. I stay away from these types of jobs because I want to work with people who value me for my skill and build a relationship from there. I don’t want to be “the guy with XYZ camera”. But, some people are in an industry or market where clients value owner operated gear and specific types of camera/lens/lighting systems, and having a lot of equipment can be key to winning a bid. This is a financial investment.
  4. When equipment is outdated, broken, or replaced with a newer model: This occurrence of replacement with new models happens pretty frequently, at least every 1-2 years. Many companies will come out with new and improved equipment. After a few iterations, I’ll have to sell the old model, because I’ve found that productions usually want to rent the latest model. This is a financial investment.
  5. When interested in learning a new skill: While I could rent the equipment I want to learn on (gimbal, steadicam, control surfaces, calibrated monitor etc), it’s often much more cost effective to buy, learn over time (in this case it might be months or years) as much as I want, and resell at a loss. However, any financial loss I think is irrelevant as it would have cost me much more in time and effort to have to go to the rental store and pick up and drop off the equipment each time I wanted to use it. This is a personal investment.

With the exception of #3 above, if any of the criteria apply to a new equipment purchase, I will make the investment. The only reason why #3 has fallen out of favor for me is because I no longer own a lot gear as leverage to get work. I have been fortunate enough to be able to rely on my skill as a cinematographer. It is simply one of the prior strategies I had used when I was new to the industry.

What about rentals?

Rental houses need to exist for productions. They also have the ability to maintain their equipment more frequently or replace something on a shoot for free and in a small amount of time if something goes down.

The reason why I prefer owning specific types of equipment is because I make a lot of side projects as art pieces or for fun. It’s great to walk a few feet over to an equipment shelf and grab something I often use, like a camera or a few basic lenses for a test or a fun shoot, vs setting up a rental and having to spend time going to and from as well as making sure it needs to get back at a certain time. I like to take my time with my personal projects and don’t want to worry about incurring late fees. I just to happen to be able to pay these cameras off through projects that want to use the camera as a bonus to having me as the cinematographer.

Emotional vs Logical Decision

Not everything can be broken down to logical decisions. Often times I’ve talked to colleagues and they try to give me logical advice to help me figure out if buying a piece of equipment is the right move. However, they may not have the full picture behind my long term goals or my thought processes. Sometimes I have a flash of inspiration and decide I need to own something even if it flies against the face of logic. I think it’s why sometimes equipment is difficult to assess in terms of buying vs renting. Sometimes you need to own something for reasons other than financial ones. I’ve made decisions to go into debt to buy things that colleagues have questioned – lenses, monitors, stabilizers, etc., because in my mind I would learn, grow, and therefore make myself more valuable as a cinematographer in the long run. Most of the time it’s worked out pretty well despite it not logically making sense, and I always make sure I can pay off what I buy.

Understanding goals

I’ll close with the thought that with the decision of renting vs. buying, knowing what I want as my outcome helps to narrow down the decision. Usually, I find that if buying a piece of equipment is in directly alignment with my goals and outcomes, I will make the decision to buy.

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